UPDATE: Mexico to apply VAT to e-services from 1 June 2020

29 May 2020

Mexico has confirmed that it will extend its 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, 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.