With this new scheme, the two main taxes that are charged to digital platform companies are VAT and ISR.
Members of the Senate of the Republic will carry out a review of the application of taxes to digital platforms that were established since June 1 of this year, said Senator for Morena Alejandro Armenta Mier.
The also president of the Finance and Public Credit Commission of the Upper House pointed out that the “abusive transfer of Income Tax” to final consumers has been detected in these digital platforms of international companies.
“Last year we approved the 2020 Income Law, 10 reservations were made, one of the reservations had to do with the tax range for digital platform companies, this year we will review this issue again.”
With this new scheme, the two main taxes that are charged to digital platform companies are Value Added Tax (VAT) and Income Tax (ISR) focused on streaming platforms such as Netflix; and the intermediation platforms between third parties that offer goods or services to their claimants, in which case companies such as Uber and Amazon enter.
It also integrates online clubs and dating sites and distance learning sites.
Once the application of these taxes to digital platforms began, users of the services expressed their annoyance through social networks for the transfer of taxes to the final cost in the acquisition of goods and services.
“Digital service providers have to file a special statement. As these platforms are foreign then they were not subject to these declarations and neither do they issue tax receipts with the specific requirements established by Mexican laws, so all this really becomes complicated to start the process, ”explained lawyer Ibarra Barajas, an expert in Fiscal issues.
The expert explained that the common is that VAT is transferred to the final cost of a service or product, although this does not happen in the case of ISR.
“As far as ISR is more complex, the tax is paid by the person who receives the income and here is two ways: some digital platforms are intermediaries between service providers, in the cases of Cabify or Uber or those of Airbnb, the digital platform is an intermediary that connects the consumer of the service with which it provides the service and until before July 1, all they did was charge a commission, “he explained.
However, from the entry into force of this tax to these platforms, they will have to withhold income tax to the person who receives the income for the provision of these services and must subsequently inform the treasury.