Vacation rentals through digital platforms.
As of June 1st 2020, a new scheme came into effect in Mexico, in which individuals who provide rentals services in Mexico through digital platforms (such as Airbnb & VRBO) are required to pay taxes for this kind of activity.
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Do you know what your current tax situation is in Mexico?
If you are an individual or a corporation who owns a property in Mexico and you rent your property through digital platforms, you have to pay taxes in Mexico.
There are three ways to pay your taxes depending on your tax situation in Mexico:
- Do you have a Mexican Tax ID?
- Do you know which is the best option to pay your taxes in Mexico?
- If you are an individual without a Mexican Tax ID (RFC) – In this case, the platform will withhold 20% income tax as a final payment and you will be unable to apply any deductions.
- If you are an individual with Mexican Tax ID (RFC) – In this case, the platform will withhold 4% income tax as a provisional income tax payment and you can then apply deductions related to the operation of the business. At the end of the year you must make an annual calculation by subtracting the deductions from your income and provisional income tax payments that have been made during the year. You will either then be required to pay the difference, or you will receive a credit in you favor.
- If you own the property through a Mexican Corporation – In this case, the platform will only withhold 3% lodging tax and the remaining will be provided to you in order for your accountant to report directly to the tax office.
We can help you with your taxes in Mexico.
At Iniestra and Associates Attorneys and Accountants, we can provide you with the necessary information that will allow you to make the best decision regarding the way you should pay your taxes.
For more information contact us by this means or at the following phone number: (+52) 998 24 28 832 or alternatively via email at firstname.lastname@example.org
Learn more about us 👉 here.