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]

@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.

[Charity63]

I went through the entire process only to learn that you still owe the same amount of tax.  Getting residency and RFC only reduces your withholding at Airbnb, but at tax time, you still owe the same amount!  Definitely not worth it unless you actually want residency for other reasons (open a Mexican bank account, buy a car there, live there permanently, etc.)

[Sujey-And-Michael0]

Also Airbnb will not issue you a tax certificate unless you supply an RFC. The have some silly Excel spreadsheet you can download which is useless because it is not an official tax certificate. I’ve gone round and round with Airbnb on this issue. And I only get pre written responses that avoid my question. However VRBO does issue a tax certificate whether you supply an RFC or not. So I have been trying to shift my business more towards VRBO. It’s crazy that Airbnb will not give you an official statement showing the taxes that have been paid. I have asked them many times “how do I know you are actually paying them”   I have asked 8-10 times and never got a response that directly answers my question. I have given up fighting airbnb and trying to get an RFC. I just try to promote VRBO as much as possible and figure I’ll just wait for Mexico to make the process easier. 

[Peter3390]

In my annual earnings report from AirBnB from 2022, there is a line for "Ajustes" (Adjustments). The explanation ("|" for information button) has text that blathers on and on about fees for this and that. However, customer support told me, in writing, that the "Ajustes" number is the total of the taxes withheld, which, at least, is useful for US tax filing.

[Peter3390]

I wish that  could help or, even better, that you could help me. I'm talking with a Mexican accountant about making sure that all of my bases are covered as to Mexican taxes, and SHE doesn't know what "host remitted tax" is. The SuperHost support rep who I spoke with was entirely clueless and was supposed to pass on my question to a specialist, who never responded. I asked in another support thread I was given the usual lame response (below, translated from Spanish) and the usual useless link:

"Host remitted tax is likely to be an amount related to the tax that was due to be refunded to you.
I advise you to consult the case with a local tax consultant who can explain to you in which case you can be refunded tax related money:
Here is a guide to understand how taxes work in Mexico:
https://www.airbnb.es/resources/hosting-homes/a/315"

I've written back and explained that MY (Mexican) ACCOUNTANT is the one  asking WTH this is and why a tax is being paid to me, instead of the government... and that since ABB is the one making the payment, that's who should be explaining it to us.

It's so frustrating when they not only fail to give a straight (or useful) answer but then send links that add nothing to the conversation. And then, "ask somebody down there" what OUR payments mean? Really?

[Bhumika]

Hi @Karen3152 ,

I remember you have a property in Mexico as well! if possible, can you help @Peter3390 with this specific concern if you happen to know about Mexican taxes?

@Peter3390, I am also trying from my side if there can be any assistance with your query.

Meanwhile, please feel free to look into Local Host Clubs near you as well. If you can find other Mexican Hosts who can also perhaps give some advice to you on this?

Can’t find what you’re searching for? start a conversation

[Peter3390]

Hey, @Bhumika. That's very kind of you.

What I don't understand, though, is that many seem to talk about the issue as one about Mexican taxes, when it's AirBnB that sets up this category of "Host Remitted Tax."

Just as every US employer retains certain payroll taxes and income taxes (federal, state, local) if you go to your employer it must explain to you what each category is, since THEY are the ones withholding them. Can you imagine going to payroll and their telling you, "go to a tax accountant to find out?"! Of course not. Payroll withholds the tax, payroll places the category on your pay stub and payroll is who must tell you why they withheld it from your pay.

In this case, AirBnB is PAYING me something. Why, oh why, is AirBnB unwilling and unable to tell me what it is?! It's simply bizarre.

[Karen3152]

Hi Peter. Please see some of my posts regarding this.  There is one post that talks about changing payout methods that looks at this. I find the term “Host Remitted Tax” also very confusing.  If you were to download your Transaction History to. a csv file and open in Excel or Google Sheets, you will see positive and negative numbers in different categories.  I assume this is necessary because AirBnb is responsible for a portion of their profit from the transaction and they have collected some of the taxes from the guest or perhaps cleaning fees are taxed differently, etc.  It will also depend on the fee structure you chose for AirBnb.  

