The Maquiladora Industry and the Production of Transportation Equipment in Mexico

The Mexican maquiladora industry is comprised of entities that import raw materials and components duty-free and, in turn, export their finished products, with suppliers paying tariffs only on a value-added basis for work performed in Mexico.

Initially established primarily along the U.S.-Mexico border, in-bond plants now operate in other regions of the country.

By expanding production to these other regions, in-bond plants and suppliers have greater access to a larger and more diverse workforce.

This expansion has also provided in-bond plants with greater access to raw materials made available by Mexican suppliers.

According to preliminary figures, 31.1% of the maquiladora industry’s value added in 2021 corresponded to the production of transportation equipment.

Maquiladora industry

In December 2020, several laws related to manufacturing, the maquiladora industry and imports and exports were enacted that, among other things, harmonized previous import and export laws with the Mexico-U.S.-Canada Treaty (USMCA) and established new tariffs covering certain manufacturing goods.

In order to coordinate the taxation of multinational companies to avoid double taxation and provide greater legal certainty to taxpayers, the Servicio de Administración Tributaria (SAT) and the U.S. Internal Revenue Service have agreed on a standard methodology for assessing income tax transfer prices in the maquiladora industry.

Companies wishing to benefit from this standard transfer pricing assessment methodology should opt for it.


For almost three decades, Mexico has negotiated bilateral tax treaties with more than ninety-two countries to avoid double taxation.

Mexico is a signatory to the 2016 Multilateral Convention on the Application of Tax Treaty Measures to Prevent Base Erosion and Profit Shifting.

Convention member states agreed to amend their existing double taxation agreements to enable the swift implementation of tax treaty-related measures developed as part of the Base Erosion and Profit Shifting Project, a framework covering more than 100 countries and jurisdictions that aims to curb tax planning strategies that exploit loopholes in tax rules.

On November 23, 2018, the signed Convention was sent to the Senate for analysis and approval, which is still pending.


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