Digital Tax Receipts of withholdings for Digital Platform Services. (Uber, Cabify, Uber Eats, Rappi)
As of June 1, 2019, the option to carry out the withholding of the Income Tax and VAT to individuals who independently provide passenger land transport service or delivery of prepared food through the use of digital platforms entered into force. These withholdings must be made by those who provide the use of platforms such as legal entities resident in Mexico, legal entities resident abroad with or without a permanent establishment in the country and foreign legal entities. For such purposes, they must submit clarification case on the Tax Administration Service website, expressly stating that they will carry out said withholdings (rule 3.11.13. RMISC 2019).
The company that pays the service providers has to adapt its Digital Tax Receipts issuance system; the company will be required to issue a Digital Tax Receipt with the complement in question, where it will report the following to the Tax Administration Service:
- Payment method.
- Income Tax retention rate (from 3% to 9%).
- VAT withholding rate (8%).
- VAT at 16% or 8%.
- Service type (Passenger ground transportation service or Delivery of prepared food).
The Income Tax withholding amount varies from 3% to 9% according to the income amount, which can be monthly or weekly and in the VAT case, the withholding rate will be 8% for any income amount.
A) Weekly withholding B) Monthly withholding
|Weekly income amount||Withholding Rate (%)|
|C_Weekly withholding range||Minimum value||Maximum value||Income Tax||VAT|
|Monthly income amount||Withholding Rate (%)|
|C_Monthly withholding range||Minimum value||Maximum value||Income Tax||VAT|
You should also consider the following:
- Issue no later than the 5th of the month immediately following the monthly Digital Tax Receipt in question along with the withholding supplement.
- For the Individual Taxpayer to prove the withholding of Income Tax and VAT in their provisional or final payments, it will be necessary to have the Digital Tax Receipt of withholdings and payment information that includes the complement of Technology Service Platforms with the requirements indicated by the Tax Administration Service.
- Individuals will consider the withholdings as definitive and will not give rise to refund, compensation, accreditation or any favorable balance; and it will be understood that they stopped choosing to apply the benefits established in article 23 of the LIF for payment exemption of Income Tax and VAT for RIF taxpayers (rule 3.11.15. RMISC 2019).