Tax Attorney Eugenio Grageda was quoted by TaxNotes on the recent statement by Deputy Finance Minister Arturo Herrera that the Mexican government intends to include a tax to digital services in the 2020 budget. Mr. Grageda discusses how the taxable base for the proposed Mexican Digital Services Tax (DST) is ambiguous because the taxable income would depend, among other factors, on the number of times advertising appears on a digital platform, the number of users concluding operations and the number of users with accounts on the platform.
"It is not clear if both the seller and the buyer would be considered as users concluding operations in order to calculate the DST," Mr. Grageda said. "If that were to be the case, an illegal double accounting of the income would exist. Also, the number of accounts may not reflect proportionate use and the number of transactions being carried out on the platform. Many accounts might be dormant."
READ: Mexican Government to Propose a Digital Services Tax in 2020 (Subscription Required)