Multinational corporations with Mexican subsidiaries need to properly assess VAT treatment of cross-border operations
Mexican courts have confirmed in multiple rulings that exported services should be enjoyed outside of Mexico for the 0% value added tax (VAT) rate to apply. Notwithstanding such precedents, in practice, it can be quite challenging to determine where exactly certain services are 鈥渆njoyed.鈥� The latest ruling on this issue came from a federal circuit court, which provided additional guidance on how the courts analyze and apply the term 鈥渆njoyment鈥� in certain cases.
Multinational corporations with Mexican subsidiaries engaged in service activities鈥攊ncluding shared service centers or centralized corporate functions鈥攏eed to consider the implications of this ruling to properly assess the VAT treatment of their cross-border operations.
Read a聽February 2024 report* [PDF 221 KB] prepared by 乐鱼(Leyu)体育官网 professionals:聽Mexican Rulings: Exportation of Services Eligible for 0% VAT
* Reproduced with permission from Tax Management International Journal, 1/30/2024. Copyright @ 2024 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com