Notitur January / February 2015

2015

January February

» Sustainability What is Earthcheck? » Connections Sustainable resource management: A Shortcut to return on Investment.

WePlann an example of how

technology has revolutionized

the tourism industry

Publication of:

www.amdetur.org.mx

» AMDETUR Actividades y Agenda

» Legal Aspects OCDE: Lineamientos Internacionales del IVA para Operaciones Fronterizas.

BOARD OF DIRECTORS CHAIRWOMAN

Ana Patricia De la Peña Sánchez Original Resorts VICE PRESIDENT Gerardo Rioseco Orihuela PROVAC Posadas EXECUTIVE Gonzalo Maqueda Cornejo President AMDETUR

SecretarY

Carmen Carballido Starwood TREASURER Jorge E. Téllez Landín Sol Mar

COUNCIL MEMBERS

Fernando Azcona Lizárraga / Villa Group Javier Robles / Grupo Vidanta Francisco Medina / Grupo Hotelero Santa Fe Gibrán Chapur / Palace Elite Marcos Agostini / Interval International Ricardo Montaudon Corry / RCI

Director

JANUARY FEBRUARY 2015 04

Rosa de Jesús Lugo Dorantes

Notitur CHAIRWOMAN

Ana Patricia De la Peña Sánchez Original Resorts VICE PRESIDENT Gerardo Rioseco Orihuela Grupo Posadas EXECUTIVE Gonzalo Maqueda Cornejo PRESIDENT AMDETUR publisher Raymundo Hernández DESIGN KEMCS Diseño y Marketing www.kemcs.com TRANSLATION Elizabeth Collins Morrison elizcollins@mac.com PHOTOGRAPHY José Mata / www.pbase.com/ppmata Amdetur Cel. (04455) 1885 8581 ADVERTISING Raymundo Hernández C. raymundo.hernandez@amdetur.org.mx rayhernandezlcc@gmail.com

LOCAL ASSOCIATIONS

C.P. Javier Vales González, Asociación de Clubes Vacacionales de Quintana Roo, A.C. / Lic. Alejandro Lemus Mateos, Asociación de Desarrolladores y Promotores Turísticos de Tiempo Compartido, A.C. (Puerto Vallarta) / Sr. Paul Wesley Little, Asociación Sudcaliforniana de Desarrolladores de Tiempo Compartido, A.C. / Ing. José Luis Centeno, Asociación de Promotores de Clubes Vacacionales del Estado de Guerrero, A.C. / Lic. Fernando de Leeuw Santiago, Asociación de Clubes Vacacionales de Cozumel, A.C. / C.P. Fernando Alaniz Cárdenas, Asociación de Clubes Vacacionales de Sinaloa, A.C. / Lic. Cristhian Orozco Oseguera, Asociación de Desarrolladores y Operadores Turísticos de Ixtapa y Zihuatanejo, A.C. / Ing. Guillermo Dávila Espinosa, Asociación de Desarrolladores Turísticos de Manzanillo y la Costa Alegre, A.C. Notitur Digital is a bimonthly online publication, published by the Asociación Mexicana de Desarrolladores Turísticos, A.C. (Amdetur), WTC, Montecito # 38, Piso 32, Oficinas 11 – 14, Col. Nápoles, Mexico 03810, D.F. Phone and fax (55) 5488 2028 to 31. It is a sister publication to the printed magazine Notitur, whose registry numbers are: Certificate of Valid Title no. 3856, dated April 19, 1989; Certificate of Valid Content from the Comisión Calificadora de Publicaciones y Revistas Ilustradas no. 3172, dated April 19, 1989; Reserve Certificate Number 04-2005-030817343600-102 from the Instituto Nacional del Derecho de Autor, Ministry of Public Education. Amdetur is not responsible for the advertisements or “advertorials” published in Notitur Digital. Notitur treats personal information on its subscribers accoridng to the privacy standards of the Federal Law on the Protection of Data Held by Private Parties. For more information on our privacy policy, visit our webpage at: www.amdetur.org.mx.

If you would like to receive the digital version of Notitur, in English or Spanish, you can request it at: raymundo.hernandez@amdetur.org.mx Comparta esta Revista

Or dowload it directly: issuu.com/notitur/

sustainability WHAT IS EARTHCHECK?

EarthCheck is the world's leading environmental benchmarking and certification program designed specifically for the travel and tourism industry. Operated and owned by EC3 Global in Australia, the program is based on the Agenda 21 principles and operates in more than 70 countries around the world.

