registering for mexican VAT

[Michael1308]

i do not live in mexico and do not have mexican ID. so there is not a method to apply for the RFC or the CURP. I may be able to do this if and when i can travel to mexico. Currently that is not possible.

anyone have a work around?

[Sarah977]

  You cannot get an RFC or CURP unless you are a Mexican citizen, or a temporary or permanent resident. And you aren't legally allowed to earn money in Mexico (doesn't matter if you get paid into a non-Mexican account) without paying taxes, so if you have been coming down o a tourist visa, technically your Airbnb in Mexico has been an illegal operation. Many people have been operating under the radar like this for years, but that's all going to end now with them taking Mex. taxes out of your payments. 

You won't be able to get an RFC or CURP when you come to Mexico either, unless you are a resident with permission to work. And you can only apply for residency at a Mexican consulate outside of Mexico. So it's all a rather involved process.

From my understanding of all the info I read on this on the Airbnb site is that if you don't submit a RFC umber, Airbnb will just deduct a flat 20% from your bookings, but don't quote me o that- it's was just what I understood from the extensive info I read.

@Michael1308

[Michael1308]

Thank you for taking the time to respond. 
be kind, be calm and keep safe.

[Anne9667]

I DO have an RFC number, and reported it to Airbnb, but would like to switch back to US income. Does anyone know how to do that???

[Anne9667]

Just an fyi, if you report your income as Mexican, you have to do taxes in Mexico and finding a CPA down there is not easy. I thought I would use my deductions ( after Airbnb takes the 20%) & use it against my US income.

[Sarah977]

@Anne9667  If you have a rental in Mexico, regardless of whether you live in the US or anywhere else, and regardless of where you are a citizen, it is illegal not to report and pay the required taxes on it in Mexico. 

Failing to do so could result in your property being confiscated and you not being allowed to enter Mexico again.

You need to find a Mexican accountant.

 There are lots of them, I don't know why you think they are hard to find.

[Anne9667]

No, Im sure there are plenty of accountants. Ive meet with one already. My issue is I would rather report my income in the US & I dont know how to remove my RFC number on Airbnb....do you know how??

[Sarah977]

@Anne9667  You seem not to have understood at all what I told you.

You do not have a "choice" regarding reporting and paying taxes on your Mexican listing's income to the Mexican tax bureau. Not reporting and paying the required taxes is illegal in Mexico. You are earning income on a Mexican property and you must pay taxes in Mexico.

And if you are a US citizen or resident, you also have to report that income to the IRS. But Mexico and the US have a tax treaty which prevents double taxation, so whatever you paid in taxes in Mexico will be deducted from the taxes you owe in the US.

[Anne9667]

What about all those folks that own property in Mexico, but dont have an RFC number?? How would the Mexican government even know they own property there?? Who would even report the rental income without that number??

[Sarah977]

@Anne9667  Airbnb is reporting all their listings to the Mexican tax authority.

There is nothing illegal about simply owning property in Mexico for one's own use without a tax number, but earning income on it is quite different.

And do you think the Mexican tax folks are stupid? They can find all the listings in Mexico just by looking at the Airbnb site.

As far as how someone with only a tourist visa gets an RFC to report the income, it is also illegal for you to be earning income in Mexico without permission from Immigration to do so, either in the form of a temporary residency with permission to work, or permanent residency, as far as I'm aware. So you are also running afoul of Immigration law. But it's something to ask a Mexican accountant about. Maybe there are workarounds.

[Anne9667]

I Already have my temporary residency - my accountant helped me down there. I guess I thought you could report it either to US OR Mexico....but I guess not.

[Sarah977]

@Anne9667 Right, it has to be reported in both countries. 

But the Mexican tax bureau just changed the laws regarding income property and it's much better for hosts. You can no longer claim deductions for expenses, but instead of all the various taxes they applied to rentals before, it is now just a straight across 4% plus IVA. You can deduct the IVA you paid on expenses with official facturas, but you can't deduct the cost of the expenses themselves.

A Mexican accountant will know all this.

However, because you can deduct the taxes you pay in Mexico from the US taxes you'll owe, you won't be paying more in total than if you only had to report the income in the US.

And I think you can deduct all the expenses on your US taxes, so that should lower your US taxes as well.

[Natalie278]

Hello, I have a question about the IVA.

My understanding is that AIrbnb will remit 8% directly to SAT and the other 8% is remitted to the host. The host is then responsible to remit those funds to SAT?  Is this correct?

[Woody10]

Where can we find more info on the 4% plus IVA option. @Woody10 

[Anne9667]

Thank you for all this!!