Mexico – Clarification of New E-Commerce Rules

enno Taminga, Andersen US and  Marco A. Ruiz, Andersen México

Mexico – Clarification of New E-Commerce Rules

The 2020 Mexico Tax Reform (MTR) measure imposes new tax compliance obligations on digital platforms operating in Mexico as well as to individuals using them to sell goods, provide services or grant temporary use and enjoyment of goods to Mexican consumers. Specifically, the MTR shifts the burden of VAT assessment, filing and payment to the nonresident service provider even if it has no physical presence in Mexico.

The MTR also imposes a new income tax withholding obligation on payments made to Mexican resident individuals selling certain goods or providing certain services through the internet using a digital platform or application. Although the new requirements have taken effect, complying with them has been difficult in absence of guidance from Mexico’s tax authority on several important issues.

The MTR bill for 2021 proposes amendments to the provisions impacting digital platforms that aim to streamline collection procedures while also authorizing the tax authority to exercise enhanced scrutiny and enforcement for noncompliance.

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Mexico – Clarification of New E-Commerce Rules (Contact)