In the example posting I mentioned, you can see how these numbers add up to the percentage amounts AirBnb says they withhold for an individual with an RFC.

[Sujey-And-Michael0]

Yes Airbnb is not much help in explaining the taxes. They do not even give out a monthly statement. Just tell you to download their spreadsheet which is useless, not a legal statement. That is my biggest complaint. 

But if you do not have an RFC number from the SAT in Mexico Airbnb will automatically deduction 20% for income taxes and 16% for VAT. I know it looks like they pay you the VAT but they don’t. They take right back out. If you go to transactions then click on one of them you see “Tax Withholding for Mexico Income”this is the 20% income tax. Then you also see a “Host Remitted Tax” which looks like they pay you but then a “Tax Withholding for Mexico VAT” which is this same amount taken back out. 

If you do not wish to have Airbnb withhold these taxes you must get an RFC from the SAT which is a huge hassle if you do not live there, or firm a Mexican business. You still have to pay the taxes but you pay directly to the SAT every month instead of Airbnb paying them. 

i have no problem with Airbnb paying them after realizing what a mess it is to obtain an RFC but my complaint is that Airbnb will not provide proof/statement that shows they are actually submitting your taxes to the SAT. 

[Karen3152]

Please see my posts about these issues.  You will pay the higher tax rate without an RFC - Mexican tax ID and AirBnb policy is - if you don’t have an RFC, they will collect the VAT from you and not the guest.  If these policies were implemented on you recently, that is because AirBnb has started to implement these policies more forcefully.  It has been coming for a while.  

If you own your property through a Mexican Corporation, you should already have an RFC.  If you own the property through a trust (fideicomiso) or you own it directly, you should. NOT establish a Mexican corporation as it is far more costly all the way around.  I also have a post on how to obtain an RFC without applying for residency, but you need to find a Mexican accountant who is willing to hold Power of Attorney for you to go this route.

[Sujey-And-Michael0]

The tax rate depends on the income. My income puts me at a higher tax rate than the 20% Airbnb automatically withholds. So it is possible to pay more taxes even if you obtain an RFC. 

[Sally853]

Hello @Karen3152 ,  you seem very knowledgeable about MXN income tax & VAT/Lodging Tax. I was wondering if you had any insight into this as Airbnb is so useless after months of calling them we are no further ahead.

We have 5 listings on Airbnb as a rental agent. These were all set up when Airbnb came on the market. They are alll individually owned, & we collect the payouts to one USD account & then remit to our owners. Worked great until the 20% income tax came along. 

Only one of the 5 properties has an RFC which we set up specifically for that listing & the payout is to the owner's MXN bank account. It finally worked after many kicks at the can where the owner wasn't deducted that 20%. However,  despite the RFC being assigned only to that one listing, the other 4 listings are now NOT having the 20% income tax deducted. Sounds great except those non deductions are showing up on the RFC account for the other owner which has nothing to do with him. Facturify is issuing all these invoices to them. 😞  

The other 4 are listed to be paid out to a USD bank account & have no assigned RFC numbers or even US tax numbers.

Further, despite having all the VAT & lodging tax on default (meaning Airbnb remits all those taxes) to the government for all 5 properties, they are now sending us the VAT for each listing as well. 😞

It's a nightmare plain and simple. I'd take a root canal over having to call Airbnb one more time. This is very clear on our end, that Airbnb charges the guest the taxes, & they remit it on our behalf and we don't get sent it. It's an in & out or flow thourgh. Why are we getting tax money with no tax# on file? And the RFC is different than having a US tax# on file which we don't for any of the listings. (Sorry for droning on.) Just hoping you might have some ideas on this?

Thank you!

Sally

[Christina1854]

Hi @Karen3152 

Can you recommend a Mexican Accountant in Cabo?  We are trying to get an RFC and bought a condo in Cabo.  We do not have citizenship.  What is the best route as we have a Fidesimo.

Thank you,

Christina