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Mexico Raises Import Tax to 33.5% on Low-Value Goods | Impact on E-Commerce, Shein, Temu & Global Sellers
On 31 July 2025, the Mexican government announced a significant change to its import tax regime, which is set to take effect from 15 August 2025.
Under the new rules, all imported goods valued below USD 2,500 will be subject to a 33.5% import duty, up from the previous rate of 19%.
This increase of 14.5 percentage points is particularly aimed at countries with which Mexico does not hold a free trade agreement, with Chinese products being a key target under the new measures.
This policy change is likely to significantly reshape the ecommerce landscape, especially for platforms like Shein and Temu, which have built their business models around low-cost, direct-to-consumer imports.
Under the new rules, a parcel worth USD 500 which would have previously attracted USD 95 in import duty, will now be taxed at USD 167.50 instead – a 76% increase in tax burden. This change is likely to result in either higher consumer prices or thinner profit margins for sellers, with the cost absorbed somewhere along the supply chain.
While this measure is primarily aimed at regulating trade imbalances and protecting domestic industry, it also reflects Mexico’s broader efforts to revamp its tax regime, particularly for foreign digital and e-commerce businesses.
Mexican VAT registration for non-resident businesses
Since June 2020, non-resident businesses providing digital services to Mexican consumers—such as streaming platforms, online marketplaces, and software providers—have been required to register for VAT in Mexico, charge 16% VAT on their sales, and remit it to the Mexican Tax Authority (Servicio de Administración Tributaria, or SAT).
This VAT registration obligation applies even if the company has no physical presence in Mexico. In order to register for VAT and to comply with ongoing obligations once registered, non-resident businesses must appoint a local fiscal representative based in Mexico.
For non-resident businesses selling physical goods, VAT registration has been highly incentivised, with platforms such as Amazon.mx requiring sellers to register for VAT, even if they opt not to store inventory in any local warehouses.
The new import duty for low-value goods can be seen as a complementary policy. It closes a tax loophole where non-resident businesses could previously import inexpensive goods with relatively low fees.
As e-commerce has grown rapidly, this loophole has become increasingly costly for national governments, prompting action.
A global shift?
Mexico is not alone in tightening its rules on low-value imports. Similar changes have been proposed across other major jurisdictions in recent years.
In the European Union, the VAT exemption for low-value goods (valued under €22) was abolished on 1 July 2021. Now, all commercial goods imported into the EU are subject to VAT, regardless of value.
Additionally, a flat-rate handling fee of €2 has also been proposed for low-cost goods. The flat-rate charge is intended to have two impacts – to prevent largescale ‘dumping’ of cheap goods onto the European market, and to finance enhanced customs measures for imports. The EU proposals include a lower €0.50 fee for products that are already stored within the bloc before being shipped to end-consumers. However, the flat-rate fee is expected to be levied on major online marketplaces rather than directly on consumers.
Similarly, the United Kingdom also announced a review into the impact of low-cost imports and the current duty-free threshold of £135, which many British retailers claim provides an unfair ‘loophole’ for international retailers relying on low-cost, high-volume sales models. The British government has launched a consultation which is expected to return results later this year.
Future compliance
Mexico’s decision to raise import duties on low-value goods follows a major global policy shift.
The ramifications are clear – many governments are no longer willing to allow overseas sellers—especially those operating at scale on digital marketplaces—to avoid undercutting domestic competition by importing large volumes of low-cost goods.
This shift means it’s more important than ever for businesses to stay on top of their compliance obligations to ensure minimal disruption. For more information on how we can help you, get in touch with us for a free one-to-one consultation.
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