Standard VAT rate: 16%
Real-time reporting: mandatory
Digital service tax: no
Mexican VAT number contains 3 digits, 6 numbers and 3 digits. (i.e. ABC123456A12)
The standard VAT rate in Mexico is 16%, with some services that are exempt from Mexican VAT, such as existential foodstuffs.
16% (Standard) – applies to all taxable supplies, with certain exceptions
0% (Reduced) – existential foodstuffs such as milk, bread, wheat, meat, corn and other agricultural services.
All businesses with Mexican VAT number must submit periodic VAT reports and payments.
VAT Returns frequency
For all companies that operate in Mexico, VAT returns must be submitted on a monthly basis, by the 17th of the month following the period end.
In case of the late filing of VAT returns and payments, the Mexican government prescribed the penalties as follows:
Due to the electronic invoicing system, all electronic invoices (Comprobante Fiscal Digitales por Internet – CFDI) must contain at least the following:
From 2014, Mexican Tax Authority (Servicio de Administración Tributaria, or SAT) introduced mandatory electronic invoicing for all companies generating more than 250,000 MXN per annum.
Electronic invoices (Comprobante Fiscal Digitales por Internet – CFDI), are digital versions of paper invoices that are encrypted. Every electronic invoice must have a digital signature (Sellos Digitales Certificados) which verifies the origin and authenticity of the invoice and must be stored on central database hosted by the local tax authority or government-approved vendor.
Real-time reporting to Mexican Tax Authorities (Servicio de Administración Tributaria – SAT) is mandatory for all taxable persons in Mexico.
How does it work?
Who is affected by this obligation?
All entities (Moral or Fisica) who have an income from their economic activity are required to issue an electronic invoice.