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Taxes on Rental Income


Sonia
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This is interesting. http://www.banderasnews.com/1709/re-paying-mexico-rental-property-taxes.htm

And a related article: http://www.banderasnews.com/1709/nb-vallarta-property-rental-income-tax.htm

 Your landlord must give you a fiscal receipt or invoice in exchange for the rental payment. A fiscal receipt must show the landlord's full name, fiscal domicile, RFC, the rental property address, your RFC (if you have one, otherwise the generic RFC for "Sales to the General Foreign Public" XEXX010101000 must be used), the rent amount, the period covered by that payment and, if a furnished dwelling, the IVA tax must be disclosed, and the receipt must be duly authorized by the SAT; otherwise it is not a valid fiscal receipt and may mean that the landlord is committing tax fraud, money laundering and other crimes. More here: http://www.soniadiaz.mx/real-estate.html

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8 hours ago, Mainecoons said:

I wonder how many Mexican landlords pay attention to this? :)

 

Or expat landlords. :-)

Or tenants who follow the law when the landlord resides out of Mexico? I bet they have no idea of what is the law regarding withholding tax on their rent and paying it.

This is how I interpret the law but I also post the source: 

Foreign residents (not residing in Mexico) who are landlords etc. subject to tax payment in Mexico generally fulfilll this obligation when the person (tenant, etc) who pays them withholds the tax and pays it to the Tax Administration Service (Servicio de Administración Tributaria). Here are the laws:

Residents in Mexico, or foreign residents with a permanent establishment in Mexico, and who pay foreign residents, are compelled to withhold the tax. When the rent is paid to a trust company / property manager, the fiduciary institution must issue the receipts, withhold and pay the corresponding tax. The tax is 25% that tenant must withhold by law.

The person who withholds the tax must pay monthly, at the latest on the 17th day of the following month to that in which withholding was carried out. If a fiduciary they must pay by 15th of the following month. Payment shall be made through the Internet or at a banking window, according to the person's obligation. Here is the law: http://www.sat.gob.mx/english/Paginas/English/tax_treatment_residents_in_mexico.aspx

 

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  • 2 weeks later...

Foreign residents (not residing in Mexico) who are landlords etc. subject to tax payment in Mexico generally fulfilll this obligation when the person (tenant, etc) who pays them withholds the tax and pays it to the Tax Administration Service (Servicio de Administración Tributaria).

How does a tourist comply with this?  SAT wants electronic filings and payments via electronic transfer and tourists cannot open bank accounts nor have RFC numbers as they dont have CURP numbers. I dont see tourists really being able to comply as Mexico wants to be so high tech they block out any low tech options and therefore lose out on millions of income.  Tourists could report rental income but it is made impossible.  Too many here watching Mission Impossible reruns and not thinking logically. 

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Some folks I know wanted to "do the right thing" and went down to register with SAT so they could pay the required taxes on the Mexican home which they rent out to tourists when they are not here. This couple is in their mid 70's.

They spent about 4 hours in the SAT office (after driving an hour to PV), filling out the paperwork, the wife, whose name they were putting the account in, getting her irises read, etc, etc. When they were almost completed with the process, exhausted and more than ready to go home, it came up in conversation with the agent that the fideicomiso was in both their names, upon which the agent said oh, well, than we have to do all the paperwork over because the account has to be in both your names. They said, we'll make another appointment, and never went back.

If Mexico wants people to comply with tax law, they need to learn not to make everything so convolutedly difficult.

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Not sure why so confusing. Tourists can not be landlords. It is as simple as that. Just as they can not earn income from other sources generated in Mexico. I doubt it is very different in other countries. 

It also makes it easy as a tenant to hold the landlord hostage. 

And, yes tourists open bank accounts all the time.

The comment below is pure silliness.

 

 

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"It also makes it easy as a tenant to hold the landlord hostage."

Be very careful before you decide to hold any landlord "hostage". Hostages have a tendency to strike back in legal and illegal ways. Muscle is very cheap to hire in Mexico.

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On ‎24‎/‎09‎/‎2017 at 3:51 PM, Intercasa said:

Foreign residents (not residing in Mexico) who are landlords etc. subject to tax payment in Mexico generally fulfilll this obligation when the person (tenant, etc) who pays them withholds the tax and pays it to the Tax Administration Service (Servicio de Administración Tributaria).

How does a tourist comply with this?  SAT wants electronic filings and payments via electronic transfer and tourists cannot open bank accounts nor have RFC numbers as they dont have CURP numbers. I dont see tourists really being able to comply as Mexico wants to be so high tech they block out any low tech options and therefore lose out on millions of income.  Tourists could report rental income but it is made impossible.  Too many here watching Mission Impossible reruns and not thinking logically. 

We have 1 furnished apartment and 2 consultorios in medical towers we lease out. The accountant we use charges $300 pesos every 3 months to file everything for us and has access to our SAT account or uses her account in our name, I don´t know, and then sends a SAT document by E-Mail that we print out and take to any bank to pay the IVA and income taxes which are about $2,500 pesos total for 3 months. We send her a copy of the bank rental deposits in a seperate bank account for the 3 rentals. It could be anyone bringing in the payment to a bank and is easy and cheap.

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