As we know, derived from the 2020 tax reform, various formal obligations were imposed regarding reporting, withholdings, and tax payments by foreign residents with or without permanent establishment (PE) in Mexico who provide digital services, or who render digital intermediation services in the national territory.
By the above, the Tax Administration Service [in Spanish: el Servicio de Administración Tributaria] (SAT), announced on May 12, 2020, through the FIRST Resolution of Modifications to the Miscellaneous Tax Resolution [in Spanish: la PRIMERA Resolución de Modificaciones a la Resolución Miscelánea Fiscal] (RMF 2020), for 20201, a series of rules regarding the digital economy.
Thus, residents abroad without PE in Mexico, providing digital services will be subject to the following:
I. They must make the Value-Added Tax payment (VAT) [in Spanish: el Impuesto al Valor Agregado] (IVA) through the: “VAT Return for the provision of digital services” no later than the 17th day of the month immediately following that corresponding to the payment.
II. The filing of the tax return, under the terms in the previous paragraph, relieves them of the obligation to comply with the informative quarterly return regarding the number of services or operations performed.
For their part, residents abroad with or without PE in Mexico providing digital intermediation services in the national territory will adhere to the following provisions:
A. Income Tax [in Spanish: Impuesto sobre la Renta]
I. Calculate the Income Tax (ISR) withholdings of the natural persons that transfer goods or provide services through technological platforms, computer applications, and the like according to the daily withholding rates.
II. The payment of tax withholdings must be made through the: “Income Tax withholding return for technological platforms” no later than the 17th day immediately following the month in which the withholding was made.
III. The basis for calculating the withholding will be the income effectively received by individuals, through technological platforms, computer applications, and the like.
B. Value-Added Tax
I. The payment of VAT withholdings applicable to individuals who transfer goods or provide services through technological platforms, computer applications and the like, will be made through the: “VAT withholding return for technological platforms” no later than the 17th day of the month immediately following the month in which the withholding was made.
II. The monthly VAT informative return must be filed no later than the 10th of the month immediately following that to which the information corresponds, through the “Informative return of digital intermediation services between third parties”.
III.The prices of goods or services offered by (I) sellers; (II) service providers; or (III) the grantors of temporary use or benefit of goods, published through websites, applications, platforms, or any other similar media, may not expressly show the VAT amount separately as long as it is included in said prices, and they are published with the legend “VAT included”.
It should be noted that the returns mentioned above, for both the Value-Added Tax and the Income Tax, must be filed following the: “Return filling out guide” that the SAT will publish for such purposes.
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