🇲🇽 Update on VAT WHT for Digital Platforms in Mexico

Recently, Mexico's tax authority (SAT) introduced the Second Resolution of Modifications to the Miscellaneous Fiscal Resolution for 2024, establishing new VAT withholding obligations for digital platforms that act as intermediaries in the sale of goods.

📝 Key Highlights:

1️⃣ Withholding Obligation: Platforms must withhold 100% of the Value-Added Tax (VAT) on goods sold through their platform when they act as intermediaries for sellers. This applies to both nonresidents without a permanent establishment in Mexico 🌎 and Mexican residents 🇲🇽. This withholding applies when platforms collect payment and VAT on behalf of the seller and deposit the funds into bank accounts outside Mexico 🏦.

2️⃣ Compliance Steps for Digital Platforms:

• Seller Statement: Obtain a statement from sellers confirming their foreign bank account details 🏦 and their consent for VAT withholding. This can be collected via the platform’s website, app 📲, or in writing.

• VAT Submission: Submit the withheld VAT using the “Declaration of Payment of VAT Withholdings for the Use of Technological Platforms” form 📅 by the 17th of the month following the month of collection.

• Issuing CFDI: Issue a CFDI (digital tax receipt) 🧾 within five days after the month of withholding. The CFDI must detail the payment amount, withheld tax, and include the “Technological Platforms Services” supplement 📄, soon available on the SAT website.

• Reporting Requirement: Report transaction details as outlined in Article 18-J, fraction III of the VAT Law 📑, indicating that VAT withholding has been applied.

3️⃣ Seller Deduction: Sellers can deduct the VAT withheld under this rule from their total monthly VAT obligations in activities where tax was withheld 📉.

⚠️ Important Considerations:

• Scope: The rule doesn’t specify if it applies to goods located in or outside Mexico at the time of sale, but it appears aimed at foreign sellers 🌐 using intermediating platforms with payments deposited into foreign bank accounts.

• Nonresident Seller Approval: The rule is unclear on whether nonresident sellers must explicitly approve VAT withholding through the statement or if this withholding fully satisfies their VAT obligations in Mexico.

• New CFDI Requirement: Nonresident platforms will now be required to issue CFDIs for these transactions—a requirement not previously applied to nonresidents facilitating sales of digital services 💻.