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The price increase of platforms like Netflix is ​​not related to a new tax: SAT

May 15, 2020

According to the tax administration service, the payment obligation already existed.

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The price increase of platforms like Netflix is ​​not related to a new tax: SAT
The price increase of platforms like Netflix is ​​not related to a new tax: SAT

The Tax Administration Service (SAT) He clarified that the price increase on platforms like Netflix is ​​not related to a new tax because the obligation to pay VAT (VAT) already existed.

According to a statement by the SAT, only the obligation to pay this tax on foreign digital services used in Mexico should be regulated.

He also explained that this tax had already been caused, so that his payment obligation already existed in the VAT law (Art. 24 para. V LIVA). In this way, the SAT emphasized: “The possibility that digital services increase in price is not related to a new tribute“”

This means that the price increase is not related to the creation of a new tax, but to the legal application of an existing tax. Indeed, Arturo Herrera Gutiérrez, owner of the Ministry of Finance and Public Lending (SHCP)explained the goal of these tax measures on his Twitter account, which is to meet users’ payment of these existing taxes.

It is important to note that platforms like Over, Cabify, Beat, Without apron, Rappi and Uber eats participated in the pilot withholding tax scheme that was applied in May 2019, according to Herrera Gutierrez.

Conclusion: There will be a price increase, but NOT for a new tribute.

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