Modifications to Customs and Foreign Trade Legislation for 2024

By Goodrich, Riquelme y Asociados

As we have timely discussed since November 2023, the foreign trade legislation in our country has undergone various changes with implications for economic stakeholders in the current year 2024, which we address below:

CHANGES IN THE DURATION OF VAT AND IEPS CERTIFICATIONS AND ANNUAL PAYMENT FOR THEIR RENEWAL.

Starting from October 31, 2023, through the Amendment Decree to the General Foreign Trade Rules for that year, the authority determined that the validity of all VAT/IEPS certifications, regardless of the sector, should be renewed annually. Only those companies that had just obtained their renewal for two or three more years just before the publication of this modification were exempt from this renewal for the moment. However, for the next certification renewal, all companies can request it for only one year.

As a consequence, many certified companies proceeded to process the renewal of their certification for the year 2024 in advance. It has been observed that many of these companies made the payment for the certification renewal at the amount valid at the time of the request in late 2023, according to the amounts in force in November 2023. Nevertheless, if the renewal requested was for the certification exercise in 2024, the authority is considering that the payment should have been made with the updated tariff in the amounts established by Annex 19 of the Fiscal Miscellaneous Resolution, published on December 29, 2023, and effective from January 1, 2024.

The tariff paid in 2023, as shown by the Federal Law of Fees in November of that same year, and the one in force for 2024, modified by the aforementioned Annex 19, shows an average differential of $2,000. Therefore, if the total amount of $37,112 (thirty-seven thousand one hundred twelve pesos) for the renewal of the certification for 2024 has not been paid, it is recommended to approach your advisor to make the additional payment and avoid further inconveniences from the authorities regarding your certification.

CHANGES RELATED TO CUSTOMS PROCEDURE FEES PAYMENT

As previously mentioned in earlier circulars, due to the modification to Article 49, Section IV of the aforementioned law, starting from December 30, 2023, in export operations under Free Trade Agreements that negotiate the non-application of tariffs, levies, or additional fees on foreign trade operations between the parties, a fixed fee of $425.44 for customs procedure rights must be paid per operation, including exports. In general, the increase in customs and foreign trade duties reflected in Annex 19 of the Fiscal Miscellaneous Resolution averages a 5% increase for the current year.

EFFECTIVE DATE OF THE SOLIDARITY RESPONSIBILITY DECLARATION IN VIRTUAL OPERATIONS WITH V5 KEY PEDIMENTS

On December 12, 2023, the "Sixth Resolution of Modifications to the General Rules of Foreign Trade for 2023 and Annexes 1 and 5" was published in the Official Gazette of the Federation. Through this resolution, Rule 7.3.3., Section XIII, first paragraph, item a), was amended to establish the obligation for companies with Certification of Companies under the OEA modality that, among their operations, carry out virtual transfers of goods through V5 key pediments, to assume joint responsibility as per Article 26, Section VIII of the Federal Fiscal Code regarding the fulfillment of tax obligations arising from the sale of goods by a non-resident abroad without a permanent establishment in national territory. For this, the publication establishes that they must fill out Form E15, "Declaration of Willingness to Assume Solidarity Responsibility in terms of Rule 7.3.3., Section XIII." This modification results from a ruling issued on October 5, stating that in operations carried out through virtual pediments with V5 key, there is no obligation to withhold value-added tax, as there is no sale in national territory of the corresponding goods.

Therefore, the transferor of the goods must submit this form through a clarification case on the SAT Portal, attaching the corresponding acknowledgment to the pediment that supports the return of the goods. It is important to note that the recipient must, in turn, process a definitive import pediment. This mechanism came into effect on January 1, 2024, and for certified companies involved in these operations, the possibility of filing defenses, such as an injunction against the administrative demand to voluntarily declare themselves jointly responsible in operations where the Supreme Court has already established that there is no obligation to withhold tax, should not be overlooked.

EFFECTIVE DATE OF MODIFICATIONS TO THE USE OF EO AND PO IDENTIFIERS IN FOREIGN TRADE OPERATIONS

These modifications were announced during 2023 but became effective for customs operations starting December 29, 2023. The declaration of these EO (origin certifier) and PO (origin supplier identification) identifiers applies to those introducing goods into the country, with exceptions for certain regimes, as long as preferential treatment is derived from agreements and free trade treaties declaring AL (Goods originating from ALADI) and TL (Goods originating under Free Trade Agreements) identifiers.

The PO identifier aims to identify the name of the origin supplier of the goods and its customs value, while the EO identifier aims to identify the character of the subject certifying the origin under the applicable Treaty, distinguishing whether it is one of the following:

Producer/Exporter. (Example: USMCA, Chile-US FTA, EU-Mexico FTA - Declaration on Invoice)
Importer (Example: USMCA)
Foreign Authority. (Example: EU-Mexico FTA - EUR1 -, ALADI).