EarthCheck’s patented science was developed over a 13 year period by the Cooperative Research Centre for Sustainable Tourism (STCRC) in Australia. The STCRC is comprised of seventeen Universities and research institutes and has become the world's largest dedicated Research Centre specializing in sustainable tourism. The ultimate goal is to help the STCRC, companies and destinations turn good intentions into measurable results that are good for business and good for the planet.

AmdeturMx

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AMDETUR Amdetur ACTIVITIES

HAPPY 2015! With this first issue of our digital magazine NotiTur, we wish all our members and readers a 2015 full of success and prosperity. We are grateful for the support preference you have shown us over the years.

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AMDETUR and SEMARNAT continue working together on the Official Mexican Standard entitled “Specifications for environmental protection and mitigation of the adverse impact of climate change on the planning, design, construction, operation and withdrawal of tourist real-estate facilities in coastal ecosystems.�

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The Organization for Economical Operation and Development (OECD) has the mission of promoting policies to improve economic and social welfare of people around the world1, so it takes actions to meet those needs, among which have been proposing measures to avoid the disorderly application of Value Added Tax (VAT) on cross-border transactions, above all and in particular, in the sale of services and intangible goods.

ARTICLE WePlann, an example of how technology has revolutionized the tourism industry

The Internet has changed the way we understand communication and business, and has transformed traditional models in the tourism industry, toward placing the traveler at the center and the destinations in second place. It has also turned travel into an experience that goes far beyond the trip in itself and includes all phases of the journey: from discovery to planning, to destination activities and dissemination of the experience from social networks.

LEGAL ASPECTS OCDE: INTERNATIONAL VAT GUIDELINES ON CROSS-BORDER TRANSACTIONS

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CONNECTIONS SUSTAINABLE RESOURCE MANAGEMENT: A SHORTCUT TO RETURN ON INVESTMENT

The term "ergonomics" was coined in 1949 in the United Kingdom, and refers to the discipline of designing tools and tasks to coincide with the needs of the human being. These foundations have been revisited over time and in practice, and was even appropriated in the cultural context of ancient Greece.

Clearly, it is a concept that is self-explanatory, since we feel it day-to-day in practically every daily activity: when we sit down in an enticingly comfortable chair or simply using the small device that moves the cursor on the screen of our personal computer and fits almost perfectly into the hollow of our hand.

www.amdetur.org.mx

AMDETUR

Amdetur activities HAPPY 2015!

With this first issue of our digital magazine NotiTur, we wish all our members and readers a 2015 full of success and prosperity. We are grateful for the support preference you have shown us over the years.

TIMESHARE CERTIFICATION COURSE On February 13th, 2015, a new Timeshare Certification The certification program consists of 80 hours divided Course will be offered by the Mexican Association of Resort into 4 modules that are given in 4-hour sessions: Developers (AMDETUR) together with the Center for Higher Studies of San Angel (CESSA), giving industry professionals Module 1. Tourism and vacation ownership the opportunity become acquainted with and analyze Module 2. Industry structure the timeshare business and its environment, structure Module 3. Business model and operation, and supporting better decision-making by companies and resort developers, vendors and service Module 4. Operation and service providers, for the ultimate purpose of generating value and For more information, call 54 88 20 28 al 31 or email sustained growth. amdetur@prodigy.net.mx.

The certification course is aimed at professionals, managers, administrators, and operational, marketing and sales personnel in the tourism industry who are interested in acquiring a deeper and more up-to-date knowledge of the timeshare model and its environment.

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JANUARY / FEBRUARY 2015

AMDETUR

AMDETUR and SEMARNAT continue working together on the Official Mexican Standard Entitled “Specifications for environmental protection and mitigation of the adverse impact of climate change on the planning, design, construction, operation and withdrawal of tourist real-estate facilities in coastal ecosystems.”

In the month of September 2014, Mexico's Ministry of Environment and Natural Resources, SEMARNAT, called various institutions together to be part of a workgroup on the Official Mexican Standard (or NOM) that will determine specifications for environmental protection and mitigation of the adverse impact of climate change on the planning, design, construction, operation and withdrawal of tourist real-estate facilities in coastal ecosystems. AMDETUR attended that meeting as a representative of the private tourism industry, specifically, resort developers, to learn about the details of this project and help improve it.

