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Mexico taxes on digital services and platforms: VAT on foreign providers, platform withholding, 2026 changes and blocking

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Last verified: 2026-10-26 · Status: Changing

Mexico taxes the digital economy through VAT and withholding rather than a separate turnover based digital services tax: foreign providers of downloads, streaming, online clubs and intermediation to recipients in Mexico must register in the RFC within 30 days, charge 16 percent VAT and file monthly. Platforms that intermediate sales withhold VAT and income tax from sellers: for 2026 the income tax withholding on sales of goods and services rose to 2.5 percent, companies selling through platforms are also subject to 2.5 percent withholding, and full VAT withholding applies to sellers abroad or paid into foreign accounts. From 2026 digital providers must give the SAT real time access to tax relevant data, violent video games bear 8 percent excise, and providers that fail to comply can have access to their service blocked in Mexico.

USD conversions use MXN 18.5026 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 16 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Mexican tax law uses the Banxico FIX for foreign currency amounts, which differs slightly. Conversions are for orientation only.

Key facts

Foreign digital service providers must register and charge VAT	Yes; register within 30 days, 16 percent, monthly by the 17th LIVA art. 18-D, as of 2026-10-26 · in force
Deadline for a foreign digital provider to register after first service in Mexico	30 calendar daysLIVA art. 18-D, section I, as of 2026-10-26 · in force
Separate digital services tax on gross revenue	No; digital services are taxed through VAT, platform withholding and excise LIVA arts. 18-B to 18-M, as of 2026-10-26 · in force
VAT withheld by intermediation platforms from individual sellers	50 % of VATLIVA art. 18-J, section II, as of 2026-10-26 · in force
Income tax withheld by platforms on sales of goods and services (2026)	2.5 %LIF 2026 art. 25, section VI, as of 2026-10-26 · in force
Income tax withheld from companies selling via platforms that do not provide their RFC (2026)	20 %LIF 2026 art. 25, section VI, as of 2026-10-26 · in force
Excise tax on violent, extreme or adult video games (from 2026)	8 %LIEPS art. 2o., section II, paragraph D), as of 2026-10-26 · in force
Excise tax on telecommunications network services	3 %LIEPS art. 2o., section II, paragraph C), as of 2026-10-26 · in force

The rule

1. Which digital services are covered and when the customer is in Mexico. The regime covers services provided through applications or digital content over the internet or another network, fundamentally automated with minimal or no human intervention, for a fee: downloading or accessing images, films, text, information, video, audio, music, games (including gambling), multiplayer environments and similar content (excluding e books, newspapers and magazines); intermediation between third party sellers and buyers; online clubs and dating sites; and distance learning or tests. A recipient is in Mexico if they gave a Mexican address, paid through a Mexican intermediary, use an IP address assigned to Mexico or gave a phone number with Mexico's country code.
Cost to do it: 16 percent VAT on the price charged to Mexican recipients.
Example: A foreign streaming service has customers who pay with Mexican cards and use Mexican IP addresses; its subscriptions to them are digital services used in Mexico. / A USD 10 monthly subscription bears USD 1.60 of Mexican VAT.Ley del Impuesto al Valor Agregado (LIVA), DOF 29 December 1978 (Chamber of Deputies consolidated text, last reform DOF 12 November 2021), Arts. 18-B and 18-C, 1978-12-29 official text · verified 2026-10-26

2. Obligations of foreign providers. Residents abroad without an establishment in Mexico that provide these digital services to recipients in Mexico must: register in the RFC within 30 calendar days of first providing the service (the SAT publishes the list of registered providers); offer and charge VAT expressly and separately with the price; report monthly, by the 17th of the following month, the number of services and recipients by type and price; calculate and pay VAT at 16 percent on amounts actually collected each month by the 17th of the following month; issue electronic receipts to recipients when they request them; appoint a legal representative and give a Mexican address for notices when registering; and obtain an advanced electronic signature (e.firma). Complying with these duties does not by itself create a permanent establishment in Mexico (art. 18-E).
Cost to do it: 16 percent VAT collected from customers; compliance through a local adviser.
Example: A foreign SaaS company collects MXN 2,000,000 from Mexican customers in March. It must have charged MXN 320,000 of VAT and pay it to the SAT by 17 April, together with the monthly information return. / Collections of about USD 108,093; VAT of about USD 17,295 at 18.5026.Ley del Impuesto al Valor Agregado (LIVA), DOF 29 December 1978 (Chamber of Deputies consolidated text, last reform DOF 12 November 2021), Arts. 18-D and 18-E, 1978-12-29 official text · verified 2026-10-26

