Amendment to the current VAT Law and the federal fiscal code was submitted to the Chamber of Deputies on 5 of September. The aim is to amend the VAT Law in order to tax services provided through digital platforms by none resident companies. In order words it means that foreign companies without any permanent establishment in Mexico providing services through platforms to customers domiciled in Mexico will be subject to VAT. The bill mentions two options
Foreign companies without a permanent establishment in Mexico would be entitled to opt to pay the VAT directly or they could be subject to the VAT withholding mechanism. In case of the second option – application of the wirholding mechanism – the obligation of collection and payment will be with the intermediaries. Financial institutions and other bodies through which the payment of services is made in advance, would be obliged to collect and to pay the tax due. These persons will be jointly liable for the taxes to be paid.
This is a major change which might be starting in Americas in Mexico but I am quite sure that shortly we will see such changes in many other countries.
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[…] Source Mihaela Merz […]
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