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yodave

Oct 17, 2011, 4:36 PM

Post #1 of 27 (1006 views)

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Tax when cancelling a vehicle permit??!!!

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My car was recently stolen. US plates. The insurance co. told me the documents I need to present before receiving a check for the value of the car. One of the requirements was that I cancel my imported vehicle permit. When I called aduana to see what I needed to do to cancel the permit I was told I have to pay a 40% tax on the value of the stolen vehicle!! Apparently this is a new law. I can't believe one has to do this. Does anyone out there have any experience with this or any "alternative" ways to cancel the permit w/o paying this absurd tax?

Many thanks!

yodave

fordmexico

Oct 17, 2011, 6:33 PM

Post #2 of 27 (976 views)

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Re: [yodave] Tax when cancelling a vehicle permit??!!!

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From the Aduana website,

http://www.aduanas.gob.mx/aduana_mexico/2008/vehiculos/141_11258.html

Receipt of insurance proceeds as a result of the vehicle being stolen is treated similar to the sale of the vehicle (to the insurance company).

Here is the Google Translation from the website:

"In case of theft

If you can not return the vehicle due to theft, the importer must comply with the obligations to pay taxes on foreign trade, and if the countervailing duties and other obligations of regulations and restrictions non-tariff barriers. The request for cancellation is filed with the nearest Customs to the effect that the verifier of the goods vehicle perform the assessment and calculation of taxes on foreign trade caused. Once the payment, if within any of the customs of the country's northern border, must be filed with the personnel assigned to module import control and temporary import of vehicles CIITEV , the following documentation:

Promoting free-form written cancellation request signed by the applicant, in an address that points to hear and receive notifications.

Original act (report) of theft executed before the competent authority.

Collated copy of the payment of taxes on foreign trade, which they are incurred.

Copy of title to the vehicle.

Original import permit or temporary import of vehicles (in case you do not have permission or hologram for theft, loss or destruction must be requirements Annex 3).

Copy of a valid official identification. (Passport-Visa)

Similarly, you can choose to send these documents to the Customs Operations Management "3" , which will be notified by certified mail, the result of the request made by the applicant. All promotions importer must be in writing, including name and signature, address and receive notices of hearing, the authority which manages the writing and the reason for the request, and sent, where appropriate: Avenida Hidalgo No. 77, Module IV, first floor, col. Guerrero, Cuauhtémoc, CP 06300, Mexico City

RickS

Oct 17, 2011, 8:41 PM

Post #3 of 27 (947 views)

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Re: [fordmexico] Tax when cancelling a vehicle permit??!!!

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Well, that Google translation was so bad I'm not sure whether or not it confirms what yodave was told or maybe gives him another alternative!

If this is, in fact, reality then reality sucks! A law like this should be ripe for the Supreme Court to overturn ( I know, I know... this is Mexico not the US). First some rat steals your property and then the government steals a substantial portion of what you now don't own. What ever could be the rational behind such a law.

"Say it isn't so" ( Irvin Berlin..... or if you are a great deal younger, Bon Jovi!).

Rolly

Oct 17, 2011, 9:01 PM

Post #4 of 27 (943 views)

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Re: [RickS] Tax when cancelling a vehicle permit??!!!

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The law is not new. It's been around for years.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

cbviajero

Oct 18, 2011, 9:13 AM

Post #5 of 27 (883 views)

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Re: [yodave] Tax when cancelling a vehicle permit??!!!

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That really sucks!I was unaware of this law I brought my 2005 tacoma in 6 years ago,have not renewed the permit as I thought I was covered by articulo 106 and have no idea where the orignal is.Your car is stolen in Mexico and you have to pay the mex guv 40% of the value of said vehicle to get your insurance to pay,que mamadas.
Chris

Reefhound

Oct 18, 2011, 10:00 AM

Post #6 of 27 (873 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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So even if you have full coverage insurance you are at risk for 40% of the total vehicle value? Is this loss recoverable under insurance?

Rolly

Oct 18, 2011, 10:46 AM

Post #7 of 27 (857 views)

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Re: [Reefhound] Tax when cancelling a vehicle permit??!!!

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No, the tax is not recoverable via the insurance policy.
In the past is has been common to make a deal with the government to take 40% of the insurance payout.
I don't know if that is still the way it works.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

panama john

Oct 18, 2011, 10:59 AM

Post #8 of 27 (851 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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Rolly: What happens if your car is stolen and you don't have insurance? You have to pay 40% of the car value to Aduana to cancel the permit?

Rolly

Oct 18, 2011, 11:06 AM

Post #9 of 27 (852 views)

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Re: [panama john] Tax when cancelling a vehicle permit??!!!

