The provision to tax VAT on digital platforms in Mexico will apply from June 1, 2020 and will make some streaming services such as Netflix more expensive.
SET Puebla News
Starting June 1, the Netflix price in Mexico will be 16% more expensive. And it is not that the company has decided to raise the costs of its plans, but rather that these new rates are a reflection of the incorporation of VAT into digital services in the country.
At the end of 2019, the Senate of the Republic approved the measure to tax 16% VAT, like the rest of the physical commerce, to service platforms and the sale of digital products such as Netflix, Uber and Mercado Libre.
At the time, it was stipulated that the measure would begin to run in June 2020, and now the date arrives, and with it the new rates. In advance, Netflix will begin notifying users of the increase in the coming days.
“As reported in late 2019, the Mexican Government is incorporating VAT into digital services such as Netflix as of June 1. Accordingly, we have begun to notify our users that there will be an adjustment in our prices. (…) Members will see this tax as a separate item on their invoice from June 1, ”a company spokesperson told Expansión.
According to the streaming firm, the new price is only a reflection of the transfer of the tax to the cost that these subscription plans already had in the country and clarified that, in the most basic plan of their services, they will absorb half the VAT , so the user should only pay 8% extra, that is, 10 pesos more at the original cost.
Once with the tax, these will be the prices that the three subscription plans of the platform will have.
Basic Plan (1S) goes from 129 pesos to 139 pesos. Standard Plan (2S) goes from 169 pesos to $ 196 pesos. Premium Plan (4S) goes from 229 to 266 pesos.