Mexico's Treasury Enforcement Agency (SAT) assesses a value added tax (VAT) equal to 16% of the value of a good or service. When Mexican companies that carry out manufacturing activities import goods into the country, the VAT is due at the time of importation unless the importer is certified by the government to receive an exemption for this tax. The reason some companies are eligible for a VAT exemption on importations and others are not, is that certain companies import raw materials to produce finished goods that are subsequently exported from Mexico. Because the VAT is a tax that the ultimate consumer pays for a good or service, exporters such as foreign manufacturers operating in Mexico typically do not sell the manufactured goods in Mexico.
To ensure that companies that receive the VAT exemption are subsequently exporting the goods imported and not selling them in the Mexican market, the Mexican government obligates the importer to provide periodic inventory reports to demonstrate traceability of the value of goods imported, the value of goods exported and the value of goods on hand. This obligation is known as "Anexo 31" which became effective January 1, 2015 and pertains to a set of regulations belonging to Mexico's Department of International Trade.