Mexico: New VAT withholding requirement for platforms facilitating the sales of goods for nonresidents

The Mexican tax administration (SAT) on October 11, 2024, introduced the “Second Resolution of Modifications to the Miscellaneous Fiscal Resolution for 2024,” which requires digital platforms that act as intermediaries between third parties, both nonresidents without an establishment in Mexico and those residing in the country, to withhold 100% of the value added tax (VAT) corresponding to the sales of goods in which they act as intermediaries. This applies when they collect the corresponding considerations and VAT on behalf of the sellers of goods and deposit these in bank or deposit accounts located abroad.

For this purpose, these platforms must:

• Obtain from the seller a statement including details on their foreign bank account and their willingness to have the VAT withheld from the sales they make through the digital platform. Such statement can be obtained either through their website, application, platform, or any other similar means, or in writing.
• Pay the withheld amount through the “Declaration of payment of VAT withholdings for the use of technological platforms,” no later than the 17th of the month immediately following the one in which the considerations corresponding to the sale of goods and the respective VAT have been collected.
• Issue to the seller a CFDI (digital tax receipt) of withholdings and payment information, within five days following the month in which the withholding was made. This CFDI must include the amount of the payment and the withheld tax, and it must incorporate the “Services Technological Platforms” supplement, which the SAT will publish on its website.
• Provide the SAT with the information referred to in article 18-J, fraction III of the VAT Law, regarding the sales referred to in this rule, identifying that these are operations for which the VAT withholding was made.

The VAT withheld and paid in terms of this rule can be deducted by the seller, from the tax corresponding to the total of their activities of the month in which such tax was withheld.

KPMG observation

Although the rule is very general and does not clarify whether they are goods located in Mexico or abroad at the time of sale, in principle it would seem that this rule is aimed at foreign sellers (it does not matter if they are individuals or legal entities) who sell through intermediation platforms and that they are deposited in foreign bank accounts. Moreover, it is currently unclear whether the requirement applies only if the nonresident seller approves of the VAT withholding through the statement mentioned above and whether this withholding relieves the seller from their VAT obligations in Mexico.

Finally, the new rules will force digital platforms to issue CFDIs for the transactions at issue even though nonresident platforms so far did not have such an obligation when facilitating the sale of digital services for nonresidents.

For more information, contact a KPMG tax professional:

Antonio Zuazua | azuazua@kpmg.com.mx

Philippe Stephanny | philippestephanny@kpmg.com