Mexican VAT to apply to e-services from 1 June 2020

3 February 2020

Mexico is set to extend its Value-Added Tax (VAT) system to cover digital services supplied by non-resident (foreign) companies from 1 June 2020.

At present, foreign businesses providing digital services in Mexico do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage this gives to non-resident companies over Mexican resident providers, the Mexican government has now announced that VAT at 16% will be applied on these types of transactions from June 2020.

This new tax will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.
 

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