Detailed explanation of Amazon RFC: Mexican tax compliance requirements

In Mexico, technology platforms selling goods and services online are subject to new tax regulations since the implementation of the 2020 economic plan. These regulations stipulate that all imported goods must provide commercial invoices and packing lists. At the same time, importers need to hold a valid Mexican tax number, that is, RFC number, in order to smoothly handle customs clearance procedures.

Definition of Amazon RFC

RFC (Registro Federal de Contribuyentes) is a unique identification number issued by the Mexican Tax Agency to each individual or legal entity. On the Amazon platform, sellers must have this tax ID number to ensure compliance.

RFC tax calculation method

1. Sellers who do not provide a valid RFC ID: If the seller fails to provide a valid RFC ID, Amazon will calculate a 36% tax based on the seller’s total monthly distribution in Mexico, which consists of 16% VAT and 20% income tax. These taxes are remitted to the Mexican government.

2. Individual registered seller: If you register a valid RFC ID and are a natural person, Amazon will calculate an income tax of 0.4%-5.4% based on the seller’s total monthly sales and pay it to the tax authorities.

3. Legal entity registered seller: For sellers registered as companies, if they have a valid RFC ID, Amazon will not deduct any income tax from the monthly sales of corporate sellers.

FAQ

• Q: What should I do if the seller does not upload a tax number?
  A: Although sellers should upload an RFC, Amazon will not restrict their sales in Mexico for the time being. However, Amazon will pay 36% of sales directly to the Mexican tax agency as taxes.

• Q: Do RFCs registered in China need to declare income tax?
  A: Yes, although the specific tax rate is not clearly specified, the default is 30%.

• Q: Do Narf and self-shipping sellers need to provide RFC?
  A: Narf and self-shipping sellers are not affected and therefore do not need to submit an RFC. This is because among self-delivery sellers, the buyer is the importer and is responsible for all import duties and VAT. Therefore, e-commerce sellers do not need to register the RFC locally.

By understanding and complying with these RFC-related tax regulations, sellers can not only ensure legal operations in Mexico, but also effectively avoid potential tax risks.