Property in Mexico, owner not a Mexican resident, no RFC, what happens, how to handle?

Berlin, Germany
Level 2

Dear community, 


I own and run (together with my sister as a co-host living on site) two houses in Mexico (in Nayarit, if it matters). As of October 1, a new tax regulation is in place. Airbnb withholds taxes and transfers the money to the Mexican tax administration, and transmits information on the respective income to that same institution. So far, so good. However, in order to pay taxes in Mexico, one needs a tax payer's number, called RFC. Airbnb asks hosts to provide that number, together with a citizen’s identification number (CURP). The problem is that without Mexican citizenship or at least permanent residency, there is no way to obtain CURP or RFC. What now? I asked airbnb about this repeatedly, and am provided with contradictory information, none of wich is backed up by accessible and official documents:


airbnb withholds 20% IT (+16% VAT) if not providing a valid RFC regardless of your resident status


airbnb does NOT withhold 20% IT if the owner is not a Mexican resident.


Even if the latter is true, airbnb still has to provide income information to the local tax authorities. If they do so, those tax authorities will know that I don’t pay IT (because I can’t, without an RFC)—and then what? Then nothing because foreigners don’t have to pay IT and that’s it? Or will they sue me for not paying taxes?


There are many properties in Mexico owned by foreigners (US citizens mostly, but not only), and I know many of them simply quit airbnb because they don’t know how else to deal with the situation. Certainly no desirable outcome for anybody.


Does anybody have any reliable information on the matter?



1 Reply

Re: Property in Mexico, owner not a Mexican resident, no RFC, what happens, how to handle?

Richmond, ME
Level 4

AirBnB can't give you an answer regarding Mexico laws/tax information; they are a third party. I would go to the town or a similar IRS in Mexico and ask them how to go about this and how to retain proper identification numbers. 

I do shows in Canada and I had to get proper ID for my business before crossing the boarder to sell goods. I called their IRS and they helped me out step by step. Hopefully Mexico has something similar and can help you out - if not - I would call your tax accountant or attorney to help you out. 

Hope this helps, Good Luck!

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