• TAXES: Starting in June, digital platforms operating Mexico such as Netflix and Xbox Live will be forced to collect Value Added Tax (VAT, or IVA in Spanish) for every transaction while others like Airbnb and Uber will also have to retain income tax (ISR, in Spanish) from their local partners.
• DEBATE: Originally passed by the Mexican Congress back in October 2019, the changes pushed by the Mexican Finance Ministry are expected to bring revenue from a growing sector of the economy but also to increase prices for consumers, per accounting experts.
• IMPACT: “The moment we play on the internet, that we download a song, that we watch a movie, we will have to pay the corresponding (VAT) and it will definitely have a direct impact on the price on least 16% more”, says Jaime Rojas, head of the advisory firm Asesoría Fiscal Skatt.
• ESTIMATES: According to 2017 estimates by the UN’s Economic Commission for Latin America and the Caribbean (ECLAC), the value of Mexico establishing a VAT on digital services would could reach USD 179 million, the largest in the whole region, while in Brazil it would be USD 153 million.
