Digital platforms will also pay income tax: this is how the SAT will withhold the tax

25/10/2020

In June of this year, the withholding of Value Added Tax (VAT) and ISR came into effect for all those people who are working through digital applications to generate their own income, such as drivers from Uber, DiDi, Airbnb, a company that offers a digital platform dedicated to the hosting service, as well as offering products through Mercado Libre, among others.

The intention was to authorize single rates with respect to the type of activity and retention of income tax by digital services for all those who obtain income through them. With the new modality, the Tax Administration Service (SAT) will retain 2.4% of ISR in the area of electronic commerce, which will mainly affect small vendors and entrepreneurs with low income.

In other words, the same percentage will be retained from someone who earns little to others who record thousands of pesos, since the Government considered it more difficult to have different rates in relation to income.

According to the newspaper La Jornada, the difference in this proposal is that previously the retention rates varied from 0.4 to 5.4% and there was a number that remained, all those who transacted under 100, 000 pesos were only retained 2%, now, with 2.4% it is higher.

This will lead to conflicts, since there is a very important segment of sellers in the market that does not generate more than 25,000 pesos per month, and their retention is 1.1%; however, it is now increasing. Also, they will have favorable balances in the SAT, and will have requests for reimbursement, which will affect their capital flows.

To date, at least 25,000 vendors have already opted to leave the platforms and have withdrawn after the implementation of these taxes.

According to the newspaper El Financiero, the initiative proposed in the 2021 economic package will directly impact more than 90% of the businesses that currently carry out online sales operations on different platforms, warned the Mexican Association of Online Sales (AMVO).

In May 2019, Ramón Escobar, general director of the Cabify transportation platform, told El Economista that the new regulations will have an economic impact not only on applications, but also on driving partners.

He dismissed that there would be increases in the rate to users, but said that the administrative costs, licensing costs and processes for each driver, mean a "considerable impact" that would affect the organization of drivers.

It should be noted that based on the modifications, the possibility of blocking or vetoing platforms that do not comply with the established and in accordance with their fiscal obligations, by not paying VAT and ISR, was also raised.