VAT tax in Mexico

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VAT tax in Mexico

I have 2 separate questions regarding the VAT taxes collected by Airbnb on the rentals of my Mexican property:

 

1) As I host, I must pay VAT tax on the hosting fee which I pay to Airbnb.  I understand and accept that. Airbnb sends me an invoice/receipt which shows the fee and the VAT tax which they charged me.  However, my Mexican accountant just told me that since my RFC number does not appear on this receipt, the receipt will not be accepted by the Mexican tax authorities.  How can I get a receipt with my RFC number on it?

 

2) As a guest, my guests are supposedly charged and pay to Airbnb a 16% VAT tax for Mexico.  My accountant advises me that I should get a print-out of all RFC taxes paid for my property or I will be liable to pay them again when the tax authorities see my income.  How do I get proof of VAT taxes paid on my property rentals?

 

1 Best Answer

I believe your accountant is misinformed. Airbnb and the Mexican tax dept. are co-ordinated on this. Airbnb is submitting the IVA for all bookings to The Mexican tax authority. As in other places where Airbnb collects the VAT, they don't submit it individually for each hosting account- they send a lump sum for all bookings, although I have no idea how often they do that.

 

I've yet to deal with this first hand myself, as my home-share listing has been closed since March due to COVID, but I did submit my RFC# to Airbnb.

@Peter-and-Wendy2

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Interesting!  Thanks for that information.  My MX accountant is insisting that I have the money go into a MX account or I will be taxed double even though I think he's mistaken.  I did receive one payment from Airbnb in December from which there were no deductions except for my host fee and the 16% VAT (IVA) tax on that.  I have given Airbnb my RFC number (I was mistaken in the earlier post where I said I had not; that's VRBO who does not have it yet).

 

My initial concern which precipitated this thread was that if I could not prove that Airbnb passed on the VAT amount that they collect from my guest to the Mexico tax authorities; then the taxman would come after me to pay the guest VAT.  But, if Airbnb already gave me a payout without deducting the rental VAT from me,  I may be needlessly worrying, yes?  I realize that I will owe ISR (income tax) in Mexico for my payout and I'm confident that once I speak to my taxman in the U.S., I will not pay income tax twice on the same payout.

 

Thanks again for your help!

@Sarah977 

@Peter-and-Wendy2 

Mexico and the US and Canada have a tax treaty which prevents double taxation. But that doesn't mean you won't have to pay tax in both countries.

 

The way it works is that if for example you are being taxed 10% on your income in Mexico but are in a 15% tax bracket in the US, the 10% you paid in Mexico would be deducted from your US taxes owing, leaving 5% to be paid there.

Thanks!  Good to know!  Appreciate your follow-up.  What kind of business do you do in MX?

@Sarah977 

@Peter-and-Wendy2  I have an upholstery business. Just me, myself, and I, no employees. I make cushions and covers for built-in concrete benches, chairs, curtains, throw pillows, etc.

 

No one was providing that service in my town when I started 15 years ago, and only in the last 6 months has another guy opened up doing that work, so it has proven to be the right business to have gotten into.

Interesting!  Before retiring to Mexico, I was a retailer in MA and one of our large lines was patio furniture.  We were a huge retailer of Sunbrella fabric and I've had a local tapiceria near me in Zihuatanejo produce some very nice cushions for our outdoor furniture here.  Good niche for you!  Good luck!

@Sarah977 

@Peter-and-Wendy2 Sunbrella is what I mainly work with. Even for indoor cushions because even with ambient light, colors in the strong tropical light will fade, and the humidity tends to make fabrics mildew. Not to mention it holds up so well to ongoing abuse by renters.

 

I order through a distributor in Guadalajara.

How do I find my RFC number?. I just got soaked by Airbnb on getting taxed in the states and now 30% and VAT in Mexico. I may leave Airbnb since it’s hardly worth all the effort I put in for my guests for so little money.

 

@Erin5864  I'm not sure what you mean about how to "find" your RFC number. An RFC is a personal tax number issued by the Mexican tax dept. that you have to apply for. It is only available to Mexican citizens and residents, not those who come to Mexico on a tourist visa.

All interesting, am new to this. especially with this Taxes...so if you have RFC number you file taxes in Mexico then in US.  What form does Airbnb issue to file in US.  Thanks art

@Peter-and-Wendy2 

They will send you a 1099 form to my knowledge.

hello Sarah i have a hose in mexico true Airbnb too and live in USA . but is a very small town ,

so,  i earn very small amount of $$ last year . How much you have to Earn in order for me to do my acienda declaration in Mexico ? because my understand ypu have to make about $3000.000 Pesos about $ 15,000Dlls to do your mexican Incomtax I don't know I 'am new in this please help thanks

Elizabeth 

I got an RFC and I did not open a Mexican bank account.  I am sending the money to the US.  However, you will need a Mexican tax ID (RFC) in order to have taxes that are withheld to be credited to you in the SAT portal.  Your Mexican accountant may have to enter the tax withholding certificate manually into SAT.

Sarah977
Level 10
Sayulita, Mexico

I checked out your listing- it looks great. Can I make a suggestion? When I went to read your entire listing description, I found it daunting to try to read through. Break it up into short paragraphs, not one long half a page paragraph. You have to make things easy for guests to read.

@Peter-and-Wendy2

Thanks for this tip as well!  Just trying to be thorough but I'm usually a man of few words!

@Sarah977 

I also have my RFC number and has been submitted to Airbnb in October 2020. My rental is in Mexico but my address is in the US. Airbnb informed me if I changed my address to Mexico my payout would have to be in Mexico. So for now I’ve just kept my address in the US. I don’t know where to find if my taxes have been paid to the Hacienda (Mexican IRS) by airbnb. And now they’re asking me for US tax information. Any ideas? I have talked to several people with Airbnb all with different answers. So frustrating!