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.
Mexico Enacts the 2020 Tax Reform
Ramón Frias
March 23, 2020
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Author
Ramón Frias
Ramon is a Tax Counsel on the Regulatory Analysis team at Sovos. He is licensed to practice law in the Dominican Republic and is a member of the Dominican Bar Association. He has a Certificate Degree from Harvard University as well as a J.D. from the Universidad Autonoma de Santo Domingo. Ramon has written a number of essays about tax administration and has won the first prize in the international essays contest sponsored by the Inter American Center of Tax Administrations (CIAT). Prior to joining Sovos, Ramon worked for more than 10 years in the Department of Revenue of the Dominican Republic where he served as Deputy Director. He is proficient in French and Spanish.
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