Mexico To Tax Digital Services From Other Countries

Mexico passed a law this week that taxes digital services from other countries, according to a report.

A 16 percent value-added tax (VAT) will be tacked onto digital services starting on June 1 of this year. The law will apply to all services, even B2B transactions. The tax will cover all online applications, including video, audio streaming, images, education and others.

There are stipulations for what constitutes a Mexican recipient to determine eligibility for the tax. The person must be a resident of Mexico, and payment must be made through an intermediary. The telephone number of the service provider must have Mexico’s country code and the IP address must correspond to the country.

The providers will have to register for VAT in Mexico and get a tax identification number. They are also required to appoint a legal representative in Mexico for notification purposes and must register in the month of June.

In other Mexico news, Walmart saw a 2.7 percent year-over-year increase in sales for stores that have been open longer than a year. Walmart is Mexico’s biggest retailer. In 2013, they opened 214 new stores in the country. There are 3,400 total Walmart stores in Mexico, representing the company’s largest market outside of the U.S. In 2019, the retailer opened 134 stores and grew its footprint in the country by 5 percent.

A majority of the new stores are part of the Bodega Aurrerá chain, which offers more discounts to customers. Bodega Aurrerá is Walmart’s reply to competitors opening simpler marketplaces. Company spokesperson Gabriela Buenrostro Ortega said that the continued expansions would enable Walmart to keep offering the best possible value for Mexican families, while continuing to work for the betterment of the Mexican people. She said the expansion of stores would also allow the retailer to provide thousands of new jobs.