Compliance with the new Mexican Miscellaneous Foreign Trade Rules regarding VAT

On October 10, 2011 modifications to the Miscellaneous Foreign Trade Rules (rule 3.8.4) were published in Mexico’s Official Gazette, and included a change in the application of Value Added Tax ("VAT") to maquila structures. The sale of a virtually exported good to a Mexican resident will now be considered an internal sale subject to VAT withholding, to be remitted by the resident purchaser of the good. This represents an important change in the VAT treatment of virtually exported/imported goods in Mexico.