Mexico Enacts the 2020 Tax Reform

The Mexican Congress has approved the 2020 tax reform, The most important changes of this reform in relation to VAT is the establishment of a new system of the taxation of digital goods and services supplied by non-established entities to final consumers in Mexico. Under this new regime, foreign suppliers of digital goods and services will be required to collect VAT and pay it to the tax administration, effective June 1, 2020. Another important change in relation to the VAT will be the new withholding regime that will affect outsourced services in Mexico. The reform also affects the excise tax known locally as IEPS, as well as supplements of the CFDI related to withholding of payments and some transactions related to real property.