How is the Tariff Classification or Numeric Coding Structured in Mexico?

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Have you ever faced delays or penalties due to errors in the Tariff Classification of your goods? 


Many companies, like yours, are not exempt from this inconvenience, resulting in unexpected bills, delivery delays, or even the seizure of products. Not to mention the negative impact this can have on your business’s reputation. 


The good news is that there is a solution. By staying up to date on how the Tariff Classification structure works in Mexico, you can transform your import and export processes. 


What is the Tariff Classification of Goods in Mexico? 


Imagine the world of goods as a large library, with each product being a unique book with its own identification label. That label is what we know as Tariff Classification. 


In Mexico, it is a structured numerical system that assigns a unique code, known as a tariff heading, to goods being imported or exported. It is based on the Harmonized Commodity Description and Coding System (Harmonized System or HS), adopted by 95% of countries and in effect since January 1, 1988. 


This international procedure, developed by the World Customs Organization (WCO), uses an eight-digit numerical code to identify each product. 


Here’s how it works: the first two digits are for the chapters that group goods generally according to their nature and industry; the third and fourth digits are for headings according to their usage characteristics; the fifth and sixth digits are for subheadings to provide a detailed identification of the goods. 


The first six digits are common globally and refer to the physical, chemical, and usage characteristics of the goods. The digits following these are assigned by each country and vary according to the commercial policies of each nation. 


For example, within the chapter dedicated to food products, there will be headings for meats, fruits, cereals, and more, each with its respective subheading and numerical code. 


Specialists in Tariff Classification must be familiar with current customs legislation and the explanatory notes of the Harmonized System, which provide guidance on interpreting the codes. 


Especially because a mistake can result in excessive tax payments or penalties by customs authorities. 


As you can see, knowledge will not only help you avoid penalties and delays, but it will also optimize your operations and allow you to compete more effectively in the global market. 


If you’re ready to ensure your company not only complies with regulations but also excels in an increasingly competitive market, we invite you to learn more in the following article. 


Benefits of Tariff Classification 


This universal language has significantly impacted commercial operations, both in imports and exports, offering multiple advantages: 


  • Control over imports and exports: This helps protect the national economy, prevent the entry of illicit or dangerous products, and ensure that all commercial and sanitary regulations are met. 
  • Access to tariff preferences: Many countries have trade agreements that offer tariff benefits to certain products. Correct classification will allow you to take advantage of them and increase your products' competitiveness in the international market. 
  • Greater transparency: Tariff Classification provides detailed information on the flow of goods at an international level. This contributes to greater accountability in trade and facilitates the detection of unfair practices. 
  • Promotes systematic classification: This reduces ambiguity and misinterpretations, allowing for better organization and more effective management of goods. 
  • Avoids customs issues: By complying with established laws, businesses save on fines and additional costs arising from inconsistencies or errors in classification. 
  • Optimizes trade exchange and information transfer: This opens the door for product data and their classifications to be transferred quickly and accurately, boosting efficiency in commercial transactions and minimizing processing time at customs. 
  • Helps establish description, classification, and coding: Not only does it contribute to the accurate identification of products, but it also facilitates the application of specific tariffs and regulations for each category. Therefore, clear descriptions and coding ensure that goods are handled according to their specific characteristics. 
  • Collects statistical elements: The data helps analyze trends, identify opportunities, and challenges in the market. In fact, the availability of this information is key to developing effective trade policies and competitive market strategies. 


The tariff heading identifies the product based on its characteristics and establishes the following aspects: 


A. Determines the General Import Tax (IGI): Depending on the heading, one of these tariffs may apply: 


  • Ad valorem: Expressed as a percentage of the product’s value. 
  • Specific: A fixed amount per imported unit. 
  • Mixed: A combination of the above two. 

Additionally, the tariff heading may establish other taxes like VAT, ISAN, or IEPS. 


B. Preferential Tariff: This applies according to agreements such as Free Trade Agreements or Sectoral Promotion Programs in Mexico. 


C. Compensatory Quotas: These extra fees are added to goods imported under price discrimination or subsidy conditions in their country of origin. 


The corresponding tariff heading must be identified in the compensatory quota notice of the Foreign Trade Law, issued by the Ministry of Economy. 


D. Non-Tariff Regulations and Restrictions (RRNA): The tariff heading also determines the non-tariff regulations and restrictions that must be met for the entry and exit of goods, ensuring compliance with all regulations. 


Conclusion 


Do you want to ensure that your goods reach their destination without problems and without additional costs? 


For companies involved in international trade, understanding and using the tariff classification system is crucial to avoid penalties and ensure efficient operations in accordance with current regulations. 


And above all, because it is based on the General Import and Export Taxes Law (LIGIE) and the Harmonized System (HS) Convention, providing a clear and detailed structure that facilitates the control and management of goods entering and leaving the country. 


At KENSA Logistics, we understand the complexities of international trade and are here to help. 


Our team of specialists not only has the necessary experience but is also ready to offer you comprehensive support to facilitate your foreign trade operations. From the correct assignment of tariff codes to the optimization of your logistics processes. 


Take the next step towards excellence and contact us today.