MEXICO Law and Practice Contributed by: Ricardo García Giorgana, Carlos Chavez Alanis and Xavier Careaga Franco, Galicia Abogados
1.3 Taxation of Digital Advertising Mexican tax residents are subject to CIT at a 30% rate on income derived from the provision of services, such as digital advertising. Addition - ally, they are subject to VAT at the general rate of 16%. Additionally, digital advertising services may trig - ger withholding taxes if the revenue is deemed to have a Mexican source. However, it is important to conduct a case-by-case analysis to determine whether a double taxation treaty (DTT) to which Mexico is a party may apply. To ensure compli - ance with Mexican tax laws, companies should: • register with the MTA – non-resident provid - ers must comply with the VAT regime for digital services under the MVATL if applicable, which includes timely registration, monthly VAT reporting and payment; • maintain accurate records – keep detailed records of Mexican transactions and ensure proper documentation for tax compliance; • issue compliant electronic invoices – adhering to CFDI standards is mandatory for transac - tions involving Mexican customers; and • monitor legislative changes – Mexico fre - quently updates its tax regulations, and staying informed on changes, such as new provisions or enforcement mechanisms, is critical for ongoing compliance 1.4 Consumer Protection In Mexico, consumer protection regulation is technology-neutral, applying the same rules to traditional commerce and e-commerce. The Consumer Protection Law is broad enough to encompass digital goods and services, and a pending e-commerce NOM aims to establish specific standards and obligations for entities engaging in e-commerce. This NOM will regu - late digital assets, services and transactions,
requiring minimum consumer protection meas - ures from providers who habitually market or sell goods or services through electronic means. The Consumer Protection Act, along with the anticipated NOM and other regulations, man - dates suppliers to adhere to rules that ensure consumer rights. PROFECO, the consumer protection regulator, has issued binding and non-binding guidelines for various sectors and situations, including online activities. These reg - ulations apply across digital platforms such as social media, websites and apps, particularly for industries like food and beverages, cosmetics, hygiene products, financial services and tour - ism. To uphold consumer rights, companies should design their business models and agreements around principles such as fairness, transpar - ency, competition and quality. Conducting legal and compliance due diligence can help identify, mitigate and prevent risks, be they legal, eco - nomic or reputational. PROFECO is authorised to handle consumer complaints, individually or collectively, submit - ted in various formats including by written, oral, telephone or electronic means provided they meet legal requirements. Agreements ratified by PROFECO are legally binding and enforce - able through expedited or executive proceed - ings. PROFECO also facilitates conciliation services, which can be conducted via phone or other means, with written confirmation required for any commitments. In cases involving minors, conciliation is bypassed to ensure their rights are safeguarded. If conciliation fails, PROFECO encourages arbitration by either its own media - tors or an independent arbitrator. Arbitration ensures fairness, legality and equity, and can occur without prior complaints or conciliation.
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