Mexico: New requirements for registering foreign digital service providers
Two new requirements for registering foreign digital services providers in Mexico
The tax administration (SAT) began requesting two new requirements for registering foreign digital services providers in Mexico:
- Corporate purpose in bylaws: The deeds of incorporation or bylaws of the foreign digital service provider must state that the corporate purpose of the entity is to provide technological platform services through which goods are sold or leased, or services are provided. The SAT requires that this corporate purpose must be clearly detailed, and it should be stated that the service is provided through a “technological platform.”
- Affidavit: A statement signed off by the legal representative, detailing the following:
- The goods or services that will be sold through the technological platform
- The website on which the transactions are made
- The full address of the core business administration of the foreign digital service provider
KPMG observation
These new requirements, particularly the corporate purpose in bylaws, add complexity to the registration process, making it more challenging for foreign digital services providers to comply; however, these measures are part of a border effort to increase transparency and make certain that all foreign digital service providers in Mexico are properly identified.
The SAT is becoming increasingly demanding with the documentation and formalities required to register foreign digital service providers in Mexico, now even requesting modifications to the corporate purpose in the bylaws of foreign companies that may have been incorporated many years ago or in other cases these changes could have impacts, restrictions, and internal legal approvals to do so.
For those companies already registered for VAT on digital services in Mexico, there is no need to amend the bylaws. However, for those foreign residents that will register for the first time, it is important to review in detail all the formalities including the deeds of incorporation and evaluate the alternatives to comply with all registration requirements in Mexico.
For more information, contact a KPMG tax professional in Mexico:
Antonio Zuazua | Mexico and LatAm Indirect Tax Leader | +52 811-999-2523| azuazua@kpmg.com.mx