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How does the tariff classification of merchandise affect business in Mexico?

If you dedicate yourself to foreign trade or import products, it is important that you know about the tariff classification Because it doesn’t matter how many products you import or how much investment you make, because those products can be retained just because you don’t know what their classification is.

For this reason, below you will know what it is and specifically what the classification is like in Mexico:

How is the tariff classification used?

First of all, you should know why it is so important that you know about the tariff classification, as it is essential for the following reasons:

  1. First of all, if you do not know what the classification of the products you import is, you cannot declare them correctly, then that is when they can be withheld.
  2. If your products are retained you will lose money because you will have to pay the period of time that they have been retained, since they will have occupied a place that you will have to pay.
  3. It is even very common that your products can be lost and therefore you would also be losing money.
  4. In the event that you import products that cannot wait in storage because they would spoil, if those are retained they will have to wait a time that they cannot and ultimately would mean a total loss for you.

What is the tariff classification?

  1. ¿What is tariff classification? Well, in reality it is nothing more than a process by which you can carry out both imports and exports in a clear way without this type of trade being a complication for you.
  2. In other words, from this process, all products in the world have a numerical code assigned to them, as it is a code that is universally valid because it was created by the World Customs Organization.
  3. In addition to making imports and exports easier, it is also a process that allows the generation of accurate statistical data because, thanks to this code, it allows us to know what type of goods and how many of them enter and leave the country.
  4. Using these statistical data, it is also possible to regulate export and import products, regulate trade, and set duties and taxes.

How does the Mexico tariff classification work?

The tariff classification mexico is governed by the LIGI, Import and Export Tax Law, after which each of the products are identified by specific numbers or with 8 digits, for example:

  1. The digits 1 and 2 are those that indicate the chapter to which the products correspond in the Harmonized Commodity Description and Coding System.
  2. Digits 3 and 4 correspond to the tariff heading.
  3. Digits 5 and 6 are those that recognize the tariff subheading.
  4. Digits 7 and 8 are applied locally in the country.
  5. Likewise, the first 6 digits are international while the remaining 2 are national.
  6. The eight digits are used to recognize each of the products in customs declarations, because when you import a product, it is the agent, the person who is responsible for verifying the classification to check which products enter the country and does so as a customs process common.

The Mexico tariff classification and the tariff fraction

The Mexican tariff classification differs from the tariff fraction because the latter is in charge of identifying the products according to their characteristics and they are classified according to the TIGIE tariff and will determine different aspects such as:

  1. The IGI or General Import Tax, a tariff that can be specific (for a weight of 600kg corresponds a tariff of 338 dollars per kg and taxes payable of $ 202.8), ad valorem (with a customs value of $ 90,000 corresponds to a tariff of 15% and taxes payable of $ 13,500 or mixed (for a customs value of $ 90,000 with a weight of 600 kg, there is a 10% duty plus 0.36 dollars per kg and taxes to pay for $ 9000 plus $ 216)
  2. That the regulations and non-tariff regulatory restrictions on the entry and exit of products are complied with.
  3. Payment of the compensatory fees issued by the SE, Ministry of Economy.
  4. If a tariff preference corresponds according to the tax relief lists of trade agreements that Mexico has.

How to do the tariff classification?

To make the tariff classification of your products you can apply some very easy techniques that will make the process simpler such as:

  1. Clearly define the product you need to classify.
  2. You must determine if your product can be classified according to its function, matter or origin.
  3. You must determine which chapter corresponds to your product.
  4. That chapter that you determined has items that you must identify to insert your product within that item because you consider it more appropriate.
  5. It is also important that you determine the subheadings and the tariff fraction.
  6. The chapters go from 01 to 98 and from 01 to 83 are grouped according to the matter or origin, that is, where the product is obtained and what its manufacturing material is.

From 84 to 98 the products are grouped according to their function, that is, according to their utility.

Products of the animal kingdom are grouped from 1 to 5, that is, headings 01 correspond to live animals.

  • 0101 corresponds to live hinnies, mules, donkeys and horses.
  • 0102 corresponds to live bovine animals.
  • 0103 corresponds to live porcine animals.
  • 0105 corresponds to the animals of domestic species such as live turkeys, geese, ducks and chickens.
  • 0106 corresponds to live animals not mentioned in the previous classification.
  • From 6 to 14 products of plant origin are grouped.
  • From 16 to 24 the food industries are grouped.
  • From 28 to 38 the chemical industries are grouped.
  • From 72 to 83 metals are grouped.
  • From 86 to 89 transport materials are grouped.

Once you make a correct tariff classification you get the ISAN, IEPS, VAT, IGI, and IGE rate and you also get the non-tariff regulations and restrictions.