Mexico raises VAT to 16% on readymade snacks and foodstuffs

The Mexican government has re-categorised readymade foods from the reduced VAT rate of 0% to the standard rate of 16%. The new rate was brought into effect on 1 July 2015.

In accordance with the Mexican VAT Law, any food prepared ready to eat at the point of sale is considered as readymade and subject to the new rate. This includes ‘fast food’, sandwiches, pizza, hot bread, snacks, rolls etc.

Mexico raised its VAT rate 1% to 16% in 2010. It has made several unsuccessful proposal to broaden the VAT base by bringing all foodstuffs and medicines into the standard VAT rate band.

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