3. Blocking for non compliance and real time access. If a foreign provider fails to register, to appoint a legal representative or to obtain an e.firma, or fails for three consecutive months to pay the VAT, remit withholdings or file the payment or information returns, the SAT can order temporary blocking of access to its digital service through Mexican telecom network concessionaires until it complies. Since 1 January 2026, providers of digital services under LIVA arts. 1o.-A BIS and 18-B must give the tax authorities permanent online real time access to the information in their systems needed to verify tax compliance, on terms set by SAT rules; failing to do so can also lead to blocking.
Cost to do it: Loss of access to the Mexican market until compliance.
Example: A foreign gaming app that never registered with the SAT can be blocked by Mexican internet providers on the SAT's order until it registers and pays. / Blocking can cut off all Mexican revenue, for example USD 50,000 a month, until the provider complies.Ley del Impuesto al Valor Agregado (LIVA), DOF 29 December 1978 (Chamber of Deputies consolidated text, last reform DOF 12 November 2021), Arts. 18-H BIS to 18-H QUINTUS; CFF art. 30-B, 1978-12-29 official text · verified 2026-10-26 · changed: CFF art. 30-B, added by the decree published in the DOF on 7 November 2025 (in force 1 January 2026), requires digital service providers to give the SAT permanent online real time access to tax relevant information.

4. VAT withholding by intermediation platforms. Platforms, Mexican or foreign, that intermediate sales and collect the price on behalf of sellers must publish prices with VAT shown separately (or marked VAT included), withhold 50 percent of the VAT collected from individual sellers (100 percent if the seller does not provide its RFC) and 100 percent from foreign sellers of digital services, pay it over and give sellers a CFDI of withholdings, and report sellers' information monthly. For 2026 the Federal Revenue Law adds that these platforms must also withhold VAT from companies that sell goods, provide services or lease goods through them under the same 50 percent rule, and must withhold 100 percent of the VAT collected when the seller is a foreign resident without an establishment selling goods in Mexico, or when the seller deposits the proceeds in bank accounts abroad.
Cost to do it: The withholding is credited by the seller against its VAT; the platform bears compliance and is liable for amounts not withheld.
Example: A marketplace collects MXN 116,000 (price plus VAT) for a Mexican company seller's product. It withholds MXN 8,000 (50 percent of the MXN 16,000 VAT) for 2026; if the seller were paid into a foreign bank account, it would withhold all MXN 16,000. / Sale of about USD 6,269; VAT withheld of about USD 432, or USD 865 in the foreign account case, at 18.5026.Ley del Impuesto al Valor Agregado (LIVA), DOF 29 December 1978 (Chamber of Deputies consolidated text, last reform DOF 12 November 2021), Arts. 1o.-A BIS and 18-J; LIF 2026 art. 25, section IX, 1978-12-29 official text · verified 2026-10-26 · changed: The Federal Revenue Law for 2026 (DOF 7 November 2025) extended platform VAT withholding to companies selling through platforms and required 100 percent withholding for foreign sellers of goods and for sellers paid into accounts abroad, for 2026.

5. Income tax withholding by platforms. Platforms withhold income tax from individuals who sell or provide services through them, on gross income excluding VAT, as an advance payment: 2.1 percent for ground passenger transport and delivery, 4 percent for lodging, and, for sales of goods and other services, 1 percent under the income tax law, replaced by 2.5 percent for 2026. For 2026, companies selling goods or services through platforms are also subject to 2.5 percent withholding on their gross income, creditable against their advance payments and annual tax, rising to 20 percent if they do not give the platform their RFC.
Cost to do it: 2.5 percent of gross platform sales withheld in 2026 for goods and general services, creditable against income tax.
Example: A Mexican company sells MXN 1,000,000 of goods through a marketplace in a month. The platform withholds MXN 25,000 of income tax (MXN 200,000 if the company did not provide its RFC). / Sales of about USD 54,046; withholding of about USD 1,351, or USD 10,809 without RFC, at 18.5026.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Art. 113-A; LIF 2026 art. 25, section VI, 2013-12-11 official text · verified 2026-10-26 · changed: The Federal Revenue Law for 2026 (DOF 7 November 2025) set a 2.5 percent platform withholding rate for 2026 in place of the 1 percent in LISR art. 113-A, section III, and applied withholding to companies selling through platforms, with 20 percent if they do not provide their RFC.

