According to the announcement released by the Mexican government, from January 1, 2025, a 16% value-added tax (VAT) will be imposed on foreign e-commerce platforms, including Amazon. As part of the 2025 Income Tax Law, this policy applies to all companies that sell goods and services in Mexico through foreign e-commerce platforms. E-commerce platforms will be responsible for withholding and remitting the tax to the Mexican Tax Service (SAT). Foreign sellers need to register with the Federal Taxpayer Registry (RFC) of Mexico to obtain a tax number and declare and pay VAT in accordance with the new tax regulations.
- Policy background and purpose
The Mexican National Tax Service announced that from January 1, 2025, a 16% value-added tax (VAT) will be imposed on all foreign companies that sell products through e-commerce platforms. The main purpose of this policy is to increase the tax revenue of the Mexican government and strengthen tax supervision of foreign e-commerce platforms. - Policy details and key changes
Tax objects and tax rates
: The tax objects are all cross-border sellers who sell products through overseas e-commerce platforms. Whether they are from local Mexican companies or not, as long as the goods are stored in Mexico, they must pay a 16% VAT.
Cancellation of tax exemption benefits
: Previously, for goods with a purchase amount of less than US$50 each time, VAT exemption was enjoyed. However, from January 1, 2025, this policy will be cancelled, and all goods sold on e-commerce platforms will be subject to VAT.
III. Impact on Chinese cross-border e-commerce sellers
Profit pressure
: The 16% VAT will increase the pressure on the sales price advantage of Chinese cross-border e-commerce sellers. In particular, sellers who use small profits but quick turnover as their main marketing means may face the dilemma of reduced competitiveness and narrowing profit margins.
Tax compliance requirements
: The Mexican government requires all e-commerce sellers to register with the Federal Taxpayer Registry (RFC) locally and withhold and pay VAT in accordance with regulations. If the seller fails to complete the registration, he may face platform restrictions and delisting, and his sales rights will be suspended.
IV. Response strategies
Register for RFC tax number
: Before entering the Mexican market, sellers must complete RFC registration, which is the first step in tax compliance.
Withholding VAT
: After registering for the RFC tax number, sellers need to pay VAT at 16% and declare it on time to avoid tax compliance risks.
Professional Compliance Support
: Seek professional cross-border tax compliance support, from RFC registration to VAT filing, to ensure smooth business operations.
Registration Process
Prepare Necessary Documents
Proof of Incorporation (or Business Registration Certificate)
Board Resolution or Power of Attorney, proving the authority to apply for a tax number on behalf of the company
Articles of Association
Identification document, such as the ID of the company’s legal representative
Proof of Company Address
Choose a Registration Method
Online Application
: Visit the Mexican Tax Service (SAT) official website at https://www.sat.gob.mx/, find the “Online Services” section, and select the “RFC Registration” option. You will need to create an account, fill in your company details, upload the necessary supporting documents, and verify your identity. Then, follow the system prompts to complete the application for an RFC number.
In Person at the Tax Office
: Bring all the necessary documents to the nearest SAT office for on-site registration.
Through a Third-Party Service Provider
: Entrust a professional, such as an accountant or lawyer, to complete the registration procedures on your behalf.
Register for Electronic Signature and e.firma
Registering for an electronic signature is a must for conducting electronic transactions and communicating with the SAT. You can obtain it through the SAT’s electronic service platform.
e.firma is a digital certificate used for electronic document signing. You need to go to the SAT office or an authorized third-party agency in person to register.
Register for CIF
The CIF (Clave de Identificación Fiscal) is a personal identification number used to access SAT services online. After registering for CIF, you can perform tax declarations and other related operations through SAT’s online platform.
Complete tax registration
After completing the above steps, you need to register for tax with SAT, including filling out the necessary forms and submitting relevant documents.
Login process
Visit SAT official website
Open the official website of the Mexican Tax Agency (SAT).
https://www.sat.gob.mx/
Log in to your account
Log in to your SAT account using the RFC number and CIF you registered previously, as well as the password or electronic signature you set.
Perform tax operations
After logging in, you can perform tax declarations, query tax information, update tax information, etc.
Notes
During the registration and login process, please ensure that all the information you provide is accurate to avoid subsequent tax compliance issues.
If you encounter any problems or difficulties, you can contact SAT’s customer service department or seek professional tax consulting help.
Please pay attention to the latest tax policies and regulatory changes released by SAT regularly to ensure that your tax operations always comply with Mexico’s tax regulations.
V. Market Opportunities and Challenges
Opportunities
: Mexico is the core of the Latin American market. With the increase in e-commerce share and the expansion of market size, cross-border e-commerce sellers cannot ignore this important market. Mexico’s tax policy adjustments have prompted sellers to speed up their layout to avoid missing future market opportunities.
Challenges
: Mexico’s tax policies are complex and strictly enforced, requiring sellers to quickly adapt to market changes, optimize tax compliance, and enhance competitiveness.