Mexico Customs Valuation Methods
One of the most important topics when discussing foreign trade is Customs Valuation. That's why we've taken the time to conduct in-depth research so you can easily understand each and every Customs Valuation Method in Mexico.
All the details of the Mexico Customs Valuation Methods
As mentioned previously, Customs Valuation Methods in Mexico are of great importance when discussing foreign trade. This involves determining the total value of imported goods, as the total value must be declared in order to pay taxes such as VAT or IGI.
Over the years, there have been several modifications that have been made and in addition, there are different agencies which have been responsible for establishing the way in which the proper customs valuation should be carried out.
On the other hand, the most recent and commonly known treaty within this field is nothing more than the WTO Agreement or also known as the World Trade Organization, being related to the application of article VII corresponding to the GATT or also called the General Agreement on Customs Tariffs and Trade in the year 1994.
More details
It is nothing more than the one that specifies the valuation methods, starting with the main one: the Customs Valuation Methods of Mexico, which is the one that should be used as a priority, except in those cases in which there is no transaction value or that it is not acceptable when the price has been distorted by certain conditions.
For the occasions in which the aforementioned occurs, the other five (5) usable methods must be used, that is: the transaction value of identical merchandise, the transaction value of similar merchandise, the deductive method, the reconstructed value method and the method of last resort.
What are Mexico Customs Valuation Methods used for?
Once the aforementioned information is taken into account, it is important to note that the Mexican Customs Valuation Methods are used at the transaction level when the price paid is the total payment that the buyer has made or will make for the various imported goods to the seller.
In order to use this method at the right time, more requirements must be met when wanting to carry out the valuation, such as presenting proof of sale, whether they are invoices, contracts or orders.
In addition to this, ensure that there are no restrictions on the way in which the merchandise can be used or so that it can be purchased (unless they are imposed thanks to the legislation of the importing country) or the price of the product. is completely subject to the value of the same and not to that of others.
Example
An example that can be mentioned is that the price of the product to be imported was lower, this is if the seller buys a certain quantity from another and, in addition, there is no kind of relationship (be it work or family) that could have influenced the price. of products and more.
That is why it is really necessary that if any of the requirements are not met, the step of the next method is started and in this way, consecutively carry it out until finding the appropriate method to carry out the valuation, being the The only exception is that found in the deductible and the reconstituted value, since they can be invested if the importer so wishes.
More information: Mexico Customs Valuation Methods
It is really necessary that in the case of not meeting any of the other requirements and taking into account the move to the next method and so on consecutively until finding the right one to carry out the valuation, the only exception being that found in the deductive and the reconstituted value, since it can be invested if the importer so wishes.
The following method is the transaction value of identical goods. In this case, since the real price is not available, the price of certain goods identical to those being imported is used, provided that they are identical in physical details, quality and prestige, and that they have been produced in the same country from which they are importing and are produced by the same producer.
This is followed by the transaction value of similar goods. In this case, they must not be 100 percent identical; however, they must be truly similar in composition and characteristics. Furthermore, they must perform the same functions and be commercially interchangeable.
More Methods
Continuing with the methods, mention is made of the deductive value, which is taken as a starting point from the final price that the product will have when it is sold and from said price the added value will be deducted thanks to the elaboration of the goods, transport costs, customs duties and other internal taxes paid in the country and others.
The method with which the previous one managed to be exchanged if requested by the seller, is the reconstituted value. Contrary to the previous one and as its name indicated, with this method it will be possible to calculate the price of the merchandise based on the price of the inputs used to carry out the elaboration by the producer of the same, that includes all the raw material, labor expenses executed in the country.
Finally, the method of last resort is disclosed, which in case the value cannot be determined with any of the other five methods mentioned, then this one will be used as the basis for carrying out the determination corresponding to the price where there will be "reasonable criteria, compatible with the principles and general provisions of this Agreement and Article VII of GATT 1994, on the basis of available data."
In other words, the value can be calculated with the data to which you have access in the importing country and taking into account any kind of restriction that exists in the agreement.
Finally
To conclude, it is important to mention that as we have been telling, said agreement was really written to end the customs valuation in this way and to be able, in this way, to avoid various means by which importers will avoid making the full payment of those taxes. .
On the other hand, in matters such as tariff classification, it makes it possible to pay less for the value of the goods by declaring that the use that will be offered to the product will be different from the real one or that the right will not be found. made of different materials. In this case, it is of great importance that thanks to the first method it is possible to affirm that the materials already mentioned are really the correct ones.
Another of the problems that currently must be dealt with is nothing more than the undervaluation of merchandise; This happens when the importer declares to customs a lower price than what was actually paid for the products, in order to make the payment less taxes and that is why it is vitally important that the customs agent knows the various approved methods to carry out the valuation.
In this way, all importers who evade the full payment they should make are prevented from being penalized. Finally, we hope that all the information shared in this article has been helpful so that you can understand all the details of Mexican Customs Valuation Methods without any problems.
If you found the information in this article helpful, we invite you to check out this other article about Requirements for Registering a Trademark with IMPI!