You will learn about the impact of the fiscal reform in Mexico for companies with no legal entity working under the shelter program of American Industries Group. http://www.AmericanIndustriesGroup.com facilitates the successful establishment of global corporations through site selection, start up and soft landing adminitstrative and real estate services throughout Mexico.

1. MEXICAN TAX REFORM 2014
Aspects of the Mexican Tax Reform 2014 that will Impact the Shelter
Customers without legal presence in Mexico. This reform was approved by
the chamber of Deputies and the Senate and is expected to be submitted to
the Executive for its publication in the Official Gazette.
By Patricia Loya
Controller
American Industries Group
Mexico’s Leading Manufacturing Facilitator
facilitator@AmericanIndustriesGroup.com
www.AmericanIndustriesGroup.com

2. About American Industries Group
American Industries Group is a
private Mexican company that has
helped over 200 global companies to
successfully establish and run
manufacturing operations
throughout Mexico since 1976
through Site Selection,
Administrative “Start up & Shelter”
services and Industrial Real Estate.

3. Our Locations & Score Card
Reynosa
MonterreyGómez Palacio & Torreon
Camargo
El Paso
Gómez Farias
Chihuahua
San Luis Potosi
México D.F.
Juárez
Querétaro
Delicias
Silao
Monclova
Guadalajara
Saltillo
Regional Offices, Shelter and/or Real Estate Customers
Shelter and/or Real Estate Customers
Shelter & Start-up Services Real Estate
• 50 Current Customers.
• Over 8,000 Customer’s headcount
• Over 30,000 trouble-free import
and export transactions per year.
• Over 11 M Sq. Ft. Portfolio.
• Full Mexican Market Coverage
• 9 Industrial Parks
• 90 Buildings
• 89 Customers

4. 1 .- Value Added Tax (VAT) on the Border Zone.
VAT on the border zone will be at 16% instead of current 11%
rate. However, shelter customers with no legal presence in
Mexico will not be affected since American Industries recovers
this tax, with the exception on non deductible expenses.
Example 2013 Law 2014 New Law
Pass through
expenses made
on the border 100 100
% of VAT 11% 16%
Total $ 11 $ 16

5. 2 .- Value Added Tax (VAT) on
temporary imports
Temporary Imports would be taxed with VAT, and that tax will
be recovered after the temporarily imported goods are
exported. However for those companies that would meet the
Certification process by Mexican Authorities (SAT) will award
a credit equal to 100% of the temporary import VAT, so this tax
will not impact the certified companies. This reform will enter
into force one year after SAT posts requirements for the
certification of companies.
Note: As long as your company works under the
Shelter program, and American Industries obtains
the Certification, you will not have to pay VAT for
temporary imports (4 year period).

6. 2 .- Value Added Tax (VAT) on
temporary imports
Temporary Imports would be taxed with VAT, and that tax will
be recovered after the temporarily imported goods are
exported. However for those companies that would meet the
Certification process by Mexican Authorities (SAT) will award
a credit equal to 100% of the temporary import VAT, so this tax
will not impact the certified companies. This reform will enter
into force one year after SAT posts requirements for the
certification of companies.
Example 2013 Law 2014 New Law
Temporally import of
machinery and
equipment 50,000 50,000
Temporally import of
raw material 40,000 40,000
90,000 90,000
VAT 0% 16%
VAT - 14,400
Credit of 100% to
certified companies 0 -14400
Total $ - $ -

7. 3 .- Shelter Maquiladoras
Customers under Shelter Agreement, with residence out of México,
will be exempt from being considered permanent establishment
for a maximum period of 4 years, after this period the resident
abroad must create its corresponding Mexican legal entity in
Mexico and pay taxes.
This will cause that after 4 years, our current customers should
migrate from total Shelter umbrella to have their own Mexican
company and continue working with the American Industries
Administrative Services.
We consider that for the majority of our clients, once they become a
Mexican legal entity, it shall not represent an additional Income Tax
cost to them, since the tax they pay in México should be considered
to obtain a credit for it in their country of origin. So the difference
would be that the tax they currently pay in their country, now they
will have to split it in order to pay a part in México and the other
part in their country.
Note: American Industries as a member of INDEX ( Maquiladoras Association)
is working on the lobbing process with the tax authorities in order
to extend the exemption period.

8. 3 .- Shelter Maquiladoras
Customers under Shelter Agreement, with residence out of México,
will be exempt from being considered permanent establishment
for a maximum period of 4 years, after this period the resident
abroad must create its corresponding Mexican legal entity in
Mexico and pay taxes.
This will cause that after 4 years (at the beginning of 2018), our
current customers should migrate from total Shelter umbrella to
have their own Mexican company and continue working with the
American Industries Administrative Services.
We consider that for the majority of our clients, once they become a
Mexican legal entity, it shall not represent an additional Income Tax
cost to them, since the tax they pay in México should be considered
to obtain a credit for it in their country of origin. So the difference
would be that the tax they currently pay in their country, now they
will have to split it in order to pay a part in México and the other
part in their country.
Example 2013 Law 2014 New Law
Income tax to
Shelter Companies
for 4 years 0% 0%
Starting 5 year 0% 30% of fiscal base

9. 4 .- Deduction of only 53% of salary payments
exempt from Income Tax to the worker who
receives them.
American Industries would have to charge our customer a 30%
of Income Tax out of 47% of exempt salaries which would not
be deductible on 2014, however this modification will not
affect our customers, since the customer is currently paying
17.5% of IETU Tax on exempt salaries payments, this IETU
would disappear on 2014. Our customer would be charged for
Income Tax on non-deductible benefits which would be lower
than the IETU tax that is currently charged.
Example 2013 Law 2014 New Law
IETU Income Tax
Saving Funds 100 100
Foods coupons 100 100
exempt salaries 200 200
Non deductible 100% 47%
200 94
Rate 17.50% 30%
IETU $ 35 $ 28

10. 5 .- Income Tax for individuals
The tax rate applicable with earnings from $500,000 pesos to
$749,999 will be subject to a 30% tax rate; those with earnings
higher than $749,999 pesos, to a 32% rate; individuals with
income over $1 million pesos a year will be subject to a 34%
rate, and those with earnings over $3 million pesos, a
maximum 35% rate will be applicable.
Example 2013 Law 2014 New Law
Salary:
From 500K to 750K
pesos 30% 30%
From 750K to 1M pesos 30% 32%
From 1M to 3M pesos 30% 34%
Over 3M 30% 35%

11. THANK YOU
By Patricia Loya
Controller
American Industries Group
Mexico’s Leading Manufacturing Facilitator
facilitator@AmericanIndustriesGroup.com
www.AmericanIndustriesGroup.com
Should you have any questions, do not hesitate to contact us.