paying taxes on rental income -

Making life easier!

By Linda neil jones, settlement company

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 overage and the documents you require in your country of residence to avoid double taxAdditionally...........as part of its service,  if requested, they your annual property taxes  and, if your property is in trust (fideicomiso) bank trustee fees!  They can also pay other property related expenses, at your request!  

 
For further information, please contact;  info@settlement-co.com

 

Copyright September 2004, Consultores Phoenix, S.C., reproduction prohibited without permission.                             
This article is provided by The Settlement Company, the first escrow company in Mexico, and is dedicated to processing the trusts and title transfers of Mexican real estate for foreign buyers and sellers for properties located anywhere in Mexico.  The company frequently sponsors seminars on the various aspects of real estate ownership in Mexico and holds membership in AMPI, NAR and FIABCI and PROFECO Certificate 00063/96 E-Mail: info@settlement-co.com Web Site: http://www.settlement-co.com