To help merchants comply with the Mexico Tax Reform legislation introduced by the Mexican government in December 2019, Wish has rolled out multiple features available to relevant merchants on the Merchant Dashboard. This article walks merchants through how Wish helps collect and remit Value Added Tax (VAT) and income tax specific to the Mexico Tax Reform.
Please note that information provided in this article does NOT constitute tax, legal, or other professional advice.
Value Added Tax (VAT)
New tax reform legislation introduced by the Mexican government requires Wish to act as a withholding agent for Value Added Tax (VAT) on the sales the merchants conduct through our platform. VAT applies to sales made on the Wish platform if goods are shipped from an address in Mexico AND the ship-to address (destination) is located in Mexico.
Important: Merchants’ Registro Federal de Contribuyentes identification number (RFC ID) will determine how Wish will collect VAT from your sales.
In early October 2020 (finalized date will be promptly announced to merchants), Wish will begin collecting Mexico VAT on the sale (price displayed to customers includes 16% VAT) of products that the merchants have offered to customers in Mexico whenever VAT is applicable. If you provided your valid RFC ID to Wish:
- As a Business (persona moral): 100% of collected VAT from your sales will be remitted to you, which you can subsequently remit to the Mexican government.
- As an Individual (persona física): 50% of collected VAT from your sales will be remitted to you that you are advised to remit to the Mexican government. The other 50% will be remitted directly to the Mexican government by Wish.
If you have not provided your valid RFC ID to Wish, you should expect that 100% of collected VAT on your sales (16%) will be withheld and remitted to the Mexican government by Wish.
How to provide RFC ID to Wish?
1. On the Merchant Dashboard, navigate to Account > Tax Settings on Merchant Dashboard. If you have not previously validated your store, please click “Validate my store” to further access Tax Settings (to learn more about how to validate your store, please visit this FAQ). If you have already validated your store, click “Set up now” to start:
2. Next, click Mexico on the table to set up taxes for Mexico, and click “Continue”:
3. You are able to provide your RFC ID on the page that follows:
Note that on this page:
- The “Account type” is based on the information you provided when validating your store
- For inputting a valid RFC ID:
- If your account type is individual (persona fisica), your RFC ID is 13 characters long and is made up of letters and numbers.
- If your account type is Business (persona moral), your RFC ID is 12 characters long and is made up of letters and numbers
- For Mexico-bound orders, you may select the default ship-from location. Your selection may be used to calculate VAT at the time of customer purchase (see calculation details above).
After providing the correct information, click “Continue”.
4. The next page allows you to view a summary of the tax information you’ve entered. Click the checkbox at the bottom to indicate your agreement that you are responsible for the accuracy of any information you’ve provided and for the collection, reporting, and payment of all taxes to the appropriate authorities. You also agree to the Wish Merchant Tax Policy by clicking “Submit”:
5. In the popup modal that follows, click “Confirm”:
6. You’re then redirected back to the Tax Settings homepage, where you can view your submitted tax information, edit tax settings, or delete certain tax settings:
To receive support for issues with your Tax Settings, please email Wish at firstname.lastname@example.org. When you reach out, please include your Merchant ID and a description of the issues you encounter; be sure to copy your Account Manager in your email as well, so we can review and address your question in a timely manner.