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Yes. Or you can just forget about canceling the permit and buy a Mexican vehicle.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

YucaLandia

Oct 18, 2011, 12:29 PM

Post #10 of 27 (831 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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If you choose to abandon your Temporary Permit, by not paying the tax which his equivalent to not taking the car out of the country, you also abandon your future rights to bring in another foreign-plated vehicle from outside Mexico (which is why Rolly advised buying a care here instead).
steve
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Read-on MacDuff
E-visit at http://yucalandia.wordpress.com/

chinagringo

Oct 18, 2011, 1:39 PM

Post #11 of 27 (816 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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Unless I missed something along the way, I never saw a statement to this effect when purchasing the very best policy I could find each time we made a drive into Mexico. My error is thinking that logic works in this case but had I known this up front, I would have paid far greater attention to how much I insured the vehicle for. The Mexican Auto Insurance deductibles are bad enough to negotiate one's way around but this 40% could make for a very expensive trip!
Regards,
Neil
Albuquerque, NM

yodave

Oct 18, 2011, 2:28 PM

Post #12 of 27 (809 views)

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Re: [chinagringo] Tax when cancelling a vehicle permit??!!!

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Here is an update on what I have found out while checking out this absurd law. I spoke with the person in charge of "vehicles" at the US Embassy in Mexico City and she told me most assuredly that what Aduana does is look up the simple blue book value of the vehicle and you are to pay what is called an "importation tax" on that amount. She made it clear that you do not pay 40%(or whatever the per cent currently is)of what the insurance company pays out!

What you pay Aduana is not known by the insurance company. In other words they do not have the evaluation of the value of your car done by Aduana. The insurance co. only gets the one page document indicating you met all the requirements of cancelling the permit.

Why is this important? Well, my car for example has a high Blue Book value when you input all the things it has going for it such as low mileage, excellent condition, options, etc. even though it is a 1996 vehicle. I've ran several BB evaluations and it always comes out to about $7000(it's a Toyota Rav4 which also helps). However, from what this woman tells me Aduana just goes by the year and make and that's it. So a 1996 Toyota Rav4 just "plainly" valued will probably be far far less than $7000.

She also said Aduana's book is scaled as an "importation tax" value, which is lower than what an insurance co. will be looking at, and as I said above the insurance co. doesn't know what value you paid the tax on.

So, for example, my fear was ,from what I've been reading, was that, say my insurance co. pays out $6000 to me(after the $1000 deductible)that I would have to pay a $2400 tax on that amount. But according to this person the tax could be very little due to the age of the car. Maybe as low as a $500 or so, only a wild guess, and then I would get the full $6000 if they value it at that-and I would be out of pocket far less than $2400.

This woman sounded like she really knows what she is talking about and has been dealing with this stuff for years-I hope she's right.

It's still a ridiculous law-especially for some one with a newer car! The basis for it is that people would claim their cars were stolen and really would have sold them illegally to someone and then just cancel their sticker so the government put this law into effect to stop that. It still sucks for us honest folks.

Rolly

Oct 18, 2011, 2:44 PM

Post #13 of 27 (800 views)

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Re: [yodave] Tax when cancelling a vehicle permit??!!!

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Dave, who did you call at Aduana? It's interesting that someone at Aduana said one thing and the USA lady said something so different. Of course, it's Aduana that has the final say. I've heard the 40% number for years.

Please let us know how this all plays out.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

yodave

Oct 18, 2011, 2:53 PM

Post #14 of 27 (790 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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Rolly,

The entire conversation was in Spanish at the Queretaro Aduana(by phone)and the 40% # was clearly stated to me as the impuesto de importacion. I couldn't get into how they come up with the value of the car due to the Spanish being a bit complicated and she was speaking fast and that's why I'm seeking other sources for this info. So the important piece I got from the woman at the US Embassy(and believe me she did not sound like some one who did not know what she was talking about!)was that you do NOT pay 40% of what the insurance company pays out. Aduana doesn't know what the insurance co pays you and the insurance co. doesn't know what you paid Aduana. They are not linked according to her.

I will be speaking to an English-speaking person at the Mexico City Aduana tomorrow. I got her name and # from a guy at Banjercito who I have kept in touch with since getting my vehicle permit online. He tells me she will be able to tell me everything I need to know about the procedure and we'll see how it compares to what the woman at US Emb told me.

I will definitely let everyone know how this plays out-it's an important thing for us all to know.

yodave

yodave

Oct 18, 2011, 2:58 PM

Post #15 of 27 (783 views)

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Re: [yodave] Tax when cancelling a vehicle permit??!!!

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Sorry, I negected to say that Aduana didn't say one thing and the woman at the US Embassy said another. There was no contradiction. Aduana just didn't go into detail on where and how they get the importation tax-the reason being that we just couldn't communicate on that high a level but I should get that info tomorrow at the MC Aduana.

Moisheh

Oct 19, 2011, 8:27 PM

Post #16 of 27 (692 views)

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Re: [yodave] Tax when cancelling a vehicle permit??!!!

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Chinagringo: It realy does not matter what you use for a valuation for your car. Mexican insurance will usually pay the low BB value and often will try for less. If you insure the car for double it's value they will not pay you double that value. The online BB is not the same as the actual BB that dealers and insurance companies use.

Moisheh

chinagringo

Oct 20, 2011, 6:52 AM

Post #17 of 27 (658 views)

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Re: [Moisheh] Tax when cancelling a vehicle permit??!!!

