Friday, July 8, 2016
Wednesday, July 6, 2016
Under Mexican law, all income generated from properties located within Mexican territory is subject to taxation, even if the owners are foreigners and even if all funds are collected in accounts located outside Mexico. For many years it has been a major issue for both Mexican tax authorities and individuals attempting to comply. For years a Federal Taxpayer ID was required to file and pay the tax. In order to obtain this tax ID one needed to be a resident of Mexico. This was lose-lose for both the authorities and the foreigners who were willing to pay but baffled by the issues involved to “get legitimate”.
After more than five years of Settlement Company® dialogue with Mexican tax officials, a resolution was made in which the foreign property owner could appoint a Mexican company to pay his or her taxes and dispense with all other formalities. This has become reality! Mexican authorities are now looking seriously to collect this long-neglected source of tax revenue and foreigners not only are lining up to pay but also to receive the receipts for payment of the taxes which can then be credited against taxes paid in their native country under the terms of the NAFTA treaty. Remember! no double taxation is permitted under the terms of the treaty!
If you have a rental property in Mexico contact us for details. email@example.com
Wednesday, June 8, 2016
Yes, the Fideicomiso to hold property in the restricted zone of Mexico is both a contract with the Mexican bank to hold your title as trustee, and also is the deed to your rights in the property.
Yes. Definitely failure to pay taxes on income is a violation of the Mexican law and property can be attached and sold as payment for past due taxes after a procedure similar to those used by the US and Canada tax authorities. To date the Mexican tax authorities have not aggressively pursued violators, but this is changing as they have access to internet and rental promotion programs.
Wednesday, May 11, 2016
Mexico Rental Property Owners Must Pay Mexican Taxes
John K. Glaab - The Settlement Company
May 6, 2016
La Paz, BCS - Mexican newspapers are full of headlines about the growing problem of foreigners who are renting their homes or condominiums and failing to pay Mexican taxes. Not only is this a violation of the terms of most bank trusts (Fideicomisos), but also it is a violation of Mexican tax law and reprisals are severe.
If you own rental property anywhere in Mexico you are required to pay the following Mexican taxes:
• Mexico Income Tax
• Mexico Value Added Taxes - IVA (16%) - if the unit is furnished
IVA is paid by tenant but collected and declared by the owner.
Many non-residents of Mexico have never paid any taxes on their rental income from properties owned in Mexico. This is a violation of Mexican tax law. The Mexico tax code clearly states that these Mexican taxes must be paid on rental income from apartments, houses, and commercial property. Failure to do so can result (and has resulted) in substantial penalties and legal problems with the Mexican tax authorities.
It is now easy for you to pay these taxes and avoid problems - even if you do not have a Mexican tax identification number. The Settlement Company® has developed a simple and easy procedure which will allow you to be tax compliant on your rental income. You do not have to suffer the consequences of failing to pay. Email or call us now at 52-612-123-5056 Ext 0 to learn more and to get started.
The Good News: The IVA you pay in Mexico is deductible on your US tax return and the income taxes you pay in Mexico can offset your US taxes on the same income dollar for dollar. You will not be double taxed.
For additional information, please email us at rentaltaxmexico(at)