What has changed in Mexico?
Starting June 1st. 2020 AirBnB will withhold taxes for individuals registered as Hosts for their income in their technological platform.
These taxes are not new in Mexico, they are the same taxes taxpayers pay in brick and mortar stores. Government did not have control of the amounts declared by Individuals so they designated technological platforms as withholding agents.
This is a recommendation of the OECD and the G20 and not as an initiative of the government itself or the Legislative power.
Who does it affect?
Platforms, Hosts and Guests.
There is a new section in the law specially for tax payments generated through technological platforms. There is no change in the law regarding companies, this is only for individuals.
Legal reference: Section III of the Income Tax Law; Ley del Impuesto sobre la Renta and Chapter II Bis of the Value Added Tax Law; Ley del Impuesto sobre la Renta.
Who is involved?
- AirBnB. Who is now a withholding agent and must pay hosts taxes to the tax authority SAT.
- The Host. Whose taxes will be withheld. All hosts in Mexico will need to register for tax purposes for the RFC Id. with the tax authority SAT.
- The Guest. Who will pay the Value Added Tax; Iva and will be able to request an Invoice for tax purposes; this is called CFDI. This will benefit mexican Business travelers mainly since it will be a deductible expense.
What is a CFDI?
A CFDI is an Internet verified Invoice needed for tax purposes. It is an .xml file that usually comes with a .pdf file for easy visualization. It has embedded a security and verification code.
How Will this affect hosts?
- Hosts will need to have an RFC Id. from the SAT. In case they already have one they need to update the new activity as perceiving income through technological platforms.
- They must issue a CDFI at the request of their Guests .
- They must file taxes monthly and annualy according the the Ley del Iva and Ley del Impuesto sobre la Renta.
How does this affect AirBnB?
Starting June 1st. 2020 AirBnB is a tax witholding agent.
Amongst It’s mai obligations are to:
- Issue a CFDI to the Host with a tax breakdown.
- International Hosts without a permanent address in Mexico will be withheld 16% IVA and 20% ISR.
- The platform will have the obligation to present the list of clients with whom they did Operations every month.
- Pay the taxes witheld at the lates ton the 17th. of the following month.
- Keep the Reciepts of the amonuts witheld.
How does this affect Guests?
- Guests will now pay taxes as they do when staying at a hotel.
- They can request a CFDI Invoice to the Host for tax purposes.
How much Income Tax; ISR do Hosts pay?
AirBnB will withold Income Tax; ISR according to the following brackets:
|Income of the Month MX pesos||Tax Rate (%)|
|Up to $ 5,000.00||2|
|Up to $15,000.00||3|
|Up to $35,000.00||5|
|More than $35,000.00||10|
How much Value Added Tax; IVA do Hosts pay?
Individual taxpayers with income up to $ 300 thousand MX pesos in the previous year through technological platforms that do not have any other source of income with the exception of salaries or interests from their investments can opt to consider these withholdings as final with no further obligation to file taxes. Once their income is more tan $300 thousand MX pesos they will have to file taxes.
Should Hosts issue a CFDI Invoice to Guests?
Hosts must issue a CFDI Invoice to Guests upon request in .xml and .pdf format to an e-mail address. The CFDI must have the tax stated separately.
What do I do if I am an International Host?
After Pre-registering for the RFC Id., in the web portal of the Servicio de Administración tributaria (SAT), It is necessary to book an appointment, you will need an address in Mexico. Then you will be assigned an RFC Id.
NOW YOU KNOW THE IMPORTANCE OF THEW RFC Id. FOR TAX PURPOSES IN MEXICO
DO YOU NEED AN ACCOUNTANT?
Check or special prices for AirBnB Hosts.
Registration / Update of tax obligations.
- $152 USD single payment
Prices include VAT/IVA
- Up to five CFDI’s a month $ 21 USD
- Up to fifteen CFDI’s a month $ 32 USD
- CFDI unlimited $ 44 USD
Prices include VAT/IVA
Monthly Tax Preparation for Airbnb Host
accounting + taxes + CFDI
$ 132 USD
Up to three properties
$ 201 USD
Up to five properties
$ 250 USD
- Prices include VAT/IVA
- More than 6 properties? Contact us for a quotation
- Doing more business in Mexico? Include everything for a special price in your tax preparation and filing service.
Register and we will keep you updated with the modifications in procedures and relevant news.
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