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I don't think that I indicated that I overvalued our vehicle for the purposes of insurance coverage. My concerns were more about liability limits, legal assistance coverage, personal medical coverage and some minor fringe coverages such as roadside assistance, rental car coverage in case of an accident and where repair work could be performed.

Going back to my attempt at using logic, I would think that any coverage documents would have a section warning the insured of this "twist" that many of us had never heard of.
Regards,
Neil
Albuquerque, NM

fordmexico

Oct 20, 2011, 8:39 AM

Post #18 of 27 (641 views)

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Re: [chinagringo] Tax when cancelling a vehicle permit??!!!

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The insurance company has a contract with its insured regarding its responsibilities regarding losses suffered by its insured and should not be responsible for informing them of any tax issues or other governmental requirements..

The owner of the vehicle should understand that the temporary vehicle import permit comes with many restrictions and requirements. These restrictions/requirements are stated in the Banjercito/Aduana websites. It is clearly the responsibility of the person desiring such a permit to understand them and then decide whether or not to temporarily import the vehicle.

The difficulty in this situation arises when the insurance company needs to see the cancelled permit before making payment to its insured. This puts a financial strain on the individual that may not have the funds to first pay Aduana and then wait for the insurance proceeds.

Mexico is equating the insurance payment to the insured due to a total loss or theft as a sale of that vehicle to the insurance company which in fact is what happens.

To legally sell a "foreign" vehicle in Mexico you must first legally import it. When you import a vehicle, you must pay the same taxes and duties federal and state applicable to vehicles sold in Mexico (IGI, ISAN, VAT, ISTUV and DTA) plus brokerage fees.

Conflict always exists between the insurance company and its insured when it comes to determining the "value" of the vehicle in total loss situations. The insurance company will always try to "low ball" the value. The insured should be prepared to counter with his/her value. Typically, you will need to research KBB, NADA and Black Book "wholesale" values. If you have access to auction values (Manheim) you can also use them. If agreement cannot be reached you can go to arbitration. My policy with GNP provides for arbitration when agreement cannot be reached.

A strategy that might work in Mexico is to use used vehicle values in Mexico. They are typically higher than in the USA. This is caused by the same new vehicle costing more here and the lack of an efficient wholesale used vehicle market in Mexico. Although the insurance company would probably argue for a USA value, the insured could argue for a Mexican value since the sale of the vehicle to the insurance company is occurring in Mexico. (One should carefully read the terms and conditions of his/her policy!)

skier14

Oct 20, 2011, 10:01 AM

Post #19 of 27 (619 views)

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Re: [fordmexico] Tax when cancelling a vehicle permit??!!!

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I AM WONDERING IF THE SAME TAX SITUATION APPLIES TO NOB PLATED CARS THAT ARE TOTALED IN AN ACCIDENT OR JUNKED DUE TO AGE OR OPERATIONAL DIFICULTIES.

Rolly

Oct 20, 2011, 11:01 AM

Post #20 of 27 (597 views)

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Re: [skier14] Tax when cancelling a vehicle permit??!!!

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No. Aduana has a procedure for dealing with those things.
It does not include paying anything,

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

RickS

Oct 20, 2011, 11:07 AM

Post #21 of 27 (591 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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So are we saying that there is a tax if the vehicle is stolen and no (or lessor) tax if the car is wrecked/totaled?

Rolly

Oct 20, 2011, 11:22 AM

Post #22 of 27 (587 views)

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Re: [RickS] Tax when cancelling a vehicle permit??!!!

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There is a difference. A stolen car cannot be proved to be out of México, so to get it off the computer, one must pay a tax.
In the case of a wrecked or dead car, it is obvious the car is still in México and is not capable of being removed, so Aduana provides a free pass to getting rid of the carcass and getting it off the computer.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

(This post was edited by Rolly on Oct 20, 2011, 11:23 AM)

chinagringo

Oct 20, 2011, 11:28 AM

Post #23 of 27 (579 views)

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Re: [Rolly] Tax when cancelling a vehicle permit??!!!

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So if a vehicle is stolen, then trashed or parted out and then recovered, one would have to assume the tax would be waived? Second question: what happens when one pays the tax and then the vehicle is recovered at say a checkpoint?
Regards,
Neil
Albuquerque, NM

Rolly

Oct 20, 2011, 11:42 AM

Post #24 of 27 (574 views)

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Re: [chinagringo] Tax when cancelling a vehicle permit??!!!

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I resign from what if games. Ask Aduana.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

YucaLandia

Oct 20, 2011, 11:52 AM

Post #25 of 27 (567 views)

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Re: [chinagringo] Tax when cancelling a vehicle permit??!!!

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After a vehicle is stolen, how would you know if it were parted-out or trashed?

If you recover the stolen vehicle, and it was ruined, then you could get your insurance check, and then turn in the remaining bit(s) to the Mexican Government, as a derelict vehicle that cannot be driven. If your recovered derelict vehicle with the windshield & sticket intact, then the process is easy. If the thieves took the sticker, then the process gets uglier. In either scenario, by turning in the vehicle, you are then free to bring in another vehicle under a Temporary Import permit.
steve
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Read-on MacDuff
E-visit at http://yucalandia.wordpress.com/

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