- The 2026 Economic Package proposed by Mexico’s Federal Executive Branch requires digital platforms to withhold VAT and income tax from Mexican legal entities. For sellers with a Mexican tax ID, platforms must withhold 50% VAT and 4% income tax, while for those without an ID, 100% VAT and 20% income tax must be withheld. Platforms must also withhold 100% VAT in certain cases, such as sales by nonresidents with goods in Mexico and payments to foreign bank accounts. Foreign digital service providers must obtain a Mexican tax ID and comply with tax regulations. An 8% excise tax is proposed on sales of video games with violent or adult content, applicable to B2C transactions in Mexico, in addition to the standard 16% VAT. Imports are excluded from this rule.
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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