Mexico’s Digital VAT Grab Creates Confusion for Companies

Nearly three months after Mexico’s plan to boost tax collections from digital companies took effect, many are still at a loss to understand just how the tax works.

Tech giants such as Amazon, Uber Technologies Inc., Airbnb Inc., and Netflix Inc. must collect a 16% value-added tax for their services provided in Mexico as of June 1 under a measure that is part of the country’s 2020 budget.

“There is now a lot of confusion about which companies have to pay the tax and how they should be imposed,” said Sissi de la Peña, head of e-commerce at the ...