This Official Standard originated with a study carried out by the Ministry of Tourism, through the SECTURCONACyT Sectorial Fund and managed by the Institute for Tourism Competitiveness and with technical assistance from the National Institute of Ecology and Climate Change (INDECC), as well as the Natural Center for Disaster Prevention (CENAPRED), whose purpose was "to study the scope of industry vulnerability and generate adaptation programs that respond to the problems of priority tourist destinations…"1 The destinations studied were: Acapulco, Cancún, Huatulco, Ixtapa Zihuatanejo, Los Cabos, Mazatlán, Nuevo Vallarta, Puerto Vallarta, Riviera Maya (Solidaridad – Tulum) and Veracruz (Boca del Río – Veracruz).

The draft of the standard, like any preliminary draft submitted for review by a work group, gave rise to a varying responses, depending on the different interpretation by each of the institutions belonging to the workgroup regarding its terms, focus, spheres of application and definitions. All of these must be more precisely determined to make the document as succinct and technical as possible, and thus to eliminate erroneous interpretations both on the administrative side and among those in charge of applying and overseeing compliance with the standard.

It is the opinion of AMDETUR that the industry is also subject to excessive regulation; as a representative of resort developers, however, AMDETUR has already expressed these concerns to the Ministry and other leading tourism industry organizations. AMDETUR and SEMARNAT are working together, through an open and frank dialogue, to review this document in detail in order to achieve a consensus that encourage compliance with

the standard while contributing to an orderly growth of the industry.

As part of this dialogue, AMDETUR has supplied an exhaustive analysis of the draft of the Standard and its relationship with other provisions, for example those dealing with urban planning, in order to supply SEMARNAT with the fullest possible information on the context in which developers operate, so that this document can benefit all parties involved.

It is indispensable that the Ministry, together with the work group, make the changes necessary to ensure the document is clearer and more precise in its application, and in its relationship with other laws and/or regulations at the federal, state and municipal level. That is why it is very important to involve the opinion of local participants in the work group, because this will afford a broader vision of what this standard to regulate and what is already regulated.

Climate change and its effects have unmistakable effects on ecosystems, not just in our country, but in the whole world. This is precisely why resort developers are already more than aware about the importance of caring for and preserving ecosystems, which are a fundamental aspect of tourist activity, as a way to ensure the best tourist experience and, as a result, a healthier economy for the industry at large. This awareness should also lead to actions to combat the consequences of climate change.

1. Study on vulnerability of the tourist industry to climate change http://www.sectur.gob.mx/programas/planeacion-y-politica-turistica/ ordenamiento-turistico-sustentable/cambio-climatico/estudio-devulnerabilidad-al-cambio-climatico-en-el-sector-turistico/

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AMDETUR

THE MEXICAN TOURISM PROMOTION COUNCIL PRESENTS ITS WORK PLAN FOR 2015 On December 10th, 2014, in the city of Mérida, Yucatán, the Mexican Tourism Promotion Council (CPTM) held its 2015 National Strategic Planning Meeting. It was attended by participants directly responsible for making strategic decisions in the tourist industry, based on the Mexican government’s National Development Plan for 2013-2018, as well as the Sectorial Tourism Program for 2013-2018.

▲ Photo from: http://infobcs.gob.mx/

The purpose of this meeting was to outline the main actions the federal government will take in 2015 to promote Mexico around the world, and to involve state governments, national and international trading partners and the staff of foreign representation offices in aligning strategies and maximizing the impact of efforts to increase the flow of visitors as well as the economic benefits they bring.

A total of 47 international trading partners and 31 national partners, 112 representatives of tourist destinations, 26 directors of CPTM's foreign offices, 46 heads of central offices and three representatives of the Ministry of Tourism (SECTUR) came together for this meeting.

Among the tourism markets Mexico would like to attract or consolidate are: the United States, Canada, Europe, the United Kingdom, and South America, and emerging markets like Australia, South Korea, Japan and China.

The CPTM has created specific strategies for each of these markets, to continue expanding the tourist industry and increasing the economic flows it generates.

The creation of unique and once-in-a-lifetime experiences will continue to be part of The "Live It to Believe It" campaign, which involves the generation of content designed for various social network platforms, and with which the Hispanic market can share experiences and identify with destinations. The use of #MiMexico is indispensable for achieving this objective.

The strategy covers destinations that specialize in adventure, nature, and couples tourism.

In the case of European countries, the strategy is to position our country in the mind of European tourists through a digital campaign called "Inspire My Journey", which will create a sort of social guide to the experiences that European tourists have had in our country and the creation of travel routes that invite more tourists from the old continent to travel to Mexico.

