PAYMENT OF TAXES FOR NONRESIDENTS OF MEXICO ON THEIR MEXICO RENTAL INCOME- HOW THE PROCESS WORKS WHEN YOU USE THE SETTLEMENT COMPANY.
According to a new resolution issued on February 15, 2010 by SAT, the fiscal arm of the Mexican government, foreigners renting properties can pay taxes with no RFC and no FM3 providing they do so through a Mexican company or individual.
Since it is a payment of tax, not a retention, no annual filing is due. IVA and the 3% tax must be collected from the tenant and can be paid by the company paying the foreigner’s tax and filing the declaration.
The foreigner does however receive proof of payment of taxes for use in tax declarations in
his/her native country.
Example: 1,000.00 USD gross income
250.00 USD. 25% ISR tax
750.00 USD after tax income
The Settlement Company® is able to assist you in paying taxes on your rental income. In order to do so, we must receive the following:
1. Appointment of Consultores Phoenix, S.C. (The Settlement Company®) as your legal representative for the payment of taxes. We will prepare this document for you, in English and in Spanish. This must be signed before a Notary Public and an Apostille obtained or the document legalized before the Mexican consulate. It can also be obtained through a Mexican Notary Public if you are in Mexico. We will prepare the instructions for the Notary to prepare this document.
2. Tax Payment Instructions authorizing The Settlement Company® to collect and pay out rental income on your behalf, delivering audited statements and funds to you. This document is also prepared by us and will need to be initialed on each page and signed on the last page.
3. An original of your latest property tax receipt, including property tax number.
4. A copy of the deed to your property.
5. A copy of your passport.
6. The information sheet and authorization, attached.
Payment of taxes on rental income under this program is in strict compliance with Mexican law and will provide you with legitimate receipts for filings in your native country, to avoid double taxation.
No RFC, nor special immigration status is required to comply with Mexican laws under this program;
Properties owned in Limited Liability Companies (LLC) and other foreign entities are eligible for the program;
Upon receipt of your information, we prepare your documents. Once executed and returned to us, we can establish your individual custodial account and are able to receive and pay out funds.
Once we start with the process, we will prepare declarations of income for federal, state and municipal taxes and will pay them from the funds in your rental account, providing you with e-mail copies (PDF file) of your receipts, for use in your tax declarations in your native country.