Mexico – 30 June 2020 VAT registration required for non resident companies providing digital services

Rendering of Digital Services– June 2020
The digital services provided to recipients located in the national territory will be subject to VAT.
This includes the following:

  • Downloading or access to images, films, text, information, video, audio, music, games, other multimedia content, multiplayer environments, tones for mobiles, display of online news, traffic, climate forecasts and statistics.
  • Those of intermediation between third parties offering products and services and those requesting them.
  • Online clubs and dating pages
  • Distance learning or tests or exercises

Obligations of non-residents without a Mexican Permanent Establishment (PE) for the provision of Digital Services:

  • Get registered in the Federal Taxpayer Registry (RFC) – Tax authorities will disclose the VAT registrations – June 30, 2020
  • Offer and collect the price and VAT expressly and separately. Carry a record of service recipients in the national territory and collections received on a monthly basis.
  • Provide the SAT with service number, type and price, transaction number and recipient number on a monthly basis.
  • Calculate monthly VAT at 16% and file a monthly return.
  • Issue and send the corresponding tax receipts through electronic means
  • Appoint a legal representative and provide an address in Mexico, for notification purposes June 30, 2020

Obligations of non-residents without a Mexican Permanent Establishment (PE) regarding digital intermediation services between third parties:

  1. Post the corresponding price and VAT on their website, application, platform or any other means, expressly and separately.
  2. At the time of collecting the price and VAT, a 50% withholding should be made and reported.
  3. Issue a tax receipt of VAT withholding and become registered with the tax register as a withholding agent.
  4. Provide the SAT monthly with information on clients that sell assets, providers of services or lessors, in whose transactions they have acted as intermediaries.

For further information please contact: Julio César Pinto

Email: julio.pinto@pwc.com

Image source: Unsplash.com

 

 

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