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For years, people have been making in-kind donations of goods to Mexico. Unfortunately, a lack of understanding of the legal process has led to problems getting the donations to the appropriate recipients. Recognizing the lack of understanding that most donors have about in-kind donations, this Guide has been developed to help those who want to give items to Mexico while also being in compliance with Mexican law. The Mexican tax authority, the Servicio de Administración Tributaria, or SAT, has established a relatively simple process for giving goods to Mexico through in-kind donations to a specific class of Mexican non-governmental organizations (NGOs) known as Authorized Donees (“Donatarias Autorizadas”).1
The International Community Foundation, Fundación
Internacional de la Comunidad, and Mexican
Congressman Carlos Torres Torres from Tijuana have
written this Guide to help U.S. donors better
understand this process.
To facilitate in-kind donations, the SAT has streamlined
its authorization process by introducing an online form
- the electronic form (“firma electrónica”). The “firma
electrónica” allows for faster processing of a donees
request to receive in-kind donations. Although this
improvement has made the process faster, there are
other factors besides time that should be considered. It
must be pointed out that in-kind donations are not
without costs to both the donor and recipient.
Applicable expenses may include transportation to the
U.S./Mexico border, warehouse/storage facility costs;
staff time in the U.S. and Mexico to process the
paperwork; and transportation within Mexico.
Authorized Donee beneficiaries may be able to absorb
some of these expenses, but donors should be aware
of the potential hardship that may be placed on the
organizations receiving the donations. For this reason,
in-kind donations that are accompanied with a cash
grant often make the most sense to ensure that the
donation will arrive at its intended location and be
used for the intended purpose.
It is encouraged that donors and recipients follow the
rules and regulations for making in-kind donations to
Authorized Donees in Mexico. While many
individuals/donors may have the best intentions to
donate items to Mexico, the consequences for bringing
illegal items across the border can be severe. For
example, if an individual gets caught illegally bringing
used clothes into Mexico, the clothes may be
confiscated, the car could be impounded, or worse,
one could face criminal charges. The hope is that this
Guide serves as a useful reference that helps support
in-kind donations and encourages goodwill between
the U.S. and Mexico.
This Guide concerns in-kind gifts meeting
the following conditions: 2
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Donated goods or commodities are
in good condition and are valued in
excess of US$300; and
-
Donations are made to registered
Authorized Donees;
By following these rules, donors may
avoid paying duties on the donated
goods in Mexico and may also seek tax
deductions for the donation in the U.S.
1 Mexican Authorized Donees may have juridical personality under
different legal forms. The principal legal forms are “Asociación Civil,”
(A.C.), “Institución de Asistencia Privada” (I.A.P.); and “Institución de
Beneficiencia Privada.” Organizations with Authorized Donee status have
the right to issue receipts to donors in order for the donors to receive tax
deductions from Mexican income tax. These receipts may also support
deductions from U.S. income tax under an applicable U.S.-Mexico treaty. In
exchange for this preferential status, Authorized Donees follow strict
reporting requirements regarding their receipt and use of donations.
2 The process described in this Guide is not designed to instruct
those interested in the casual donation of toys or clothing. |
