PAYING TAXES ON INCOME ON RENTALS



  • Add Comments
  • Print
  • Add to Favorites

By Linda Neil

MAKE LIFE SIMPLER.  DON’T SPEND IT WORRYING ABOUT COMPLIANCE.

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.

FOREIGNERS ARE OBLIGATED TO PAY TAXES ON INCOME GENERATED IN MEXICO.  Mexico’s tax law is patterned after those of the United States and Canada (world rental system) which states in the First Article:

Article One: Physical persons (individuals) and legal persons (companies) are obligated to pay an income tax in the following cases:

I           Residents of Mexico, must report and pay on all income no matter where the source is located;

II.          Those with residence in a foreign country with a permanent establishment in Mexico must report and pay on all income generated from the permanent establishment in Mexico.

III.        Those with residence in a foreign country, must report and pay on the income produced by property located in the national territory, when there is no permanent establishment in the country or, even if there is, but not covered by the situations outlined in I and II above.

If you own a property in Mexico and rent it often or only occasionally, ENJOY your rental income and SLEEP EASILY KNOWING YOU HAVE COMPLIED WITH TAX LAWS!

The Settlement Company® with many years of experience in the transfer of titles and resolution of problems related to title, is now able to assist you in receiving your funds in an escrow account, complying with your fiscal obligations in Mexico, and providing you with the coverage and the documents you require in your country of residence to avoid double taxation!

Additionally………..as part of our service, if requested, we pay your annual property taxes and, if your property is in trust (fideicomiso) bank trustee fees. We also can pay other property related expenses, at your request.   We are able to provide you with a limited or a complete accounting service, based upon your requirements.

For further information on this program, please contact The Settlement Company® at quirino.parra@settlement-co.com or info@settlement-co.com.

add a comment.

Leave a Reply






two + = 3