What foreign companies must register to obtain a Tax ID Number?
What kind of digital services are considered imported and must pay VAT?
As of June 1, 2020, with the introduction of tax regulations for digital services, foreign companies without permanent establishment in Mexico that provide digital services to recipients located in the country must register and obtain a Tax ID Number (RFC) and comply with several formalities.
The Value Added Tax Law establishes that the tax authority has an obligation to disclose, both on its website and on the Official Gazette (DOF), the list of foreign residents that obtained an RFC. Also, through miscellaneous tax regulations, it was determined that said list should be published bimonthly during the first 10 days of January, March, May, July, September and November of each year.
The foregoing is relevant for those recipients of digital services located in Mexico, since in the event that a foreign service provider is not registered in the RFC, the recipient must consider said services as imported and pay VAT directly on the terms provided in the Value Added Tax Law.
In this sense, on July 9, 2020, the following list was published in the DOF:
The personal in the Practice of Tax & Legal of KPMG in Mexico is at your service in order to analyze in a detailed manner the effects that could arise to individuals from the application of the provisions above described.