How to obtain Mexican Tax ID (RFC) Without Applying for Residency

[Karen3152]

Foreigners who earn income in Mexico may apply for a foreigner RFC without applying for residency.  

You need to find a facilitator or Mexican accountant who understands this process and won’t tell you that you must apply for residency.  This link to Mexican tax authority (SAT) says it is possible: **

You need to this soon after you purchase your property because you need to be able to obtain the electronic invoices (facturas) that will allow you to write off expenses that will reduce your capital gains  when you go to sell your property.  I know of people who are selling their condos because AirBnb recently started withholding 20% for income tax because they don’t have an RFC.  If you have a personal RFC, the rate is 4%.

I would like to hear from someone who has obtained an RFC through this process.  It should be considerably less than the residency process.  

**[Broken link removed by Community Manager] 

[Karen3152]

Mexico’s government website on the different methods to obtain an RFC:

https://www.gob.mx/cms/uploads/attachment/file/204332/Inscription_at_the_Federal_Taxpayer_Registry.....

[Marcela507]

@Karen3152 Have you done that? We have an Airbnb in Mexico and haven’t been able to obtain the RFC. The SAT officers told us we should have an immigration document (residency) in order to get the RFC, and the 20% withholding is killing us ! Please advice. Thank you so much 🙏🏻

[Keith861]

Any luck in your pursuit? @Karen3152 

[Karen3152]

@Keith861 I did not go this route. So I would have no way of knowing

[Karen3152]

@Marcela507 You would need to find an expert who knows how to do this. As I got residency in order to get an RFC

[Zora202]

@Karen3152 , thank you for explaining! 

We got the RFC but we didn't know that we have to submitt taxes every month. The tax accountant wants to charge us $130usd per month even though he will submit '0' for most months. We had only one booking last year and his fee is more than the total income received . What is a reasonable price for tax accountant in Mexico. Our property is in Cabo, BCS. We have unlisted our property  until we figure out what to do. 

[Kerry524]

Hi Zora202, I just reviewed your reply to Karen3152 in February and hoped to learn more from your experience. I am similarly motivated to get an RFC with hopes of reducing the Mexico tax bite (Income Tax and VAT) when renting our Mexican condo. (Note: we live and pay taxes in the US - likewise we would only be offering to rent the condo out once or twice a year.) I have not consulted with a Mexican accountant and have always wondered what possible down side there may be to us if we obtain the RFC. So, hoping to understand - you were faced with paying taxes every month? And, understandably, to manage such a new obligation properly, felt a (Mexican) tax accountant was prudent? I see these both as huge red flags and definitely qualify as ‘down side.’ I would really appreciate any response. Let me know if easier to discuss by phone. Thanks so much. Kerry Gray

[Paula]

Hi @Kerry524, I am tagging @Zora202 here so they receive a notification of your message. This way, we increase the chances of them getting back to us.

Quick tip: To tag someone, tap "@" and select the host's username from the dropdown menu 😊

[Milan247]

Hi @Karen3152 

I am just finding your article and found it to be very helpful. I'm about to close on a property in Mexico. May I ask what is the difference between a personal RFC and foreign RFC? Will I get the 4% tax rate with the foreign RFC?

[Karen3152]

@Milan247 The foreign RFC is a generic RFC number that a vendor uses when a person they sell to does not have their own RFC because the vendor must report the taxes they collect to the Mexican government electronically.  If you receive a factura using generic (foreign) RFC, you will not get the tax write-off because the factura will not come to the government under your name.  You also cannot upload the generic foreign RFC number to AirBnb and get the 4% withholding.  You have to have an RFC under your name.

[Milan247]

Thank you so much, @Karen3152 , for your reply. Incredibly helpful! 

Do you think it is better to apply for temporary residency and get a personal RFC? I do plan to stay at my property maybe at least a month in the year. But then again, it seems like a pain having to pay taxes in both Mexico and the U.S.

[Karen3152]

You have to be retired to go straight to permanent residency.  I got a very nice write-off and refund of over $2k on my US taxes and a nice refund of over $12,000 pesos from the Mexican government this year.  HOA fees, property management and having to pay a Mexican accountant really piled up the write-offs. So for me, it is advantageous to declare in both countries.  The difference in Mexico though - you need those facturas in order to get the write-offs.

[Gabriela1681]

Hello Karen 

I was born and raised in Mexico, I have my curp and I believe my RFC, I just don't know where it is, I became American citizen 16 yrs. ago and just recently I been looking into buying a property in Mexico, and to rent it.

My question is, the taxes that Airbnb is retaining when people book the properties how much is and where the money go? Mexico or USA? and do you have to double pay taxes in USA and in Mexico too.  I found your articles very helpful, thank you so much for taking your time and responding to other people questions

Best Regards