Grouped in the Latin American Internet Association, they indicated that implementation times are limited and few realistic
The Latin American Internet Association ( ALAI ), which groups Facebook, Google, Airbnb, Twitter, Amazon and Mercado Libre, requested time from the Ministry of Finance and Public Credit to comply with the tax reform implementations for the payment of taxes to digital platforms, without affecting users and looking for options for disconnection.
On October 20 the deadline is met for the deputies to pass the Revenue Law for fiscal year 2020 and Google, Facebook, Airbnb, Mercado Libre and Twitter, which offer digital or “intangible” services, as the 2019 Economic Package refers They reiterated their request to work together with the authority to design the best way to collect VAT.
Sissi de la Peña, the representative of ALAI, commented that “the times of implementation are limited and unrealistic”, because neither the companies with the necessary infrastructure and sufficient human capital serve them in a month to adapt to the requests of the economic package.
“The impact for small entrepreneurs in the digital ecosystem will be considerable because they will not have the capacity to cover technical work to guarantee billing systems,” he said.
On the other hand, Luis Antonio González, associate tax specialist of the Sánchez Devvany law firm, said that the retention project for digital platform users proposed by the SHCP, will mainly affect small and medium-sized companies because the cost retention Total digital services will mean a capital flow arrest, and compliance times will prevent many companies from aligning with the new regulation.
“One of the implications of the reform for many of the people who trade through digital platforms such as those that offer services on the Marketplace, seeing their earnings from retentions diminished will return to informality, ” warned Alehira Orozco, director of Mercado Libre public policies.
The sanction to disconnect from the Internet those platforms that cannot comply with time and form with what is requested in the fiscal initiative “is unconstitutional” and goes against international conventions to which Mexico has adhered.
“The penalty for disconnection to anyone who fails to comply with the tax provisions is an undertaking or a physical person that sells and the internet or the same platform for not retaining or knowing that tax is disproportionate and does not achieve the objective it pursues, because lowering the switch to one platform implies that you will no longer collect more , “said Lina Órnelas, director of public affairs for Google.
Disconnecting digital platforms would cost Mexico 6.435 million pesos
“In the case of lowering the switch in Mexico from the Internet in its entirety, the cost amounts to 6,435 million pesos when making temporary blocks,” said Manuel Haces Aviña, of Google Mexico.
Luis Antonio González, an associate tax specialist at the Sánchez Devvany firm, commented at a press conference that most companies would find it compliant with the new provisions in such a short time “and surely many will not comply with aspects other than their intention.”
Small merchants would be harmed, due to the implementations of the secretariat. An example is that of Mercado Libre, González mentioned that if a product with a price of 500 pesos is offered on the platform, in this case, Mercado Libre has to retain 17% VAT, a figure that amounts to 85 pesos, which is divided into two, 30 pesos must go to the treasury and the remaining 55 is the balance in favor of a microentrepreneur who uses this medium to distribute his merchandise.
In that sense, the ALAI establishes that Mexico must follow the recommendations provided by the OECD which mark: Joint work between the tax authority and the companies to establish the best mechanism for collecting VAT, as well as granting the necessary time for adequate implementation by the platforms of the VAT collection mechanism, thereby avoiding the lack of capital flow and informality.
“Companies want to contribute to the development and be more proactive and that more people integrate into digital life […] Mexico could suffer a setback in innovation if there is a temporary disconnection of services. Internet is a decentralized and neutral network so that anyone can innovate and create value, ”said Haces Aviña.
Source: expansion, el sol de mexico
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