Are you renting out properties? This information could be of your interest.
The management of vacation rentals through digital platforms has become increasingly important in recent years. In accordance with the updated Article 113-A of the Income Tax Law, digital platforms are now required to withhold income tax (ISR) from hosts.
Additionally, there is a new scheme in place where foreign companies providing digital services to users in Mexico through applications are obligated to pay Value Added Tax (IVA) for their services. The SAT (Tax Administration Service) has released a list of companies that must comply with this IVA requirement in Mexico.
If you have your RFC (Federal Taxpayer Registry) and have registered under the digital platforms regime, your withholdings will be 4% for ISR and 8% for IVA. These amounts can be credited in your provisional tax returns or, in some cases, they may be considered final. However, if you do not have an RFC, the withholding rates will be 20% for ISR and 16% for IVA.
If you would like to go deeper into this topic, or explore how we can assist you further, please don’t hesitate to contact us!
