Will Mexico make me pay income tax on money I earn outside of Mexico?
Alfonso Galindo - I Go Yucatan
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With regard to Mexican taxes, money not earned in Mexico is tax-free for an expat. So, your retirement account, social security check, all that money you bring into Mexico is 100% tax-free, whether you’re a tourist, a temp resident or a permanent resident. (Home in Merida, Mexico, pictured.)
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With regard to Mexican taxes, money not earned in Mexico is tax-free for an expat. So, your retirement account, social security check, all that money you bring into Mexico is 100% tax-free, whether you’re a tourist, a temp resident or a permanent resident. (Home in Merida, Mexico, pictured.)
Posted September 23, 2015
Don Nelson - TaxMeLess
If you live in Mexico full time as a permanent resident or over 183 days, you owe Mexican tax on your worldwide income. However, in many parts of Mexico the SAT appears lax in enforcing this rule or many residents are just not reporting their worldwide income. You need to check with a local Mexican accountant to find out more how this tax is paid and enforced in the area you intend to live. If you do pay income taxes in Mexico, that tax can be offset dollar...
If you live in Mexico full time as a permanent resident or over 183 days, you owe Mexican tax on your worldwide income. However, in many parts of Mexico the SAT appears lax in enforcing this rule or many residents are just not reporting their worldwide income. You need to check with a local Mexican accountant to find out more how this tax is paid and enforced in the area you intend to live. If you do pay income taxes in Mexico, that tax can be offset dollar for dollar against your US tax on the same item of income, so therefore you do not get double taxed.
(Playa del Carmen beach, Yucatan, Mexico, pictured.)
Posted January 23, 2016
Jesus Celis - RH Fiscalis
If you spend more than 183 days in Mexico, in theory you become a tax resident of Mexico, which means that you must pay your taxes here in Mexico. However, if your country has a tax treaty with Mexico, the tax you pay here can be used as a credit against the tax you would have to pay in your own country. The tax treaty would avoid double taxation on the same money you earn from two different countries. For example, if you are living here in...
If you spend more than 183 days in Mexico, in theory you become a tax resident of Mexico, which means that you must pay your taxes here in Mexico. However, if your country has a tax treaty with Mexico, the tax you pay here can be used as a credit against the tax you would have to pay in your own country. The tax treaty would avoid double taxation on the same money you earn from two different countries. For example, if you are living here in Mexico but the money you make is from the US, you still have to pay taxes in Mexico because you’re living here. That’s what the law says. But many people do not follow that rule because they would prefer to pay their taxes in the States, but that’s wrong. The law says you must accumulate all the income you have if you’re a tax resident in Mexico. However, no one I know has ever been prosecuted in Mexico for living in Mexico, earning money outside of Mexico, and not declaring his or her income to Mexico to be taxed.
When we studied for our master’s degree in taxes, a common situation was discussed whereby a person who is a legal tax resident of Mexico has an Internet business and some of the money that he gets from that business comes from Mexico but the money is paid through PayPal or some corporation which is outside of Mexico. In this situation, he would still be liable to pay taxes in Mexico on this money, but as a practical matter, no one has ever been prosecuted for not paying those taxes. As a practical matter, the authorities in Mexico would not know about these activities, so they haven’t prosecuted anyone for not paying taxes on them.
(White sand beach of Tulum, Mexico, pictured.)
Posted March 24, 2016
SONIA DIAZ - Sonia Diaz
If you are in Mexico and you make money from a source outside of Mexico, there is no need to pay taxes to the Mexican government.
You only pay taxes if you are earning money that comes from Mexico. And, as noted on one of my other answers, you must be registered with SAT for taxes and have the appropriate visa.
If you are in Mexico and you make money from a source outside of Mexico, there is no need to pay taxes to the Mexican government.
You only pay taxes if you are earning money that comes from Mexico. And, as noted on one of my other answers, you must be registered with SAT for taxes and have the appropriate visa.
Posted March 5, 2018