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In the domestic market, the "Vívelo para Creerlo" campaign is being launched to increase the number and frequency of trips within Mexico's borders through various vacation programs.vacacionales.◄

Remember you can see more about Amdetur's activities at our Facebook Fanpage: www.facebook.com/AmdeturMx

JANUARY / FEBRUARY 2015

sustainability

what is EarthCheck?

E

arthCheck is the world's leading environmental benchmarking and certification program designed specifically for the travel and tourism industry. Operated and owned by EC3 Global in Australia, the program is based on the Agenda 21 principles and operates in more than 70 countries around the world.

EarthCheck’s patented science was developed over a 13 year period by the Cooperative Research Centre for Sustainable Tourism (STCRC) in Australia.

The STCRC is comprised of seventeen Universities and research institutes and has become the world's largest dedicated Research Centre specializing in sustainable tourism. The ultimate goal is to help the STCRC, companies and destinations turn good intentions into measurable results that are good for business and good for the planet.

No other certification program in the world has EarthCheck’s database, and its environmental and performance metrics support the baselines and benchmarks included in the program. Its clients include some of the world’s leading travel and tourism companies, and it provides services to operators in 32 industries, including convention centers, cruise ships, casinos and a wide range of communities and resorts.

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sustainability

EarthCheck believes smart business practice and sustainability go hand-in-hand. It focuses on productivity, profitability and performance as well as resource efficiency, eliminating waste and safeguarding the social and natural environment.

The bases for the success of the EarthCheck program are: 1. Globally-recognized standards, designed to face the challenges of climate change and improve organizations’ environmental and social challenges. These standards are reviewed annually to ensure more precise information.

2. Science-based focus for providing service to its members. The program is based on 15 years of accumulated data and research projects supported by its own research center, which brings together renowned scientists, post-doctoral fellows, staff and students from around the world.

3. A holistic focus for meeting the triple bottom line. It offers not only a framework for minimizing environmental footprint, supporting communities and saving operating costs, but also provides an advantage to the market through a competitive focus on long-term sustainability through environmental leadership.

4. Provides business intelligence through a specialized software that generates monthly environmental and financial reports. 5.

EarthCheck helps organizations to identify the gaps in their operating performance, creating opportunities to strengthen or develop effective strategies and becoming a powerful tool for reporting and analysis of an organization’s

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financial sustainability savings based on real-time data.

6. Development of long-term alliances with travel and tourism organizations aimed at achieving and maintaining good environmental and social practice, offering the maximum benefit for all parties involved and providing confidence to concerned consumers who are looking for a credible program with integrity, transparency and scientific rigor.

Products EarthCheck has a set of products designed specifically for meeting the needs of the travel and tourism industry, all of them present in the patented "My EarthCheck" software.

The star product, EarthCheck Certified, has helped clients to save more than USD 500 million in operating costs.

The products include: EarthCheck Certified EarthCheck Construction Design and Precinct Design EarthCheck Communities EarthCheck Events and Responsible Meetings EarthCheck Schools Program EarthCheck Risk EarthCheck Parks EarthCheck Entertainment Programs Consulting Services

For Companies: The EarthCheck Company Standard offers:

Benchmarking - quantitative evaluation of environmental and social performance against benchmarks and best practices in the industry in the region. This is an effective tool that offers clarity and confidence and incorporates

JANUARY / FEBRUARY 2015

sustainability

rigor and transparency into business processes, while reinforcing financial information for shareholders, clients and executive teams.

Certification - the qualitative verification is an evaluation of the environmental and social performance against the EarthCheck Company Standard, carried out by an independent third-party: the approved EarthCheck Auditor.

STEP 2 Benchmarking STEP 3 Compliance

tion

STEP 4 Approach

ifica

For the Community

The Sustainable Communities Program is a worldwide network of leading communities in the world with the goal of obtaining sustainability results. With the support

STEP 1 poLICY

Cert

1. Greenhouse Gas Emissions 2. Energy Efficiency, Conservation and Management 3. Freshwater Management and Rainwater Resources 4. Ecosystem Conservation and Management 5. Management of Social and Cultural Aspects 6. Territorial Organization and Management 7. Air Quality and Noise Control 8. Wastewater Management 9. Solid Waste Management 10. Environmentally Hazardous Substances

Certification Process Map

king hmar Benc

The EarthCheck Company Standard uses a yield-based platform compatible with a wide range of comparative evaluation indicators and key performance areas:

of the comparative evaluation, certification and yield improvement, the program uses EarthCheck science to face environmental and social problems, climate change, waste reduction and management of nonrenewable resources; it also helps communities to measure and monitor their environmental and social impact, to track their yield against their own objectives and the performance of other communities.

