VAT and “Virtual Exports” Under IMMEX: Mexico’s Supreme Court Prepares a Key Ruling for Maquiladoras and Investment
Mexico’s Tax Administration Service (SAT) and a group of manufacturing companies operating under the IMMEX program (Manufacturing, Maquiladora and Export Services Industry) are locked in a high-stakes tax dispute over how Value Added Tax (VAT) should be assessed on certain foreign trade transactions known as “virtual exports.” The litigation—totaling roughly 16 billion pesos, according to figures attributed to the tax authority—could reach a definitive turning point at Mexico’s Supreme Court (SCJN), with implications for the business climate, regulatory certainty, and Mexico’s appeal as an export platform.
At the heart of the debate is whether, in some transactions where temporarily imported goods are sold to a buyer resident in Mexico without physically leaving the country (through virtual customs entries), VAT ends up being “double taxed”: on the one hand, through the conversion to a permanent import and, on the other, through the transfer (sale) of the goods. Companies and experts argue that this would tax the same economic transaction twice; SAT, by contrast, contends there are evasion risks and that the legal framework allows the tax to be assessed based on different taxable events.
The docket includes companies with major export weight; among the most visible cases is Samsung, from which SAT is seeking to collect about 6.714 billion pesos in VAT allegedly not withheld during the 2019–2023 period. The issue is significant: the IMMEX universe is large and is a backbone of Mexico’s external sector. INEGI data cited in the debate points to more than 5,000 IMMEX manufacturing establishments, many integrated into value chains with the United States and Canada.
To understand the dispute, it helps to recall how IMMEX is designed. Generally speaking, a company under this program can temporarily import inputs without paying VAT upon entry, as long as those goods are transformed or incorporated into a production process and later exported. SAT closely monitors the requirement to return the goods, since the tax benefit is justified by the export destination. The conflict arises when, for commercial reasons, part of that merchandise (or the resulting product) is sold in Mexico: at that point, the transaction becomes a permanent import, and VAT must be paid.
The “virtual export” mechanism (using a V5 customs entry) was created as a logistical facilitation: it allows the export and the import to be documented without the goods physically crossing the border. The economic rationale was to reduce costs and time, ease pressure at customs, and minimize unnecessary transportation. However, following changes in criteria and compliance reviews, the tax authority has argued that certain structures derived from that facilitation created room for VAT omissions, and since 2019 it has tightened its interpretation to require the tax in situations where, in taxpayers’ view, it was already covered by virtue of the import event.
A technical component of the case centers on how VAT triggers (transfer/sale and importation) interact with the withholding obligations established in Article 1-A of Mexico’s VAT Law. In practice, when the owner of the goods is a foreign resident and the sale occurs in Mexico, charging and withholding VAT on the sale can become complex. Companies argue that the V5 customs-entry framework and the statutory wording are intended to prevent duplication; the authority maintains that, in certain scenarios, different obligations are triggered by different taxable events.
The Supreme Court must also resolve divergent judicial criteria. In recent years, conflicting rulings have emerged from federal collegiate courts: some have concluded that double collection is not permissible, while others have upheld that it can occur. In light of that contradiction, the Court is positioned as the final arbiter to bring uniformity to the interpretation. For the export sector, the value of the decision lies not only in the outcome, but in the clarity: a stable standard reduces compliance costs, limits litigation, and supports financial planning.
The macroeconomic backdrop heightens the case’s relevance. Mexico has been working to cement its role in regional manufacturing chains, boosted by nearshoring, the relocation of processes to North America, and the resilience of the export sector—particularly in automotive, electronics, medical devices, and aerospace. At the same time, fixed investment has advanced unevenly due to a mix of still-high interest rates (following the anti-inflation cycle), mixed public-policy signals, and bottlenecks such as energy, water, security, and logistics.
In this context, business groups have warned that a lack of tax certainty can slow investment decisions or supply-chain reconfiguration. Concern is amplified by the regional calendar: the USMCA review is scheduled for 2026, a process that—without automatically implying a renegotiation—typically raises companies’ sensitivity to regulatory risks and to changes in rules of origin, customs procedures, dispute settlement, and labor measures. Any signal of uncertainty in tax costs—especially in related-party transactions and foreign trade—tends to show up in risk premiums, budget adjustments, and, at the margin, project delays.
For public finances, the issue is also delicate. In an environment of pressure for higher social spending, infrastructure investment, and security needs, SAT’s revenue-collection efficiency has been a pillar for sustaining income without raising broad-based rates. Still, collection must be balanced against competitiveness: if the final interpretation makes IMMEX operations more expensive by requiring VAT payments that are later creditable only with friction or delays, the financing cost can be significant—particularly for companies with tight margins or long refund cycles.
Looking ahead, the SCJN ruling could drive changes on three fronts: (1) adjustments to administrative criteria and foreign trade rules to reduce ambiguity; (2) redesign of controls and traceability for virtual customs entries to prevent abusive schemes without penalizing legitimate transactions; and (3) companies’ internal reviews of their supply chains in Mexico, especially those that combine exports with domestic-market sales. In any scenario, the outcome will shape perceptions of legal certainty—often as important as labor costs or logistics when deciding on new manufacturing investments.
In sum, the VAT dispute over virtual exports under IMMEX combines a technical legal debate with tangible economic consequences: it can affect exporters’ liquidity and compliance costs, influence the narrative around tax certainty ahead of the USMCA review, and—depending on the standard adopted—reshape customs practices that currently support a meaningful share of Mexico’s foreign trade. The key will be a decision that provides operational clarity and reduces the space for conflicting interpretations.
