Mexico’s igaming market blurred by new digital VAT scheme

The Mexican igaming market has been disrupted by the introduction of a new ‘16% digital services tax’ for all foreign-based companies.

Last week, Mexico’s Finance Ministry launched its new ‘SAT Tax’ scheme enforcing the nation’s standard 16% value-added tax charge to be sanctioned on all digital transactions and services, effective from 1 July 2020.

The VAT extension forms part of the MORENA government’s ‘2020 Economic Package’, in which President Andres Lopez Obrador seeks to align commercial tax codes between foreign and domestic enterprises, creating a level-playing field for market competition.

Drafted by the MORENA party in 2019, Mexico’s SAT scheme will be applied on digital transactions related to retail, goods, services, content and entertainment verticals.

The Mexican government has clarified that its new tax scheme will be applied to online gambling services undertaken by non-resident firms.

US Tech giants, Amazon, Google, and Airbnb are reported to have urged the Mexican government to delay the introduction of its new VAT scheme by a further five-months to accommodate for ongoing market disruptions.

Despite the MORENA party underlining its SAT scheme as headline initiative, questions remain as to how government agencies will enforce the tax on foreign gaming incumbents as Mexico has yet to define its online gambling laws with regards to individual igaming verticals.

Check Also

Swedish consumer affairs agency highlights operator deficiencies on terms and conditions

Konsumentverket, Sweden’s consumer affairs agency, has issued a warning to licensed online gambling operators of …

BMIT strengthens innovation muscle investing in EBO Ai

Malta-based IT services and enterprise solutions provider BMIT Technologies has acquired a stake in AI …

Stefan Lundborg resigns from non-exec Kindred role pending SECA investigation

Kindred Group Plc has informed investors that corporate advisor Stefan Lundborg has resigned from all …