In December 2020, the Mexican government published a series of updated to the Income Tax Law, the Value Added Tax Law and the Federal Tax Code applicable from 1 January 2021 onwards.



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Diario Oficial de la Federación. Official Gazette. “DECRETO por el que se reforman, adicionan y derogan diversas disposiciones de la Ley del Impuesto sobre la Renta, de la Ley del Impuesto al Valor Agregado y del Código Fiscal de la Federación.”. 08/12/2020. Available at:

Inception date: 01 Jan 2021 | Removal date: open ended

Import ban

On 8 December 2020, the Mexican government published a Decree that updates the Income Tax Law, the Value Added Tax Law and the Federal Tax Code from 2021 onwards.

Several modifications relate to the possibility of temporarily blocking foreign providers of digital services from offering their services in Mexico should they fail to comply with the digital tax laws. This option is known as the “kill switch” and it only affects online service providers without an establishment in Mexico. Hence, domestic firms, or those with an establishment in Mexico are not subject to the mechanism and do not run the risk of being temporarily shut down through the "kill switch". 

According to the new Article 18-H BIS of the Value Added Tax Law, the decision to block access comes from the Mexican Tax Authority (SAT in Spanish). Moreover, the blockage should be enforced by the concessionaire in charge of the public internet network and shall be in effect until the company complies with the obligations. Importantly, new Article 90-A of the Federal Tax Code develops sanctions ranging from MXN 500 000 (approx. USD 25 264) to MXN 1 000 000 MXN (approx. USD 50 528) applicable to those concessionaries that fail to temporarily block the faulting service provider.

The measure falls under the import ban category of the GTA database, as it temporarily forbids the importation of digital services from providers that do not comply with certain conditions.

The introduction to the kill switch provision into the Mexican tax law has been heavily criticized by Mexico’s biggest trade partners and the media. The measure entered into force on 1 January 2021.