STEP 5 Performance STEP 6 Communication

Why are science, technology and innovation so important to EarthCheck?

EarthCheck provides service to operators in more than 32 industries ranging from airports to cruise ships, casinos and convention centers. The "My EarthCheck" platform contains more than 50,000 individual operating yield benchmarks that provide specific data, baselines and performance levels. This platform is cloud-based, providing transparency in sustainability management through comparative evaluation of clients' operating yield against their industry, region and climate zone.

EarthCheck has its own International Research Center, called the EarthCheck Research Institute, in partnership with eight international allies. EarthCheck recognizes the need to take the lead in research and not simply follow existing practice.

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sustainability

The EarthCheck platform is based on data compiled from clients throughout the world. Pilot studies were conducted in the Caribbean, Mexico, Iceland and Australia. The platform was developed originally with direct support of the World Tourism and Travel Council and the Australian tourist industry, with research provided by the STCRC. EarthCheck offers companies sustainability performance management solutions throughout the value chain. My EarthCheck covers all sustainability applications, including carbon footprint, energy, environment, health and safety, procurement, risk and design.

Who are our allies in Mexico?

EarthCheck allies include: The Mexican Ministry of Tourism (SECTUR) The National Tourism Promotion Fund (FONATUR) Also: Aeropuerto de Huatulco, S.A. de C.V. Alltournative Grupo Karisma Banyan Tree Hotels & Resorts Barceló Hotels &Resorts Campo de Golf Litibú Campo de Golf Palma Real Cancun Center Grupo Velas Resorts Centro Banamex William O'Jenkins Convention Center Puebla Expo Center Ex Hacienda de Chautla Excellence Group Luxury Hotels & Resorts Grand Bahia Principe 07

Grand Palladium Resorts Grupo Vidanta Hard Rock Hotels Hotel Coleto Hotel El Tukan & Beach Club Hotel Las Brisas Huatulco Hotel Rancho Encantado Hotel Secrets Maroma Beach Riviera Cancun Huatulco (Community) Hyatt Ziva Los Cabos Ixtapa, Zihuatanejo (Community) Loreto, Baja California Sur (Community) Meliá Hoteles & Resorts (ME & Paradisus) Moon Palace Resort & Spa Mundo Imperial Acapulco Nuevo Vallarta, Bahia de Banderas, Nayarit Occidental Hotels & Resorts One&Only Palmilla Parque Xcaret Parque Xel-Há Poliforum León Restaurantes Toks World Trade Center Veracruz Riviera Nayarit (Community) ◄

JANUARY / FEBRUARY 2015

ARTICLE

WePlann an example of how technology

has revolutionized the tourism industry The Internet has changed the way we understand communication and business, and has transformed traditional models in the tourism industry, toward placing the traveler at the center and the destinations in second place. It has also turned travel into an experience that goes far beyond the trip in itself and includes all phases of the journey: from discovery to planning, to destination activities and dissemination of the experience from social networks.

Today, travel agencies are not only a channel for reserving destination travel activities, but are also the source of expert advice, helping travelers make their trip a complete experience.

WePlann WePlann is an e-commerce business that helps users to discover and reserve incredible travel experiences (tours, day trips, show and attraction tickets) in the best destinations of Europe, the United States and Latin America. It is a quick and easy way to plan a trip in the language and the currency the user desires. This company is the result of three years of work and active listening to users on its predecessor website: iiNewYork.com, an e-commerce site specialized in the sale of tours in New York and Broadway show tickets.

In response to repeated requests from users to find an offering of the same quality and variety in other destinations, and recommendation of our associates, we

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ARTICLE

decided that the time had come to expand our offer, and this is how WePlann was born: a new multi-destination e-commerce with a select offering travel activities at the top destinations in Europe, the United States and Latin America.

"Listening to the user has been key to the success of WePlann."

What advantages does WePlann offered the user?

• A website where they can find an exclusive array of travel activities not always available through local travel agencies, in the world’s top tourism destinations.

• Multi-device (accessible from desktop, tablet or mobile).

• Adapted to the user's language.

• A local payment processor in all main Latin American currencies (Argentine pesos, Colombian pesos, Chilean pesos and Mexican pesos).

