Mexican Rulings: Exportation of Services Eligible for 0% VAT

Mexican courts have confirmed in multiple rulings that exported services should be enjoyed outside of Mexico for the 0% value added tax (“VAT”) rate to apply. Notwithstanding such precedents, in practice, it can be quite challenging to determine where exactly certain services are “enjoyed.” The latest ruling on this issue came from a federal circuit court, which provided additional guidance on how the courts analyze and apply the term “enjoyment” in certain cases.

Multinational corporations with Mexican subsidiaries engaged in service activities — including shared service centers or centralized corporate functions — should consider the implications of this ruling to ...