On January 1, 2014 the Mexican IRS (Hacienda (SAT) has made a lot of changes for property owners who rent their property. In English it is called SMALL BUSINESS TAX STRUCTURE. It is very important to be in compliance with new law. The penalty might be that Hacienda tax you at 35% which is the GENERAL BUSINESS TAX RATE. Also your rental company will not be able to rent your condo if you are not tax compliant.
Here is the highlights:
1.) Property owners must have current immigration papers in order with Immigrations (INM) in Mexico. (Your Permanent Resident or Temporary Card)
2.) Property owners must be registered (by appointment only) with Hacienda and take their TAX ID number (RFC NUMBER) with them. With this new “regimen of corporation” you will be obligated to make Mexican fiscal invoices or have them made for all the income that you will have when you rent your condominium. Hacienda will give you an electronic code on your memory stick, it is called (FIEL). This will allow your accountant to issue invoice (factura) from the rental that you receive from rent. (REMEMBER to take a copy of your property tax, a copy of your electric bill, your passport, your INM Card, and a computer memory stick).
3.) Property owners must open bank accounts (Peso & Dollar) in Mexico, to receive all your income from your rentals, and make all the payments to electric bill, cleaning services, maintenance, property tax, Mexico SAT TAX, etc…this is the only way (electronically) to be able and get deductions from your Mexico SAT TAX.
4.) Property owners must file electronically with Hacienda, their income and expenses with Hacienda. This can be done by yourself (forms are in Spanish only), your rental company, your Mexican accountant, or email LCP Cristian Felix who is English Speaking at email@example.com for an application or information.
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It is suggested that you contact you Rental Company or accountant immediately to learn more about this NEW LAW as this is just a brief overview.
THE GOOD NEWS IS THAT THE TAX RATE FOR 2014 IS -0-
LCP Cristian Félix
MX Cell: 638-113-7457
From USA: 011-521-638-113-7457
USA Line: (602) 464-3365