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!

[Peter3390]

"It appears that Airbnb is withholding Income tax but not remitting it because I am getting it back with my payout."

Are you sure? If you're referring to the "Host Remitted Tax" if your reports are like mine you will find that it does not equal the total of the ISR (income tax) and IVA (value added tax) that they withhold. What is it, though? I still can't get them to tell me.

[Mark-and-Gabriela0]

It’s a real nightmare!! The worse part if you are renting your property at 150 dollars a night, the guess will see it’s at 279!!!!

[Vanessa1678]

This guide has most answers, in spanish however https://assets.contentstack.io/v3/assets/bltb428ce5d46f8efd8/blt149e452d316dcaa9/5fdd215cb80b0a1a68f...

you have to get a RFC in order to avoid those high tax rates! Depending on the value of your property you can do this obtaining a residency. If you have a Mexican fideicomiso, maybe with the fideicomiso RFC, if not, setting up a company may be a solution... I might be able to help! write me

[Daniel10214]

Hey Vanessa,

If I have a fidecomiso, woukd I still be able to get the RFC even if Im not a resident?

Im so confused with the taxes from the income made from my property in Mexico.

I havent started yet, but Im planing to start renting it next year. Im just trying to figure it out ahead of time.

Thanks

[Reny25]

Hi @Vanessa1678 , 

I was told I do not have to report taxes to Mexico if I am going to set my account in the US. Meaning phone number, address, and banking account from the US. Although, the property is in Mexico. Do you have any knowledge you can share with me, please?

I’m new.

Reny

[Sujey-And-Michael0]

@Reny25 It doesn’t matter where you account is. If the money is made from a property in Mexico then you pay your taxes to Mexico. The big problem is Mexico makes it difficult to get an RFC (tax ID number) as you must first become a resident…it’s a huge pain in the ass. And you can only register with the SAT to pay taxes if you have an RFC. Otherwise your choices are to pay a lot of money for an accountant in Mexico to legally represent you or just let Airbnb withhold an automatic 20% of your revenue. In top of a 16% VAT tax plus your local tax depending on the state. I think Quintana Roo is 6%. The rest of your earning will go to cleaning, maintenance, property management…good luck. 

[Robert1555]

Airbnb support is a joke. Full of automated Robo responses always telling you they are concerned and want to help. Only thing they provide is lip service. You will be bounced around and receive multiple emails from support services that have not read any of your replies! I too am very frustrated with Airbnb. By the way they will not provide any reimbursement for house rule violations without actual out of pocket damages… so if a guest brings a dog or smokes on your property in violation of your rules, and even though you have stated fines for those rules, you must provide documentation and invoices for damages to be reimbursed…fyi!

[Sondra46]

I'm new to Airbnb as of June 2022. I live in California and have had some success hosting guests at a timeshare resort in Los Cabos where I'm a member. The issue of income tax withholding by Airbnb for Mexico SAT is confusing to me and I would appreciate any clarification anyone could provide, especially anyone else who is hosting at a timeshare in Mexico.

It seems like I can't get an RFC unless I'm a Mexican resident or establish a business in Mexico. Is that correct? 

I will only be renting out the equivalent of 5 weeks of a 2-bedroom suite at the resort each year so don't anticipate earning much more than 300,000 pesos/year ($14,600 US). I'm not sure it's worth the trouble to get the RFC.

Would I be better off just treating the tax withholdings by Airbnb as my final payment?

Also, Airbnb charges the guest an Occupancy Tax. As this is a resort, I believe the resort is already paying that tax and wrapping into what I pay for time there. Does anyone know if Airbnb is actually paying those Occupancy Taxes to the state in Mexico, in which case Mexico is being paid twice, or are they just pocketing that money?

[Sujey-And-Michael0]

Yes to get an RFC as a foreigner you would need to get resident status. Took me 5 months just to get an appointment with the consulate in Sacramento (all the California offices are booked solid for temp resident visas). I had all my paperwork financials, marriage certificate apóstoles (I’m married to a Mexican citizen), and title for my properties I own in Mexico. And I was denied!! Lol I asked why they said I was suspicious. I guess it is suspicious to go thru all this hassle just to pay taxes. So I’m just gunna say forget it. I looked up the tax bracket I would be in and the ISR rate would be 23% so I’m better off just letting Airbnb take the 20% and not have to file taxes every month and go thru the hassle of getting a resident card just to get an rfc. I would think at some point Mexico will make it easier to get an rfc so I’ll just wait until then. I’m done dealing with trying to get a resident vías so I could get a CURP and THEN get my rfc only to pay more taxes lol. The whole system is a joke. 

[Daniel10214]

Thanks for all this info.

Im from Canada and Im planning to start renting my condo next year.

So what would I do to declare the taxes paid in Mexico through Airbnb?

Are you safe just to let Airbnb collect the taxes for you?

Im new to this, Im kind of confused how to declare taxes for the income that I will hopefully be making in Mexico.

How do you do to declare taxes both in Mexico and the US?

Thanks again

[Peter3390]

For US tax filings, it's relatively easy. I just plug them in to the online forms that I get from my accounting firm as taxes charged/paid in Mexico. I have no idea how that would work in Canada but you should ask your accountant.

I'm also not sure what your tax obligations are in Mexico if you don't live here. You would have to ask an accountant here. If it's all income from AirBnB then you would want an accountant who is experienced with the Régimen de Actividades Empresariales con ingreso a través de las plataformas tecnológicas. I've found that not all accountants have expertise in that area.

[Peter3390]

It's a whole lot quicker and easier to go to the SAT when you are in Mexico.

[Sondra46]

What is "the SAT" please?

[Karen3152]

Please see my AirBnb posts on how to obtain an RFC as a foreigner without residency.  I believe you will need to find a Mexican accountant who will act with a Power of Attorney on your behalf.

[Peter3390]

@Sondra46, Servicio de Administración Tributaria.

"What is the SAT?
SAT is a governmental institution in Mexico that was created in 1997 and is responsible for ensuring that individuals and corporations contribute proportionally and equitably to public spending through their taxes.

The SAT is a decentralized (i.e., independent) body of the Mexican Ministry of Finance and Public Credit, with autonomous powers and faculties. That is why it is correct to say that someone will "register with the SAT" or "register with the Treasury".

Translated with www.DeepL.com/Translator (free version)"

https://www.tiendanube.com/blog/mx/que-es-el-sat/

The Mexican Ministry of Finance and Public Credit (treasury) is known as Hacienda, in case you see that term mentioned.