Taxes (Mexico)

[Sujey-And-Michael0]

Airbnb is withholding 16% VAT and 20% ISR (income tax). The amounts they withhold lessen if I provide an RFC (Mexican tax ID number). However, obtaining an RFC is not easy and some don't qualify. I am ok with the withholding (I don't really have a choice) but all I ask for is documentation (tax certificate) showing the taxes that are being withheld are being submitted to the proper tax authority (SAT). I have good reason to believe Airbnb is just pocketing this money. They have finally told me (after talking to 6 different reps) that they do not provide any documentation. It seems highly illegal to withhold money for tax purposes but not show the taxes are being paid. I will now get double taxed as I cannot prove to the IRS I already paid income taxes on the earned money. VRBO provides a tax certificate each month even without providing an RFC, not sure why Airbnb does not. Anyone else have this problem? I preferred Airbnb over VRBO and 80% of my business is from Airbnb but I think it's time to make the transition to VRBO (only problem is VRBO is not as popular in Mexico).

[Omar202]

Hi @Sujey-And-Michael0 thanks sharing your message in the CC.

I fully understand things are not easy when dealing with taxes in Mexico.

Airbnb Mexico created a Tax Resource Center for non-residents, I hope the information contained in this site can help you out to figure the best way to proceed and receive your tax withholding certificate.

https://nonresidents.recursosfiscalesairbnb.com/

Airbnb Mexico mentioned that they are planning a tax webinar in English for Hosts like you that have properties on Airbnb in Mexico, as soon as I know the date when this is planned to be held I will let you know.

Best,

Omar

[Sujey-And-Michael0]

I understand the tax implications. However, whether I have an RFC or not Airbnb still must provide me documentation or a tax certificate showing my taxes have been paid/submitted. VRBO provides this to me every month. That is all I’m asking. I need proof Airbnb is actually submitting the money they are withholding and it is being submitted to the proper tax authorities. If they cannot provide this info then they cannot legally withhold income taxes from me. Also without this documentation I will be subjected to double taxation at the end of the year. Airbnb will 1099 me and report my earring to the IRS and I will have to pay taxes again on my income as I do not have documentation showing taxes were already paid the the SAT. Like I said VRBO provides me this info without an RFC. What Airbnb is doing is illegal. I have reached out to the CEO but I don’t expect a response. The higher ups never response until it becomes a legal issue which is the next step unfortunately. 

[Sujey-And-Michael0]

Omar? You still there? Were you aware Airbnb must give documentation if they are going to withhold taxes. It doesn’t matter if I have an RFC or not. Not everyone can get an RFC, Mexico makes the process extremely difficult. But no matter, Airbnb cannot withhold money from me for tax purposes without documentation on the submission of the monies they are withholding. Airbnb will not even tell me where the money is going. To the SAT?? To the IRS?? Directly into Airbnb’s pocket?? Nobody seems to know.  And this is a huge legal problem and it puts hosts like me in a situation where we will be double taxed. Again, VRBO provides documentation every month even if a host doesn’t have an RFC (like me). 

[Omar202]

Hi @Sujey-And-Michael0 

I wish I would be able to support you but unfortunately I'm not an expert on taxes for non-residents/citizens, the objective with my first response was to provide you with the official source of information created by Airbnb Mexico that you may want to use as reference:

https://nonresidents.recursosfiscalesairbnb.com/

In fact, Airbnb Mexico is recommending a couple of Tax Consultancy Companies that would be able to help you with this process (located at the bottom of the landing page), I believe these companies should be able to clarify how taxes are withheld in Mexico for non-residents/citizens with or without RFC, I think it's worth to contact them since every case is different and particular like yours with Airbnb.

Hope this helps & Happy Hosting!

