The Mexican Tax Administration Service (Servicio de Administración Tributaria, SAT) has recently unveiled new regulations to tackle tax avoidance strategies. Among these updates, the SAT will implement new marketplace facilitation rules, aligning Mexico’s Value-Added Tax (VAT) framework more closely with several European systems. Before delving into the details of these new regulations, let’s first look at how VAT operates in Mexico.

An Overview of VAT in Mexico

In Mexico, VAT is referred to as Impuesto al Valor Agregado (IVA). The standard VAT rate is set at 16%, although some goods and services, such as food, water, books, and magazines, are exempt from VAT.

When Must You Register for VAT in Mexico?

According to the Régimen residentes en el Extranjero sin Establecimiento Permanente en México (Regime for Residents Abroad Without Permanent Establishment in Mexico), any foreign business intending to utilise warehousing services in Mexico (such as Amazon FBA) is required to register for VAT. If your business is not physically established in Mexico, you must appoint a local representative to handle registration, as non-resident businesses are not permitted to apply directly.

What Happens After VAT Registration?

Once your application has been approved, you will be issued a Registro Federal de Contribuyentes (RFC) number, comprising 12 or 13 characters, along with a corresponding certificate. From the moment this RFC number and certificate are issued, you will be obliged to submit VAT returns.

VAT returns are filed monthly, with both the submission and payment due on the same date—the 17th of the month following the relevant reporting period (e.g., returns and payments for October must be completed by 17th November). Payments can be made directly to the SAT via authorised banks and platforms, or through your appointed local representative. Failure to adhere to these filing and payment obligations may result in financial penalties or the suspension of trading activities.

Importing Goods into Mexico

To import goods into Mexico, you will need to appoint an Importer of Record. An RFC number is required before proceeding with this.

What Are the New Marketplace Facilitation Rules?

Marketplace facilitation refers to the process where third-party platforms collect and remit taxes directly to the authorities on behalf of sellers, rather than leaving the seller responsible for declaring and paying the tax.

These new rules predominantly target major e-commerce platforms, such as Amazon, which must also obtain their own RFC numbers to continue operating within the country. The rate of tax withheld varies according to local legislation, and in Mexico, it may be as high as 100%, depending on the platform.

Several platforms have already outlined how they plan to comply with these changes. Here are a few examples:

Amazon in Mexico

Sellers may continue selling on Amazon.com.mx without providing a valid RFC number. However, sellers using Amazon FBA in Mexico must upload a valid RFC number to access this service. In response to the new regulations, Amazon will begin withholding tax on behalf of sellers. The rate withheld will vary based on whether or not the seller provides an RFC number:

• Without RFC: 20% income tax + 16% VAT
• With RFC: 16% VAT

Temu in Mexico

Sellers must provide a valid RFC number in order to sell on Temu. The platform will verify the registration against their stock shipments, and if verification fails, the inventory will be invalidated and not shipped. Temu will re-verify the RFC registration on a monthly basis.

SHEIN in Mexico

Sellers who fail to provide a valid RFC number will have taxes withheld and paid on their behalf. The exact tax withholding amount is still pending confirmation. If an RFC number is provided, SHEIN will not withhold taxes, and the seller will be responsible for remitting tax directly to the SAT as part of their VAT filing.

Do I Still Need to File VAT Returns if My Platform Handles VAT?

Yes, even if your selling platform collects and remits VAT on your behalf, you are still required to file a monthly VAT return to maintain your registration and stay compliant with Mexican tax regulations.

For more information on VAT in Mexico, get in touch with us at info@tbaglobal.com for a free one-to-one consultation.