Amazon withholds Tax for sellers residing in Mexico

By Lauren Fruncillo May 26, 2020 - 7:00 am

The Government in Mexico have recently introduced new tax reform legislation requiring Amazon to act as the income tax withholding agent on the monthly total sales of its sellers. From June 1st Amazon will calculate and withhold income tax before sending it off to the Mexican Tax Authority.

Who pays what?

Non-Registered Sellers: Amazon will calculate 20% income tax on your monthly total sales if you do not have a valid RFC ID on file, and remit those amounts to the Mexican Tax Authority.

Individual Registered Sellers (persona fisica): If you have a valid RFC ID registered on your Seller Account, Amazon will calculate a rate of 0.4%-5.4% income tax based on your monthly gross sales, and remit those amounts to the Mexican Tax Authority.

Entity/Business Registered Sellers (persona moral): If you are a business and have a valid RFC ID registered on your Seller Account, Amazon will not withhold any income tax on your monthly sales.

Amazon are encouraging those who are about to register or currently have an RFC ID for tax purposes to provide their registration information as soon as possible to Amazon which can be done by going directly to the RFC ID registration page or through Seller Central.

Click here to go directly to the RFC ID registration page; or,
– In Seller Central, go to Settings, and select Account Info.
– Locate the Tax Information section and click RFC ID.
– Enter your RFC ID.
– Click Update.
– Close the page or click Back to return to your Account Info page.

Mexico VAT collection on digital services provided to sellers located in Mexico

The Mexican Government will also be implementing new legislation requiring non-resident companies, such as Amazon, providing “digital services” to begin charging and collecting VAT on these services when they are provided to Mexico based resident Sellers. This legislation will be implemented from the 1st of June.

Should you wish Amazon to include your Mexico Registro Federal de Contribuyentes (RFC ID) on your tax invoices, provide your RFC ID in Seller Central.

To provide Amazon your RFC ID:

-Log into Seller Central.
-Under Settings, click Account Info.
-In the section Tax Information, click RFC ID.
-Click Update.
-To exit back to your Account Info page, click Back.

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