mexico’s aerospace summit - tecma€¦ · tax reform bill –proposed bill of tax reform was...
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Queretaro, MexicoSeptember 26 - 27, 2013
Mexico’s Aerospace SummitINDUSTRY ANALYSIS - NEAR SHORE MANUFACTURING
Luis Carbajo & Manuel Padron Baker & McKenzie Partners
Tax treatment of maquiladoras
and perspective in light of the proposed
bill for a tax reform
Mexico Aerospace Summit
Queretaro, Qro
September 2013
1
Tax Reform Bill
– Proposed bill of tax reform was submitted on September 8, 2013
– New Tax Environment for Maquila Companies:
– Value Added Tax
– Temporary importations
– Sales by non-residents
– Income Tax
– Maquila operation concept - PE
– Transfer pricing – 17.5% vs. 30% - Maquila Incentives Repealed
– Virtual pedimentos may be useless
2
Tax Reform Bill
– Additional tax issues
– Single Rate Tax repealed
– Limitation on deductions
– Dividend tax
– Profit sharing
3
Current Maquila Framework
ABROAD
MEX
Exportation / return of
finished product
Maquila
Agreement
Maquila Operation
PE - ITL – TP
VAT
4
Principal 1
Maquiladora 1
Temporary
importation
Principal 2
Maquiladora 2Virtual Importation
Virtual Exportation
Maquila
Agreement
Exportation /
return of
finished
product
Sale 1
Sale 2
Maquila Framework if Bill Enacted
ABROAD
MEX
Exportation / return of
finished product
Maquila
Agreement
Maquila Operation
PE - ITL – TP
VAT
5
Principal 1
Maquiladora 1
Temporary
importation
Principal 2
Maquiladora 2Virtual Importation
Virtual Exportation
Maquila
Agreement
Exportation /
return of
finished
product
Sale 1
Sale 2
Maquila Operation
PE - ITL - TP
VAT
Legislative Process
6
©2013 Baker & McKenzie Abogados, S.C.
– According to legislative calendar, law to be discussed and approved by October 20th
– Discussions will start at the “lower” Chamber of the Legislative Branch for subsequent discussion at the Senate
– Majority required to approve a tax reform:
– House of Representatives: 50% + 1 of the quorum required (251 representatives)
– Senate: 50% +1 of the quorum required (65 senators)
Legislative Process
7
©2013 Baker & McKenzie Abogados, S.C.
Structure of the House of Representatives
213 114 104 28 15 2642.4 % 22.8 % 20.8 % 5.8 % 3 % 5.2 %
8
©2013 Baker & McKenzie Abogados, S.C.
Structure of the Senate
54 38 22 25
40.6 % 29.7 % 17.2 % 7 % 3.1 % 2.4 %
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9
Questions?
10
Contact information
Luis Carbajo Martínez
+52 (656) [email protected]
Manuel Padrón Castillo
Ph. +52 656 6291321
Luis Carbajo & Manuel Padron
Baker & McKenzie Partners
Tax treatment of maquiladoras
and perspective in light of the proposed
bill for a tax reform
Mexico Aerospace Summit
Queretaro, Qro
September 2013
Queretaro, MexicoSeptember 26 - 27, 2013
Mexico’s Aerospace SummitINDUSTRY ANALYSIS - NEAR SHORE MANUFACTURING