Hi, Airbnb started withholding taxes from our Airbnb property in Mexico a couple years ago, even though we have paid our income taxes for the property in Canada for years. We should be allowed to file in Canada, according to the convention between our countries, yet they still deduct the withholding income taxes. They said we could deduct the amount from our Canadian income taxes, but they aren't providing the proper paperwork that the Canadian government accepts. I'm told we need a Notice of Assessment or Foreign Income Tax Return. They haven't provided either. Now I'm paying double taxation in Canada and Mexico. This is infuriating. Has anyone consulted tax lawyers about this? I've lost $13,000 and counting so far.
Here's the convention between the Government of Canada and the Government of the United Mexican States: (https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/mexico-conventi...)
Elimination of Double Taxation
1. In the case of Canada, double taxation shall be avoided as follows:
a) subject to the existing provisions of the law of Canada regarding the deduction from tax payable in Canada of tax paid in a territory outside Canada and to any subsequent modification of those provisions - which shall not affect the general principle hereof - and unless a greater deduction or relief is provided under the laws of Canada, tax payable in Mexico on profits, income or gains arising in Mexico shall be deducted from any Canadian tax payable in respect of such profits, income or gains.
... and a "non-discrimination clause":
The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.
There is definitely a greater deduction provided under the laws of Canada because we a) aren't charged twice and b) we can deduct our expenses off our income taxes here.
If anyone has any insight, that would be helpful, we'd appreciate it. We haven't been able to get an RFC so far. If anyone knows the best/easiest way to get an RFC, please let me know!
Jessica