INCREASE IN CAUSES FOR REMOVAL FROM THE IMPORTERS' REGISTRY

On December 28, 2023, the General Rules on Foreign Trade for 2024 were published in the Official Gazette of the Federation, with various modifications taking effect from January 1, 2024. Among them:

INCREASE IN CAUSES FOR SUSPENSION IN THE IMPORTERS' REGISTRY

As a result of the publication of the aforementioned rules, two causes for suspension are increased in sections XLVI and XLVII, respectively, covering suspension when it is determined by the customs authority that the required VAT withholdings were not made in the operation, especially those withholdings that should have been made in purchases from non-residents abroad. Additionally, when, due to an origin verification procedure for products from a foreign supplier for which a tariff preference was requested, it is revealed that they did not qualify as originating, and the importer fails to immediately correct their situation regarding the incorrectly enjoyed tariff preference.

Regarding the suspension cause due to not having made the relevant withholdings to non-residents abroad, it is important to analyze defense and prevention measures against its application, especially in cases of temporary regimes and suspension of import cargo operations, such as fiscal deposit and transfers of temporarily imported goods, as the Courts have already expressed that such operations do not constitute an importation into Mexico, and therefore, there is no obligation to withhold taxes from non-residents abroad, particularly in the case of V5 operations by certified companies that could access preventive injunctions against this administrative provision.

MODIFICATIONS TO VARIOUS NOTICES IN THE IMPORTATION OF GOODS

The formats for notice of the importation of goods using the Second Rule of the Tariff of General Import and Export Taxes, as well as the notice format for the transfer and transfer of goods in sub-manufacturing, have been modified.

CHANGES TO OBLIGATIONS REGARDING MAINTAINING AUTHORIZATION TO IMPORT GOODS BY A PLACE OTHER THAN THE AUTHORIZED ONE

In Rule 2.4.2, Section IV, the obligation to submit information on volumetric controls, in accordance with Rule 2.8.1.6., Section III of the Fiscal Miscellaneous Rules, is indicated. Additionally, it is required to submit the required opinion in accordance with the procedure sheet 283/CFF "Volumetric Controls Notices," contained in Annex 1-A "Fiscal Procedures" of the Fiscal Miscellaneous Rules, as requirements to maintain authorization to import hydrocarbons or petroleum by a place other than the authorized one.

"DECREE EXEMPTING THE PAYMENT OF IMPORT DUTY AND GRANTING ADMINISTRATIVE FACILITIES TO VARIOUS BASIC BASKET AND BASIC CONSUMPTION GOODS"

On December 27, 2023, as part of the anti-inflation package of the current administration, the Decree exempting the import duty payment and granting administrative facilities to various products in the basic basket for the entire year 2024 was published in the Official Gazette of the Federation. This allows virtually duty-free importation of various essential products for the entire year 2024.

MODIFICATIONS TO FOREIGN TRADE AND CUSTOMS OPERATIONS DUE TO CHANGES IN THE FISCAL MISCELLANEOUS RESOLUTION FOR 2024

On December 29, 2023, the Fiscal Miscellaneous for 2024 was published in the Official Gazette of the Federation, highlighting the following two points:

• Use of detailed supplements in CFDIs that support expenses on behalf of third parties.
• Non-extension of deadlines for the application of sanctions related to the bill of lading supplement for goods.

For the purposes of expenses on behalf of third parties, a very common feature in the operations carried out by importers and exporters with their customs agents, it will be necessary to declare correctly in the corresponding third-party expense supplement the complete amount of funds received by the customs agent for purposes other than their fees and to provide a breakdown of how these funds were spent, so that they are not considered income.

Regarding the obligation to issue the bill of lading in the transport of goods for all national or foreign trade operations, this obligation had already been fulfilled by several taxpayers. However, the sanctions related to the issuance of the bill of lading supplement, whether due to errors in the information provided, transmission failures, or omissions, had been extended through various publications of modifications to the Fiscal Miscellaneous Resolution and the General Rules of Foreign Trade. For 2024, none of these regulations contemplates extensions for the application of these fines, so it is considered that as of January 1 of this year, these sanctions are in force and applicable.

Therefore, it is necessary to already reflect the alphanumeric folio of 31 digits corresponding to the bill of lading supplement assigned by the SAT when stamping invoices in the notices and documents for the crossing of foreign trade goods.

Finally, what did receive an extension is the possibility of using bill of lading supplement version 2.0 (until March 31, 2024), making version 3.0 mandatory from April 1, 2024, through the Seventh Transitory Article of the Fiscal Miscellaneous Resolution 2024. During the first months of 2024, both versions will coexist. However, the lack of issuance of the bill of lading, whether in version 2.0, 3.0 during January, February, and March 2024, as well as its issuance and transmission with errors, is now subject to fines.

Version 3.0 will be mandatory from April 1, 2024, and it is advisable to be vigilant for its migration to version 4.0 when it occurs.