• Payment processing through a secure platform that allows users to safely conduct their online transactions.

• Pre-reservation system.

• Tickets are sent to the user long before their trip, so they can be sure to enjoy the activities they want to at the destination. Everything goes as planned.

• Quick and easy: they just have to print out the e-ticket and present it at the meeting point

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The challenges of WePlann One of the most difficult obstacles WePlann has faced has been distrust and fear of online fraud amongst users who only recently began online shopping. Being able to give them peace of mind for their online transactions and the trust to conduct their first online purchase with us has been the toughest challenge, and we are proud to have overcome it.

Another of the challenges we have faced has been offering an extensive array of travel activities in the user's language at the destination. This is been like finding a needle in a haystack. Not all tour operators provide multi language services, and the Destination Services department has been made an effort to supply at least 50% of activities in the user's language.

And finally, the multi-destination offering, creating a website with unique travel activities in the best destinations of the world. To date we have 20 destinations throughout Europe, the United States and Latin America, and we expect to be able to expand this figure by summer of 2015, opening new cities in Latin America.

JANUARY / FEBRUARY 2015

ARTICLE ARTĂ?CULO

The WePlann business model in the tourism industry The strength of our business model, and its main advantage for the tourism industry, is its advanced reservation of travel activities. A bet on helping tour operators to meet their goals: reserving travel activities before arriving at the destination, eliminating competition with other local tour operators and ensuring that day trips and tours are filled weeks or months in advance of the travel date.

in the penetration of smartphones. Finally, another very interesting figure: the inhabitants of emerging economies, like several in Latin America, travel more frequently than those developed economies.

Clearly, a very promising scenario for doing business in and for Latin America. Am opportunity that is worth the risk.

This creates an advantage not only for the tour operator, who receives revenues throughout the year, avoiding some of the seasonality typical of the tourism industry, but it is also an advantage for the traveler, who can make sure they see and do everything they want to on their trip without the slightest concern.

And why Mexico?

According to optimistic data, and bear in mind that Mexico is the second most powerful economy in Latin America; Internet penetration in this country reaches 52% of the population, and the most frequently used devices for Internet access are personal computers (62%) and smartphones (41%). Add to this the fact that studies indicate that Mexicans love to travel (whether for business or pleasure) and travel three times more than the average in developed economies. For Mexicans, there is always a good reason to travel, and if there isn't, they find it.

Importance of the social traveler: how do social networks affect travel decisions?

A bet on Latin America The factors that make Latin America a safe bet are many and varied. First, it is an emerging market (led by Chile, Colombia, Brazil and Peru), with the largest Spanishspeaking community in the world, 414 million Spanish speakers all together, making Spanish the third most widely spoken language on earth, in a business in which the predominant language has always been English.

This is compounded by the economic growth it has experienced in the last 10 years, which has brought infrastructure improvements and created a new social class: the middle class, 50 million people strong, now with increased purchasing power.

Social networks have become a key element in the online purchase of travel activities. Much of their success stems from the fact that there are communities of travelers who seek to help each other, where wordof-mouth is primordial for good brand management, for retaining current clients and attracting new ones.

One of the greatest advantages of this medium is that the clients themselves promote the brand, tourist destinations and destination activities through the content they themselves generate (photographs, videos, quotes, Pinterest boards, music lists on Spotify, opinions and recommendations), assisting in the dissemination and positioning of the brand.â—„

Then there is the growing penetration of Internet, which in 2015 will reach 60% of the population, translating into a total of 2.018 billion users, accompanied by increase

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LEGAL ASPECTS

Por Mtro. José Luís Figueroa Jácome - Subprocurador de Análisis Sistémico y Estudios Normativos de la Procuraduría de la Defensa del Contribuyente.

OCDE:

INTERNATIONAL VAT GUIDELINES ON CROSS-BORDER TRANSACTIONS. Author: José Luís Figueroa Jácome, Deputy Agent for Systemic Analysis and Regulatory Studies of the Mexican Taxpayer Defense Department

G

lobalization has significantly changed the conditions for international trade, which in turn requires that international fiscal policy be modified to adjust to current conditions in order to avoid unfair or illegal practices that discourage trade between countries.

The Organization for Economical Operation and Development (OECD) has the mission of promoting policies to improve economic and social welfare of people around the world1, so it takes actions to meet those needs, among which have been proposing measures to avoid the disorderly application of Value Added Tax (VAT) on cross-border transactions, above all and in particular, in the sale of services and intangible goods.

