The Mexican Tax Administration (SAT) has broadened the definition of Digital Intermediation Service for tax law purposes, issued in the Second Resolution of Modifications to the Miscellaneous Fiscal Resolution for 2024 on 11 October 2024.
The Value Added Tax Law regulates the provision of digital services by foreign residents without a physical presence in Mexico, focusing on applying this tax.
The law specifies that only those services defined within this legal framework are recognised as digital services. These services are delivered via applications or digital content over the Internet or other networks, primarily in an automated manner, and may involve minimal human intervention. A fee is required for these services.
The broadened definition now states that digital services are intermediaries between third-party suppliers of goods or services and the consumers seeking those offerings.
SAT asserts that a coherent and purpose-driven interpretation of the tax regulations concerning digital services categorises digital platforms as providers of intermediation services.
This classification applies when platforms, for a fee or compensation, enable or facilitate transactions via their website, application, or other digital networks, allowing users to offer goods or services to third parties. It also applies when platforms sell their own products or directly provide services to consumers through these retail outlets.
Such platforms are required to adhere to the obligations outlined in the VAT law, which includes the responsibility to withhold taxes where applicable.
