The Value Added Tax Law (LIVA) in Mexico establishes some assumptions where the VAT 0% is caused, which allows us to recover the VAT of the expenses and investments paid through the return of balances in favor. Therefore, it is important to review our activity to see if it fits into the VAT 0%.
According to article 2-A of the VAT Law, the tax will be calculated at the 0% rate for the following activities:
YO.- Alienation of:
a) Animals and plants that are not industrialized
b) Patent medicines and products intended for human and animal consumption
c) Ice and non-carbonated or mixed water
d) Ixtle, palm and lechuguilla.
e) Tractors to drive agricultural implements
f) Fertilizers, pesticides, herbicides and fungicides
g) Hydroponic greenhouses
h) Gold, jewelry, silversmithing, artistic or ornamental pieces and ingots
i) Books, newspapers and magazines
j) Sanitary towels, tampons and cups, for menstrual management.
Regarding provision of independent services Section II of Article 2-A of the VAT Law establishes that the 0% rate will be applied to:
a) Those provided directly to farmers and ranchers, provided they are intended for agricultural activities
b) Those for grinding and crushing corn
c) milk pasteurization
d) Those of raw cotton gin.
e) Those for the slaughter of livestock and poultry
f) Those of reinsurance.
e) Water supply for domestic use.
f) The use or temporary enjoyment of the machinery and equipment of tractors to activate agricultural implements and hydroponic greenhouses.
The export of goods and services is also mentioned at the 0% rate under the terms of article 29 of the VAT Law.
Having activities subject to VAT 0% generally generates a balance in favor of VAT, which we can credit in later periods or request it as a refund from the tax authorities.
If you require more information about whether your product or service is at the 0% rate, contact us.
Excellent article thank you very much for the feedback, I would like an accounting course.
Thank you
Thank you very much Patricia, soon we will be sending you information about our advice and courses.