Value-Added Tax (IVA) is an essential consideration for foreign business owners in Mexico. This tax impacts most sales and services, so understanding IVA is vital for effective pricing and compliance.

1. What Is IVA?
   IVA is a 16% tax applied to goods and services in Mexico. It’s crucial for businesses to understand how IVA affects pricing and revenue, as this tax is typically included in the final sale price.

2. When to Charge IVA
   Not all transactions are subject to IVA. Some essential goods and medical services are exempt, but understanding which transactions require IVA can help avoid compliance issues.

3. Filing and Reporting IVA
   Businesses must report and remit IVA to Mexican tax authorities regularly. Working with an accountant can simplify this process, ensuring accuracy in filings.

4. Reclaiming IVA
   Businesses can often reclaim IVA paid on certain expenses, such as supplies or equipment. This reclaiming process requires documentation, which an accountant can help organize.

5. IVA in Cross-Border Transactions
   For foreign-owned businesses dealing with international clients, understanding IVA on cross-border transactions is crucial. Certain exports and imports are subject to IVA, while others may be exempt.

IVA is integral to business operations in Mexico. Proper understanding and management of IVA ensure your business remains compliant while optimizing tax efficiency.