HELP! Mexico NEW Taxes - VAT, Income

[Oran369]

Hello, there are any hosts who have their accounts in USA or Canada and also use them in Mexico?

Just trying to learn what best strategy. I recently saw an email that Airbnb going to apply new taxes on my earnings. About 20% and they recommend I will open a business in Mexico in order to get it back to 2-4%

I just saw the new earning modification on my income transaction

A total reservation "Payout" from $98.76 came to my bank account as $67.30

and a total "Payout" of $353.69 transferred to my account as $241.01 

Before that, I was getting the full total payout transfer to my account. It looks like now %31 of my earnings going to taxes, they take 2 types of taxes out of my total "Payout"

Tax Withholding for Mexico Income - %17.6

Tax Withholding for Mexico VAT - %14.1

Can anyone explain to me what is going on? So total they get %31.7 out of my total Payout. Those the guests not paying the VAT anymore with their reservation? Those the host responsible for both?

*********While I type this I saw another thing I don't understand. So I will share the details

The "Total Payout" is 

$353.69

When I go to the "Transaction History" I see new 

4 different transactions lines that never have shown in any other transaction:

Host Remitted Tax +$50.08

Reservation +$303.61

Tax Withholding for Mexico Income -$62.60

Tax Withholding for Mexico VAT -$50.08

The total transaction was $241.01 out of $353.69 Total Payout. I'm so confused about why "Host Remitted Tax" wash the "Tax Withholding", anyone can help? 

Any information, tips, or best strategy will be super welcome!

[Oran369]

Also, the total "Guest Paid" was  $424.75 after guest service fee and occupancy taxes and cleaning fee

[Sherilyn8]

I don't know where you are but feel your pain. There is a list of states where Airbnb collects all of the taxes from the renters at time of booking and provides the breakdown, so the renters won't think we are getting all that money. Guanajuato is NOT one of those states.

We submitted our RFC number, have attended a webinar, talked to our Mexico accountant, and spent hours on the Airbnb site without answers. They say we can set it up manually, but the links have changed and no longer work. 

Maybe if I set up a business account but that requires re-making my entire site and losing track of my current and future renters.

I was hoping someone here has figured it out

If I do, I'll come back and tell you.

I'm still working on it

[Karen3152]

I’m in Baja Sur, they charge the guest the VAT taxes, however, as the host, we are responsible for paying our VAT to AirBnb for their services.  This is where the numbers get crazy.

[Sujey-And-Michael0]

Yes the guests are charged the VAT however the VAT is not paid to Airbnb for their services. The VAT is a federal Mexican tax (along with the ISR tax) paid directly to the SAT. If you do not register an RFC number with Airbnb they will deduct the VAT from you and supposedly submit this tax to the SAT for you. It use not a fee for Airbnb services. 

[Sujey-And-Michael0]

Sorry to be clear, yes the VAT is for using Airbnb services (the VAT is basically a sales tax).  But it is not paid to Airbnb. The tax is paid to the SAT. If you have an RFC you pay this tax yourself. If you do not have an RFC then Airbnb supposedly pats it for you. However I have asked time and time again for proof that they are submitting this tax instead of keeping it and they have never supplied any proof. So idk 

[Elvia16]

You will need to have an accountant in your home country that understands international affairs. 

We do have a business  in Mexico therefore have a TAX ID (RFC) that allows 6% tax for our state in Mexico 

(6%) . Our accountant state side deducts this from our US Tax (for our state 30%) so our US Taxes are lower.

Advantage to having Mexico RFC all your expenses i.e. staff wages, utilities, hosting materials for guests,

maintenance materials, etc are tax deductible in Mexico. USA bought materials i.e bedding, linens, our travel expenses, etc  can be tax deduced in USA . 

Hope this helps. 

[Peter3390]

You can only deduct expenses in Mexico if you request a "factura" (official tax receipt) for each one. Those are issued electronically. You have to have not only a tax ID (RFC) but also have registered with Hacienda (like the IRS) as a taxpayer and have the corresponding data to give when you request the factura. The chances are that your laundromat, cleaning person and other expenses are in the informal economy and can't "facturar." Those that can will charge you more if you want one, because then they have to charge you IVA (VAT).

So deductions in Mexico are not easy. However, I've been given to understand that if you make less than $300,000 MXN on AirBnB you can get a low tax rate (2%) as long as you DON'T take deductions.

[Bernard379]

Very helpful!  Do you have an accountant you recommend?  

[Maggie279]

I'm having the same issue and I called Airbnb many times and nobody seems to know how to help and nobody has responded to my questions. They are taking almost 50% of my payout!

Airbnb seems not to care, I have over a month with this issue. I'm thinking about removing my house from Airbnb because I can't cover my expenses.

By the way VAT now is charged to both host and guest.

[Karen3152]

As a host, you are responsible for a portion of the VAT because AirBnb must collect that from you for their services.

[Jesus70]

I'll add that I'm in the same boat.  Poor responses as it relates to this topic and they don't seem to know, either.  After 1.5mos at this, I wrote a letter to airbnb CEO & sent copy to CA attorney general office - not hoping for much but at least letting them know something is amiss. 

One twist to my circumstance - i have 2 different accounts both properties in Mexico (same state); one is getting charge all the taxes discussed and the other is not.  Go figure.  Big black eye for the platform that I thought was top notch. 

[Sujey-And-Michael0]

I too have property in Mexico and Airbnb is withholding 20%ISR and 16%VAT, which is fine for now until I get my RFC.  My main complaint (been dealing with them every day for 2 weeks now and still no answers) is I want proof the taxes they are withholding are being paid to the SAT in Mexico. They just keep deflecting. I don't think they are submitting these payments. This can't be legal. I'll be following this topic to see how many others are affected by this. This might require legal action.

[Karen3152]

AirBnb remits taxes to SAT monthly in one lump sum for all foreigner paid VAT or collected income taxes issued to a generic foreigner ID where the recipient and payee (you) does not have an RFC.  The generic foreigner RFC is not unique to an individual (you).  Since all taxes must be paid to an RFC number in Mexico, this is how they handle it.  It is one single RFC number that everyone uses, including VRBO.  So, massive amounts of money come into SAT through that RFC. If you receive a withholding certificate from VRBO, you need to be aware that it is only helpful to you in paying taxes in your home country as an informational receipt.  It is in pesos, so you have to convert it to US dollars.  My guess is that AirBnb decided that the withholding certificate issued to a USA host without an RFC is useless to the host since withholding certificates are not required in the US in order claim them on your US taxes.  The host can download and print their transactions from their platform which gives them their withholdings in US dollars.  I would think that AirBnb submits one massive factura (invoice) to SAT for all their withholdings in pesos.  This choice is probably not illegal on the part of AirBnb.

The foreigner generic RFC: XAXX010101000

if you don’t have an RFC and you are using VBRO, this is the RFC number you will see.

I am not a tax expert, by the way.

[Sujey-And-Michael0]

That makes sense as to why Airbnb does not provide individuals with a tax certificate showing what they have paid to the SAT in your behalf like VRBO does. And yes it is true you do not necessarily need a tax certificate for US purposes but if I were to be audited by the SAT (Mexican tax authorities) I would definitely need an individual certificate such as the o es VRBO provides. I am not so concerned with the US tax authorities since the taxes are to be paid to Mexico.