VAT on digital services bill submitted to Mexico’s Chamber of Deputies

As of April 2020 (if approved) nonresident entities that provide digital services would be subject to 16% VAT rate if the recipient is located within Mexico, and the service is provided through applications or digital content, over the internet, and the process is primarily automatized. Such VAT will be determined upon the payment of the service rendered.

This provision specifically includes certain services such as the downloading of images, movies, text, videos, games, data storage, online training, as well as the mediation between unrelated parties for the acquisition of goods or services.

The recipient would be considered as located within Mexico if; i) an address located within national territory is declared, ii) the payment is done through a national intermediary (bank), or iii) if the IP address used in the electronic devise receiving the services is located within Mexico.


Source EY