To this end, the OECD is preparing a set of guidelines that are intended to be used in adapting local legislation in each country as well as in future international accords to encourage economic and social development in the planet as a whole. The international guidelines on VAT are expected to be completed during the course of this year.

So far, the OECD has issued three of the six chapters that make up this series of deliverables, the highlights of which are the following:

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JANUARY / FEBRUARY 2015

Thank You and Our Best Wishes for

One of RCI’s main goals is to provide, at all times, excellence in our service and, especially, quality in each of our products. For this reason, this new year we again make the comittment to always offer you the best; to work with honesty, flexibility, transparency and innovation in all our processes.

We are deeply grateful to you for bestowing your trust in us once again this year and allowing us to be, at all times, your strategic business ally.

Team amdetur.org.mx

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LEGAL ASPECTS

DEFINITION OF THE CORE FEATURES OF VAT The OECD Fiscal Affairs Committee has concluded that VAT on cross-border transactions should be governed by the principle of final destination or consumption, meaning the jurisdiction or country with the right to levy this tax should be that in which the good or service in question is used. Additionally, in general terms these guidelines are prepared based on the principles arrived from the Ottawa Taxation Framework Conditions: Neutrality, Efficiency, Certainty and Simplicity, and Effectiveness and Fairness), which, admittedly, are the product of work carried out some years ago in the context of e-commerce, but they are also generally accepted as part of public tax policy related to the consumption of goods and services. â–ź Tijuana, Baja California Norte

THE PRINCIPAL OF VAT NEUTRALITY This is the central axis of the guidelines the OECD is preparing, with which it hopes to guarantee the levying of equitable taxes and eliminate discriminatory or partial situations, and compliance costs that may be disproportionate or inappropriate, and also in the interests of ensuring that business decisions are motivated by economic rather than tax considerations.

DETERMINING THE PLACE WITH THE RIGHT TO LEVY VAT ON TRANSACTIONS.

1. http://www.oecd.org/centrodemexico/laocde/

In the third chapter of the guidelines, the OECD underscores the cases of the provision of services and intangibles, which, by nature, are difficult to control across borders and where identifying the place with the right to tax them becomes complicated.

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LEGAL ASPECTS

Accordingly, the OECD has proposed a criteria in which the country or jurisdiction with the right to tax these transactions is that in which the client-consumer is located, which can be determined based on what is called the "Business Agreement," which represents the pact between the vendor or supplier of the services and the client or consumer, which does not require any formal documentation except for an express intent, contained in the applicable rule, so the existence and determination of the identity and location of the client or consumer may be proven by any means, including tape recordings, telephone or electronic conversations, or others.

Through this type of international guidelines, an effort is being made to avoid undue or harmful practices that obstruct the growth of the global economy, which, as with technological advance in the constant evolution of the ways we do business, require adaptation in both public policies and rules so that they can provide certainty and security to the national trade at all times.

Conclusions: 1. International trade is changing rapidly with globalization, so new tax schemes are needed to guarantee a fair treatment and encourage trade between countries.

4.VAT is a tax on consumption, so it is logical that the acts or activities should be taxed in the place were the products or services are consumed (the destination principle).

VAT should be standardized for all countries under the principal destination, to avoid discriminatory treatment and avoid having business decisions be influenced by tax aspects.

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CONNECTIONS

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JANUARY / FEBRUARY 2015

CONNECTIONS

SUSTAINABLE

RESOURCE MANAGEMENT A SHORTCUT TO RETURN

ON INVESTMENT By: Sergio Roldรกn @earthgonomic sergio@earthgonomic.com / www.earthgonomic.com

T

he term "ergonomics" was coined in 1949 in the United Kingdom, and refers to the discipline of designing tools and tasks to coincide with the needs of the human being. These foundations have been revisited over time and in practice, and was even appropriated in the cultural context of ancient Greece. Clearly, it is a concept that is self-explanatory, since we feel it day-to-day in practically every daily activity: when we sit down in an enticingly comfortable chair or simply using the small device that moves the cursor on the screen of our personal computer and fits almost perfectly into the hollow of our hand.

For centuries, human beings have sought to modify the environment to improve the conditions that favor their comfort, both individually and as a society. To achieve optimum evolutionary adaptation, however, it is necessary to join various disciplines that contribute to mankind's survival on our planet. For example, according to the theory of evolution and the principles established

by Charles Darwin in 1859, the species and members of that species with traits best adapted to the environment will be those who survive the conditions of the space where they develop. In other words, an organism's survival and quality of life depends on its capacity for adaptation.

