Tax Retentions to Digital Platforms

June 10, 2020

As previously mentioned, as of June 1, the corresponding collection of income over 5 thousand pesos generated through digital platforms will begin to be made within the following items,

  • Hosting
    Example: Airbnb, Vrbo and alike
  • Alienation of goods or provision of services
    Example: Amazon, Mercadolibre, Upwork, Aliada, and alike.
  • Ground transportation or delivery of goods
    Example: Uber, Uber Eats, Rappi, and alike

With this reform, digital platforms will not be exempt from tax payments related to the income generated by the services performed by the service provider .
Therefore, it seems appropriate to review for you ‘ the fine print ‘ of said reform,

The tax treatment of withholdings is declared through specific legislation independent of the regime where natural persons are taxed, through

  • 12 Monthly Declarations, and
  • 1 Annual Declaration

For analysis, we separate it by tax:

VAT

The VAT withholding will be for 50% of the transferred tax (that is, 8% of the Value Added Tax) regardless of the amount of the operation. However, when the natural person does not provide RFC, the withholding must be made at 100% of the transferred tax.

In case the monthly withholdings, provisional payments, wish to be taken as definitive, it is necessary to consult the restrictions that this requires, among some:

  • The nature of the ventures of the taxpayer’s income perception
  • The maximum amount of income captured by these activities, 300 thousand pesos per year.
  • The ability to deduct expenses on an annual return is lost.

Income Tax (ISR)

La tasa de retención aplica sobre el ingreso mensual (sin considerar al IVA como parte del ingreso) en apego a los tabuladores descritos en el artículo 113-A de la Ley del ISR, sin embargo, sino se proporciona el RFC, la retención será del 20%.

Withholding rate by item and amount of income

Monthly Income AmountRetention rate
Up to $ 5,5002%
Up to $ 15,5003%
Up to $21,0004%
More than $21,0008%
Transporte terrestre de pasajeros y entrega de bienes
Monthly Income AmountRetention rate
Up to $5,0002%
Up to $15,0003%
Up to $35,0005%
More than $35,00010%
Servicios de Hospedaje
Monthly Income AmountRetention rate
Up to $1,5000.4%
Up to $5,0000.5%
Up to $10,0000.9%
Up to $25,0001.1%
Up to $100,0002.0%
More than $100,0005.4%
Servicios de Enajenación de bienes y prestación de servicios.

In the same way that in the VAT it will be possible to take these monthly withholdings of the ISR as final payments under a series of requirements established in Article 113-B of the ISR Law among which they appear again,

  • The nature of the ventures of the taxpayer’s income perception
  • The maximum amount of income captured by these activities, 300 thousand pesos per year.
  • The ability to deduct expenses on an annual return is lost.

Remember, you must present the notice (the processing sheet 71 / CFF) when you stop using the technology platform.

In resum

Dear taxpayer, if you carry out work in Gig format or service provider through digital platforms, we invite you to approach your trusted accountant to find out about the details of this reform that has entered into force and that will impact to a greater or lesser extent its previous accounting activity.

At DECXA we provide quality accounting services and we remain at your service to support you in any questions that these changes cause you.

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