03.23.22

Background to digital tax & proposal of new digital tax

Fiscal measures that countries are deploying also demonstrate how obligations for digital businesses are coming more sharply into focus.

Mexico is planning to enact a 2% Digital Services Tax on commission received by online marketplaces. Funds raised will be spent on improving Mexico City’s infrastructure.

This builds on earlier taxation developments in the digital landscape in Mexico which took place in Mexico in June 2020, where Mexico applied 16% VAT on digital services provided by foreign businesses.

The Mexican Tax Authorities have published a list of non-resident companies that have registered for VAT further to the introduction of Mexico’s new digital VAT obligations in June 2020. There is a wide scope of companies affected, showing the extent of companies affected by the digital VAT obligations.

With digital obligations becoming more prevalent globally, we can expect to see other countries enacting similar measures in 2022.