As of 1 June 2020, Mexico will start imposing a 16% VAT rate on Digital Services provided by foreign suppliers. In this regards, the Internet Latin America Association (ALAI in Spanish), a group representing big Internet companies such as Amazon, Google, Facebook, Mercado Libre and much more, has issued a letter asking the Mexican government to delay the implementation of this measure due to a lack of clear rules.
According to the letter, ALAI states that the pilot program carried on to try the new measures only include one business model which do not represent the whole digital sector. The group is worried that the new changes create excess charges for consumers and service providers and double taxation.
The statement finishes by asking the Mexican authorities to delay the implementation of Digital Service taxes until 1 January 2021, a 5 months postponement.
GVC will be taking a close look to this developments. If you need further information about VAT on Digital Services in Mexico do not hesitate to contact us.