Unless you enter the business world, the most common Mexico tax issues you will encounter are:
- Income Tax (only if you work in Mexico)
- IVA (Value Added Tax) (usually already factured into the price of things)
- Property Tax (so low it is a pleasure to pay)
- Real Estate Tax (Buying or Selling) (more of a transfer tax to the government for changing the title - similar to north of the border)
- Capital Gains Tax (exempt every five years with Residente Permanente)
- Rental Income Tax (at least in theory)
If you work in Mexico you will not file Income Tax. The company you work for is obligated to withhold tax and submit to the government. If you are an Independent Contractor, then you would pay taxes directly to the government. Having a good accountant is essential as the tax rules can be a little convoluted.
There is no tax on money foreigners bring into Mexico. The Mexican government is pro-active to invite foreign investments into Mexico.
Mexico has a Tax Treaty with Canada, whereby if a Canadian decides to be a resident of Mexico and becomes a Non-Resident of Canada for Tax Purposes, there is only a 15% withholding tax back in Canada on pensions etc. For Canadians in a higer tax bracket, this could be a substancial savings, enough to pay for your home in Mexico over time. We devote a seminar to this very important topic during the Focus Learning Adventure program.
Sorry Americans, there is no such option in the U.S. to become non-resident and reduce your tax obligations. However, we also have a seminar regarding Taxes for Americans living in Mexico. This talk is essential as many Americans living here are not aware of recent changes in reporting re U.S. taxes that, if not followed, could lead to substantial fines from the American government and even jail time (in the U.S.) for non compliance; pretty serious stuff.
Our experts are top in their field and current in their information. They also graciously offer our clients a Free Consultation, one on one, after the program (by phone or email or sometimes in person here in Lake Chapala).
There is lots to know when you become an expat in a foreign country and with the information you'll learn on the Focus program, you will be armed with the knowledge to make informed decisions and stay out of trouble.
You’ll also learn the reality and common practices for everyday living here, which, you will find, can be quite different from the actual written 'rules'. We cannot emphasize enough the importance of taking the Focus on Mexico Learning Adventure Program. In addition to all the knowledge and contacts, you'll have a lot of fun in the process.