resources-post-top-bg Mexico: Digital Services

Mexico: Digital Services

VAT News Updates

30th March 2020: From 1 June 2020, Mexico plan to collect VAT at a rate of 16% on the sale of certain goods and services to cover digital services providers.

Mexico has announced plans to extend its VAT system to cover digital services providers to collect VAT at a rate of 16% on the sale of certain goods and services in Mexico.

New rule implemented from 1 June 2020

This will come into effect from 1 June 2020 and will apply to all suppliers – the reform does not distinguish between B2B and B2C transactions.

At present, foreign businesses that provide digital services in Mexico do not charge VAT on their sales.

This new rule will attempt to remove the advantage non-residents have over Mexican resident providers.

New orders in place for businesses and VAT registration

Businesses will be required to be VAT registered, appoint a local Fiscal Representative and have a Mexican address.

The following list pf providers are subject to the rules and responsible for the collection, reporting and payment of the VAT.

  • Category 1: Providers of downloading/access to images, movies, information, music, text, video, gaming, news online, weather, traffic, online clubs, dating sites and other multimedia content, on-line learning, tests and exercises. Examples of companies affected – Uber, Netflix & AirBnB.
  • Category 2: Those that perform intermediation services between potential sellers and buyers of products and services.

 

Global VAT Updates relating to Covid-19

As businesses begin to realise the impact that the fight against the Coronavirus will have, tax authorities have begun to communicate simplification and deferment measures to help affected businesses. At Taxback International, we are continuing to monitor this situation and will provide updates as they are released. You can see the latest global tax and VAT updates for COVID-19 by clicking here.

See more Taxback International Articles

Businesses can avail of VAT reclaim to boost their cash flow during Covid-19 crisis

16 March 2020: VAT reclaim can boost your company's cashflow right now.

Mexico: Tax reform for 2020: Focus on digital taxation

11th February 2020: Mexico’s Congress approved a bill to impose VAT on digital services supplied by foreign businesses.

Oil and Gas companies can increase VAT reclaim by an average of 50%

24 February 2020: Taxback International eliminate the VAT burden for many clients across the Oil and Gas sector, providing realtime visibility every step of the way.