Earthgonomics, meanwhile, is the discipline of designing strategies for aligning the capacities of an organism and a human being with those of their global environment; in this specific case, organisms can be living or inanimate,

which means we can consider the development and evolution of institutions, companies and families, among others. In its simplest form, it means adapting human being's presence and interaction with nature. The majority of experts agree that in our phase of evolution as a race, it would be hard for human beings amdetur.org.mx

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to "destroy the planet," but they do believe it that with our disproportionate consumption of natural resources, we are jeopardizing the survival of our own species.

This leads us to reflect on the things we are doing as a species to our environment. We have gone from the basic

principle of adapting to the environment to trying to have the environment adapt to us, toward what we have created

as a lifestyle and the needs that result from it, so today we are part of a development that is totally out of sync with nature. What can we expect from this abrupt change in the natural course of life?

As living beings who inhabit this planet and as organisms that grow, develop and generate changes that transform, we are all autonomous and responsible organisms: governments, companies, individuals. But we also have the capacity to internalize these reflections, even transcend political or geographic barriers. For example, in

recent studies by the European Commission’s Directorate General for the Environment, researchers found that 95% of European citizens consider themselves directly responsible for protecting the environment for their own benefit. These attitudes are reflected immediately, or in the medium term, in the behavior of a specific segment of consumption, which filters through to market supply and demand, not to mention the directly proportional involvement of companies, given that this market and these companies are also organisms, even under the postulations of earthgonomics.

Applying earthgonomics and adapting organisms' needs to environmental resources, and considering the current capacity of the available resources to meet their needs, is today an international trend among environmentally responsible companies and consumers. In other words, they have earthgonomized the way the market works.

But this goes beyond simply giving the market what it wants.

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It also takes into account the subsistence and sustainability of businesses and companies, because ultimately natural resources are the raw material for any industry. Small wonder that some international companies, whose main raw material is water, have set their eyes on renewing the planets aquifers through programs of restoring watershed regions with reforestation and soil conservation.

So protecting our natural heritage is a logical endeavor. The natural wealth of North and South America is particularly enviable, and its qualities as a tourist destination give it tremendous growth potential, generating sizeable opportunities from the business standpoint. That is why it is important to understand that in the tourist industry, opportunities must be visualized from an evolutionary and earthgonomic perspective, simply for the purpose of safeguarding our investments while preserving the raw material of tourist destinations.

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For a sun and sand destination, there is no more important raw material then the beach itself, provided there are conditions of safety, hygiene and cleanliness, but also that visitors participate in an immediate way. But not all of these destinations are beaches and turquoise seas, we must also protect the natural wealth of other ecosystems, like rainforests, jungles and even deserts where we can enjoy majestic sunsets and enchanting story nights.

Tourist spaces are an opportunity for economic growth as well as a focus of attention for adapting human activity and preserving the environment. After all, the survival of this highly productive activity depends on preserving the health and beauty of every one of these places.

Or consider natural phenomena like the Rapaces River in Veracruz where, with a little patience, one can enjoy the spectacle of an atmospheric vortex (a turbulent, spiralshaped flow of air better known as a whirlwind) full of eagles and falcons who use the difference in air pressure to reach tremendous heights and be able to continue their migratory routes by simply gliding, without beating their great wings once. This simple natural phenomenon is in danger of disappearing if we do not find harmonic way for human beings to respect the sites and conditions that permit this event to happen as it should.

In Mexico, these unique natural marvels are invaluable diamonds that must be protected in order to continue enjoying them. But cannot be done without the active participation of responsible entrepreneurs, productive companies, service providers and leading companies that have distinguished themselves for their best practices, for applying international standards based on appropriate labor relations, social support and, obviously, efficient care

for the environment and its natural resources, the raw material of each industry. This is earthgonomics in its most basic sense.

Ergonomics is a relatively young concept that stems from tasks human beings have been carrying out for centuries.

Earthgonomics is another concept, younger still, which encourages today's society to renew reasoning, practices and ancestral techniques that seek simply to preserve the natural wealth around us and motivate a new awareness of the value of our bio-cultural heritage.

Companies that take on the commitment of abiding by ethical and sustainable values will have the opportunity to reap an unparalleled return on their investment by preserving and optimally managing their resources, their natural raw materials.â—„

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