Best,

Omar

[Sujey-And-Michael0]

Thanks for the info Omar but I already have an accountant in Mexico with Mextax and a lawyer at Mexlaw. I understand very well how the tax system works. My complaint is with Airbnb. Airbnb is the entity withholding my taxes (presumably they are submitting these taxes to the SAT, but how would I know). But if Airbnb withholds income tax from me they are required to supply me with a tax certificate or documentation or whatever you want to call it. This is required whether the host has an RFC or not. Because at the end of the year Airbnb will send me a 1099  and I have to report those earnings to the IRS. I can deduct the taxes already withheld that were paid to the SAT but I need documentation showing these taxes were paid. Otherwise I would then need to pay the full amount to the IRS on top of the 20% Airbnb has already withheld. It’s not worth it for any host to do this. Luckily VRBO does provide this info so sounds like it’s better for hosts in Mexico that reside in the US to only use VRBO. 

[Sujey-And-Michael0]

Here is an example (I blacked out some of the personal info) of what VRBO sends out every month. This is what Airbnb is required to do if they are withholding taxes whether a host provides an RFC or not. But Airbnb is not doing this, at least not with me. 

[Omar202]

Hi @Sujey-And-Michael0 

I hope this message finds you very well!

As previously mentioned and promised please find below the registration link for a webinar to be held next Thursday, Apr 21st , 2022 12:00 PM (Mexico City, local time) regarding taxes for non residents, this is going to be provided in English.

This event is being organized by Airbnb Mexico:

https://airbnb.zoom.us/webinar/register/WN_QxihPwn1QIuw1GrGWdse9A

Dear @Sergi and @Laura I think it’s is really worth to share and broadcast this webinar on the EN and SP CC for our Host Community members who are non residents with listings in Mexico 😊🇲🇽

Best,

Omar

[Sergi]

Good point @Omar202. Also, as soon as the video is available, if there is a video, we will make a post with the link to it in the Spanish speaker CC .😊

[Sarah977]

@Sujey-And-Michael0  "Not everyone can get an RFC, Mexico makes the process extremely difficult."

Mexico does not make the process extremely difficult. You just can't get an RFC if you are not a citizen or resident. Those who enter Mexico as tourists can't get them, anymore than a tourist to the US would be eligible for a Social Security number.

That's pretty normal for any country, as far as I'm aware. 

As a Mexican resident, it's super simple to get an RFC.

But I agree that Airbnb is not at all easy to deal with as far as getting information about these taxes. As far as who they are supposedly submitting them to, it would be the Mexican tax dept., SAT.

[Sujey-And-Michael0]

Actually you don’t need resident status to get an RFC as a foreigner. You can form a business or hire a Mexican legal representative (accountant) to obtain an RFC but the process takes a while and is very difficult. I know cuz I’m in the middle of doing it. And in the US it is very easy to apply for a ITIN as a foreigner. 

Also I know the SAT would be the proper tax authority, but I’m asking Airbnb who they are submitting these tax withholdings to because there is no evidence they have submitted my withholdings to the SAT. I have good reason to believe they are not doing so. 

Vrbo sends a tax statement out every month showing the amount of ISR and VAT submitted to the SAT. They do this no matter you have an RFC or not. I would post an example here but I don’t want my personal info on display. 

i don’t care if Airbnb withholds the taxes I just want documentation/statement  showing the money has been submitted and to who. Otherwise I have no proof my taxes were paid and I’d be in a position of being double taxed. 

[Laura-Lynn1]

@Sujey-And-Michael0  Hi I am a host in Mexico and a US person and Mexico Resident.  Airbnb has the same Facturify document as you posted above from VRBO.  

Although I believe they emailed a link to get set up with them when I signed up to host... so maybe that is what you are missing? They have the information.

I'm trying to find information on if the VAT paid has to be included in Gross earnings on US taxes.

[Sujey-And-Michael0]

But Laura if you have resident status then you probably have an RFC. Is this correct? Airbnb told me they issue the tax statement to people but only if that person provides an RFC. My complaint is that whether I have an RFC or not if Airbnb withholds income taxes from me then legally they must provide me a tax statement like I receive from VRBO.

[Sujey-And-Michael0]

Am I correct Laura? You have an RFC number correct?? If so your situation is different. If not please inform me of this link. Hopefully that’s what I’m missing but I’ve talked to 8 Airbnb reps and not one has ever mentioned this link. 

Anyways I think I need to take legal action because everyone at Airbnb either side steps this issue or just ignores. Really frustrating that Airbnb will not provide me with a simple tax statement in which they are legally required to do.