In June 2020, Mexico introduced special rules for foreign digital service providers. Mexico imposes VAT on non-resident providers of digital services for both B2B and B2C transactions. Non-resident providers should register for VAT and apply for a Mexican tax ID number (locally known as the “Registro Federal de Contibuyentes” or RFC) from the Mexican Tax Administration Service (SAT).

VAT Rate: Typically 16% VAT applied to the sale of affected digital services

Digital Services in Scope

Under the Mexican Value Added Tax Law (Article 18-B), digital services are defined as services provided through applications or content in a digital format via the Internet or another network, which are fundamentally automated, may or may not require minimal human intervention, and for which a fee is charged.

The following services should be in the scope of the Mexican digital service rules:

• Downloading or accessing images, films, text, information, video, audio, music, games, gambling, and other multimedia content, multiplayer environments, obtaining mobile phone ring tones, viewing online news, traffic information, weather forecasts, and statistics.
• Intermediation between third parties offering goods or services and those seeking them.
• Online clubs and dating sites.
• Distance learning or teaching

Exemption:

• Download or access of electronic books, newspapers, and magazines

Determining the Location of the Mexican Consumer

The recipient of the service should be considered to be in Mexico when any of the following events occur:

• The recipient has declared an address located in Mexico to the service provider
• The recipient of the service makes the payment to the service provider through an intermediary located in Mexico.
• The IP address used by the electronic devices of the recipient of the service corresponds to the range of addresses assigned to Mexico.
• The recipient has provided a telephone number whose country code corresponds to Mexico to service provider

VAT Registration for Foreign Companies

• VAT registration threshold for non-resident suppliers of Digital Services: No registration threshold
• Fiscal representatives: Yes

VAT Returns and payment of taxes

VAT returns for non-residents

Once registered, businesses should need to collect and remit taxes to the Mexican Tax Administration Service (SAT). Note that these are returns for non-resident companies - not to be confused with VAT returns of local companies.

Digital Reporting Requirements for Cross-Border Digital Services

Historically, foreign direct digital service providers faced limited digital reporting requirements compared to domestic entities. However, under the 2026 tax reform (Article 30-B of the Federal Tax Code and Rule 2.9.21 of the Miscellaneous Tax Resolution), Mexico introduced rigorous real-time data access and continuous compliance obligations for all in-scope digital platforms, encompassing both Mexican residents and foreign entities.

1. Real-Time Data Access Mandate

Both domestic and foreign digital service providers, as well as intermediation platforms, must grant the Mexican Tax Administration Service (SAT) permanent, online access to their platform-level transactional records.

Key requirements include:

• Availability: Data must be hosted and available for consultation no later than the day after the transaction occurs.
• Archive: Platforms must maintain a searchable data archive for a period of five years.
• Access Provision: Businesses must provide the SAT with login credentials (username and password) and user manuals to access the system, interface, or application hosting this dataset. A formal written request providing these access details must be submitted to the SAT no later than April 30, 2026.

Scope of Required Data: The data fields required depend on the platform's business model:

• Direct Digital Service Providers (e.g., streaming, downloads): Must provide  transaction details for operations with recipients in Mexico. This includes the type of service, the client's RFC (if an invoice is requested), price excluding VAT, VAT transferred, final price, payment method, and the receipt identifier (or CFDI folio).
• Intermediary Platforms (e.g., marketplaces, ride-sharing, lodging): In addition to the transaction data above, intermediaries must provide a "seller layer" of data regarding the offerors on their platform. This includes the seller's name, RFC/CURP, fiscal domicile, bank account or CLABE for payouts, transaction amounts (ISR, IVA, and IEPS bases), withheld taxes, and specific attributes like property addresses (for lodging) or import flags and customs duties (for goods).

2. Invoicing Obligations

In addition to data access, digital service providers must fulfill specific invoicing requirements based on their operational model and residency:

Foreign Direct Digital Service Providers: If requested by the Mexican recipient, foreign providers may be required to provide a PDF file containing the information required by their local jurisdiction (i.e. if the provider is based in the Netherlands, the invoice must meet Dutch requirements). The invoice should contain, at a minimum:

• Name or company name of the supplier
• City and country in which it is issued
• RFC of the supplier
• Net amount
• VAT amount
• Concept or description of the service
• Issue date and period covered by the invoice
• RFC of the recipient (if appropriate)

Domestic Direct Digital Service Providers: Must issue standard local Mexican e-invoices (CFDI) for their services.

Intermediary Platforms: If an entity is acting as an intermediary in the supply of goods or services between third parties, it must issue a CFDI for Retentions and Payment Information, which incorporates the "Servicios Plataformas Tecnológicas" (Technological Platforms Services) complement. This document serves to explicitly detail the specific amounts of income tax (ISR) and value-added tax (VAT) that the platform has withheld from the underlying sellers or service providers.

For more information about digital reporting requirements in Mexico see E-invoicing and Digital Reporting Guide.

Foreign Intermediaries Withholding VAT

A foreign intermediary (i.e. electronic platform or marketplace) in the supply of goods or services should withhold the following percentages.

• Supplier is resident in Mexico (individual or legal entity) and provides a valid RFC: intermediary should withhold 50% of the VAT
• Supplier is resident in Mexico (individual or legal entity) and does not provide a valid RFC: intermediary should withhold 100% of the VAT
• Supplier is based outside Mexico: intermediary should withhold 100% of the VAT
• Amounts from the transactions are deposited into bank or deposit accounts located abroad: intermediary should withhold 100% of the VAT.

VAT amounts withheld should be remitted to SAT by the 17th of the following month.

Income Withholding Tax

In addition to VAT withholding, a foreign intermediary (i.e. electronic platform or marketplace) in the supply of goods or services should withhold income tax in the following scenarios.

• If the supplier is an individual or a legal entity who provides a valid RFC and is a resident of Mexico:
  • 4.0% for accommodation services
  • 2.1% for land passenger transport services and land freight transport services
  • 2.5% for the sale of goods and services in general
• If the supplier is resident in Mexico and does not provide a valid RFC:
  • 20% regardless of the type of transaction