Mexico City, April 15th, 2021.

Yesterday, a reform bill that modifies the Excise Tax Law was published at the Parliamentary Gazette of the Mexican Congress, to include media content services provided by foreign digital platforms, as object of the Excise Tax.

Foreign companies providing over the top content services (“OTT”) to customers located in Mexico will be required to pay the 7% Excise Tax, including platforms that do not have a domicile located in Mexico, where the applicable rate will be 15%.

This proposal only contemplates digital media audiovisual services, setting forth that 40% of the funds collected will be destined to telecommunications social coverage programs in indigenous communities.

The objective of the reform is to increase the public revenue as consequence of the increase of the digital economy, notwithstanding that as of 2020, foreign digital platforms are subject to the Value Added Tax in Mexico.

We consider relevant to highlight that, as part of the reform, it is established that billing providers that provide such services to foreign digital platforms will be required to withhold and pay the Excise Tax caused by the provision of digital services, taxed at the rate of 7% or 15%.

Finally, the terms and scope of the Excise Tax proposed modifications are unclear and, in many scenarios, could be complicated to implement considering the complexity of the distribution and production chain of digital services.


The firm’s lawyers are available to assist you with any questions arising from this informative note, as well as its eventual modification of the terms set forth, as part of the legislative process before the Mexican Congress.


S I N C E R E L Y,


Gerardo Nieto


Gil Zenteno


Alejandro Barrera


Sergio Barajas


Victor Barajas


Francisco J. Matus