Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/16/2012

Mexico - VAT rate on food and drug consumption 

October 16: There is an ongoing discussion in Mexico about the rate of value added tax (VAT) that is to apply with respect to food and drug consumption.

The current VAT rate on food and drug consumption in Mexico is 0%. However, some have suggested that with the implementation of a general VAT rate of 16%, a higher rate of VAT also ought to apply with respect to food and drug consumption.


According to a study conducted by the indirect tax practice (Práctica de Impuestos Indirectos) of the KPMG member firm in Mexico, a global tendency is for food and drug consumption to be subject to VAT at a rate greater than 0%. However, many of the countries in the study (especially those in Europe and OECD member countries) impose a “reduced VAT rate” on food and drugs (with an average VAT rate of 9% for food and 7% for drugs), instead of the standard VAT rate that typically applies for other goods and services.


Read a September 2012 report (Spanish) prepared by the KPMG member firm in Mexico: Tendencias globales en el gravamen sobre el consumo de alimentos y medicinas




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