Mexico Changes Tax Obligations for Media, Agencies and Advertisers

The new regulation in Mexico for hiring publicity related services will be enforced in September. This legislation introduces changes in the tax declaration and exchange of commercial information between the media, agencies, and advertisers.

The law for transparency, prevention and to combat non-compliant practices regarding hiring publicity, was made to promote transparency in the publicity and advertising to avoid abuse and bad practices against advertisers. Non-compliance will result in economic sanctions.

New Obligations for Hiring Publicity

The Publicity Transparency law determines how media, agencies, and advertisers engage, to ensure that the company that hires the publicity has knowledge of all the hired services and costs derived from them.

Obligations for Agencies

The transparency law particularly affects agencies which must adopt most changes. Publicity Agencies are those who create, design, plan and execute publicity campaigns, and hire advertising space for their clients.

Beginning next September they must comply with the following requirements:

• Establish a mandate contract with the client.
• Compile information in CFDI issued by the media before sending it to the client.
• In the case of programmed digital advertising they must:
  • Communicate the third-party vendor of publicity space to the client as quickly as possible.
  • Issue a report of the results.
  • Inform the client of the financial relationships that the agency or conglomerate has with the media they will buy.
  • Use the Complemento Concepto por Cuenta a Terceros (concept for third-party accounts complement).

Obligations for Media

Media in this context is any entity that sells advertisement space through printed media, telecommunications, radio, satellite signals, internet, fiber, cable or any other medium.

Media companies must send the Concept CFDI for the sale of advertising space directly to the final client, even if it is the agency that performs the payment for the final client.

Adapt to the Measures Imposed by the Advertising Transparency Law With EDICOM

Through EDICOM’s solutions media companies, agencies, and advertisers can exchange the mandatory commercial information guaranteeing its integrity and confidentiality. EDICOM can also issue and declare the electronic invoice and the concept for third-party accounts complement to the SAT.

The whole document approval flow to comply with the new advertising contracting legislation can be performed with EDICOMSignADoc.

EDICOMSignADoc enables all the necessary parties to approve each electronic document guaranteeing their integrity and confidentiality by incorporating digital signature technology whenever necessary. The solution can also integrate with any of the company’s business applications and offers traceability to the entire document life cycle.

CFDI electronic invoices and the concept for third-party accounts complement can be issued through EDICOM’s Global e-invoicing Platform and be sent to your final client and reported to the SAT directly from your ERP.

An automated electronic solution that enables media and agencies to comply with the new requirements of the Advertising Transparency Law. Get in touch with our commercial department for more information.