6. Excise tax on certain digital services. Excise tax (IEPS) applies at 3 percent to services provided in Mexico through public telecommunications networks (subject to exceptions in the law); at 50 percent to betting and gaming, including online gambling by foreign providers through the internet, who must register and comply through the digital services rules; and, from 2026, at 8 percent to access or downloads of video games with violent, extreme or adult content not suitable for minors under 18, provided by foreign or Mexican digital providers directly or through platforms, including in game content of free games. When a subscription covers a catalog that includes such games without separating prices, 70 percent of the fee is treated as attributable to them.
Cost to do it: 3, 8 or 50 percent of the taxable value depending on the service, in addition to VAT.
Example: A foreign game store sells MXN 500,000 of adult rated games to Mexican users in a month. It owes MXN 40,000 of IEPS at 8 percent plus VAT. / Sales of about USD 27,023; IEPS of about USD 2,162 at 18.5026.Ley del Impuesto Especial sobre Producción y Servicios (LIEPS), DOF 30 December 1980 (Chamber of Deputies consolidated text, last reform DOF 7 November 2025), Art. 2o., section II, paragraphs B), C) and D), 1980-12-30 official text · verified 2026-10-26 · changed: Decree published in the DOF on 7 November 2025 (in force 1 January 2026) added the 8 percent IEPS on violent, extreme or adult video games and reformed the betting and gaming rules, now at 50 percent in the consolidated text.

Seller through the platform	VAT withheld	Income tax withheld
Individual, ground transport or delivery	50 percent of VAT (100 percent without RFC)	2.1 percent
Individual, lodging	50 percent of VAT (100 percent without RFC)	4 percent
Individual, goods and other services	50 percent of VAT (100 percent without RFC)	2.5 percent in 2026
Mexican company	50 percent of VAT in 2026	2.5 percent in 2026 (20 percent without RFC)
Foreign seller of goods without an establishment	100 percent of VAT in 2026	Not covered by these rules
Any seller paid into an account abroad	100 percent of VAT in 2026	Per seller type

Platform withholding in Mexico for 2026, verified 26 October 2026

Worked example

A US software company sells subscriptions to Mexican consumers and small businesses worth MXN 3,000,000 a month (about USD 162,139), with no office or staff in Mexico.
It registers in the RFC within 30 days of its first Mexican sale, adds 16 percent VAT (MXN 480,000) to its prices, files the monthly information return and pays the VAT by the 17th of the following month.
It owes no Mexican income tax on these sales without a permanent establishment, and must give the SAT the real time data access required since 2026. If it stopped filing for three consecutive months, the SAT could order its service blocked in Mexico.

Step by step

1. Determine whether the service is a covered digital service and whether customers are located in Mexico under the four tests in LIVA art. 18-C.
2. Register in the RFC within 30 calendar days of the first Mexican sale and appoint the representative and e.firma required by SAT rules.
3. Configure checkout to show 16 percent VAT separately and, for adult rated games, the 8 percent IEPS.
4. File monthly information and payment returns by the 17th.
5. If operating a marketplace, set up 2026 withholding for individuals, companies, foreign sellers and sellers paid abroad, and issue withholding CFDI.
6. Prepare to provide the SAT real time access to tax data under CFF art. 30-B and the SAT's rules.

Common traps

Assuming no Mexican tax without a presence. Foreign digital providers owe VAT on Mexican customers and must register within 30 days (LIVA art. 18-D).
Using 2025 withholding rates. For 2026 platforms withhold 2.5 percent income tax on goods and services and also withhold from companies (LIF 2026 art. 25).
Paying sellers into foreign accounts. Platforms must withhold all the VAT in that case for 2026 (LIF 2026 art. 25, section IX).
Missing three months of filings. That can trigger blocking of the service in Mexico (LIVA art. 18-H BIS).
Bundled game subscriptions. Without separate prices, 70 percent of the fee is treated as subject to the 8 percent IEPS (LIEPS art. 2o.).

Sources

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