Mexico Income Tax Withholding for Mexico based-resident sellers


#1

The Mexico Government has introduced new tax reform legislation that requires Amazon to act as the income tax withholding agent on your monthly total sales.

Beginning June 1, 2020, Amazon will begin to calculate income tax based on your total monthly sales and remit the withheld amounts to the Mexican Tax Authority.

Your Registro Federal de Contribuyentes identification number (RFC ID) will determine the amount of income tax withholding Amazon will calculate on a monthly basis.

Non-Registered Sellers: Amazon will calculate 20% income tax on your monthly totally 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.

If you are about to register or currently have an RFC ID for tax purposes, do not delay and provide your registration information to Amazon:


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

#2

Is it that the Mexican Government is really in need of cash? or Is it that Mexican sellers don’t seem to pay income tax? :train2:


#3

seems like a pain for amazon i think it would be better just to delete mexico


#4

Is it about Sellers BASED in Mexico or SELLING to Mexico?


#5

@TigerMedia it would make sense for sales on .mx not sales on .com that are shipped to Mexico.


#6

The thread title would strongly suggest that this is for all Mexico based-resident sellers, likely involving all marketplaces. (it is an income, not a sales tax)


#7

If a business gets registered for an RFC ID number would still pay income tax? Or the income tax would be paid only if a business is not registered for RFC ID? I’m asking this for US based business?


#8

Can someone please clarify this? is this for US based seller selling in mexico as well or only for Mexican based sellers only? Also dont you think its a little too much charging 20%? I mean most of us dont even make that much in profits…


#9

Can someone at Amazon confirm whether or not this change will impact those participating in NARF (North American Remote Fulfillment) who are US based?


#10

I am confused on this, I am planning to close Mexico NARF in case of further clarification. But my next question is: how do I close Mexico NARF?


#11

From an email from Amazon last week

IMPORTANT: Please provide your MX Tax ID, Registro Federal de Contribuyentes (RFC)
Dear Selling Partner,

We are reaching out to provide information about your Amazon account and Mexico Tax Reform rules introduced in December 2019, that begin on June 1, 2020.

Beginning June 1, 2020, Mexican law requires Amazon to act as a withholding agent of Mexican income tax on your sales as well as value added tax (“VAT”) charged on the sales you conduct through our online store. Amazon must begin withholding VAT and income tax on your total monthly sales when applicable*. Your Registro Federal de Contribuyentes identification number (RFC ID) will determine the amount of withholdings that Amazon will apply on a monthly basis.
Please make sure your Mexico Seller Account has your valid and updated RFC ID registered.

When are these conditions applicable?
VAT (IVA) applies when: A sale is made on a Mexico Online store, is shipped from an address in Mexico, and the ship-to address (destination) is in Mexico.
Income Tax (ISR) applies when: Mexico Income tax applies to Sellers with a location in Mexico, selling in Mexico or abroad, and Sellers holding inventory in Mexico.

What does this mean for you?
Most importantly, if you or your business have a valid RFC ID, please register it on your selling account immediately. Mexico RFC ID registration at Amazon is not retroactive. Any tax amounts withheld prior to registering your valid RFC ID with Amazon will be remitted to the Mexican government and will not qualify for a refund from Amazon, for any reason.

What can you expect?
On June 1, 2020 Amazon will begin collecting Mexico VAT on the sale (VAT inclusive prices) of products you offer to customers in Mexico (buyer pays) whenever VAT is applicable.

Amazon will also calculate your monthly total sales to determine the amount of income tax withholdings that are applicable to your balance.

If you have not provided your valid RFC ID to Amazon you should expect that:

  1. 100% of collected VAT on your sales will be withheld; and
  2. 20% of income tax applicable to revenue from your sales will be withheld.
  3. Both will be remitted by Amazon to the Mexican government.

If you have provided your valid RFC ID to Amazon:

As a Business (persona moral): 100% of collected VAT from your sales will be remitted to you, and no income tax will be withheld.
As an Individual (persona fĂ­sica): 50% of collected VAT from your sales will be remitted to you, and 50% will be remitted directly to the Mexican government.
The amount of income tax withheld will be based on your monthly earnings and sliding scale. The withheld amounts will be remitted directly to the Mexican government.

If you are about to register or currently have an RFC ID for tax purposes, please do not delay providing your registration information.

You can follow this video tutorial which walks you through these steps.

Check video
1 Click here to go directly to the RFC ID registration page; or
2 In Seller Central, go to Settings, and choose Account Info
3 Locate the Tax Information section and click RFC ID
4 Enter your RFC ID
5 Click Update
6 Close the page or click Back to return to your Account Info page
7 Upload here

your RFC ID in PDF or JPG format.
You can download the RFC ID PDF or JPG from this
official government site for free)

If you have questions about this process, you can contact our Selling Partner Support team here.

If you are interested in the North America Remote Fulfillment Program (NARF), please write an email including your Seller Account name and token ID to narf-support@amazon.com .

Important Notice: Information in this communication does not constitute tax, legal, or other professional advice.

Best regards,
Amazon


#12

RFC are for Mexican companies and residents. It is the equivalent of EIN in case of companies. Foreign companies selling to Mexican customers do not need RFC. I doubt a US based business can apply for an RFC, and why it wants one anyway?


#13

Should be for Mexican based sellers. US companies pay income tax to US, Mexican companies pay income tax to Mexico. If you are US based and sell to Mexican customers this should not apply to you.


#14

According to the email, we would have to pay 20% income tax if we don’t have an RFC ID number. If we do have one, the income tax percentage would be based on income. We are based in USA and according to the email, this applies to FBA sellers not only Mexican residents.


#15

OMG! This is even worse than Amazon’s collection of unconstitutional tariffs on interstate sales. Hey Jeff! Tell Mexico to go to Hell, then start after the tariff laws. You haven’t been on the side of free maarkeets for a long time. Now is the time to come home!!


#16

Every government is in need of cash, it is what they do.

And we all know all American Amazon sellers pay ALL their taxes. To say otherwise would be ridiculous.


#17

Correct. In Dublin IRE, they taxed the windows on your house. Here in Maryland, we were the first state to actually tax the rain. :train2:


#18

How about we delete you instead


#19

Still no clear response from Amazon about Mexican taxes for NARF program


#20

I really did not understand. Because we are selling in mexico but ships from USA. And we are already paying taxes for USA. Am I going to pay tax mexico too ( I dont have rfc)?