Mexico proposes the implementation of VAT on e-commerce supplies

1 August 2019

The Mexican senate is proposing to levy VAT at 16%, on digital e-commerce supplies provided to consumers by non-resident online platforms.

At present, non-resident online platforms do not have to charge VAT on their sales in Mexico. However, in an effort to remove the unfair advantage that this gives to non-resident companies over Mexican resident providers, the Mexican senate proposes that VAT at 16% will be applied on these types of transactions from as early as January 2020.

If introduced, the VAT on these transactions will be withheld by the payment providers, who will pay this direct to the tax authorities.  This in principle will mean that the foreign supplier will not have a requirement to VAT register in the country.

This follows Argentina, Colombia and Uruguay who have also imposed VAT on foreign online platform providers.

E-commerce VAT

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VAT registration

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