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Gracious

Jan 28, 2016, 1:13 PM

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Tax Filing

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Hi ,
I have temporal resident card in mexico . I DO not draw any salary in Mexico , I get my salary out of USA, From last Jan-2015 to Jan-2016 I have been in Mexico for more than 230 days . Can any one tell me if I am obligated to file Income tax return in mexico ?



rvgringo

Jan 28, 2016, 3:26 PM

Post #2 of 13 (9930 views)

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Re: [Gracious] Tax Filing

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No need to file in Mexico.


Gracious

Jan 29, 2016, 6:28 AM

Post #3 of 13 (9893 views)

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Re: [rvgringo] Tax Filing

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You mentioned no need to file the income taxes what is the background about the same .Are you telling because you are also in the same boat or do you have some written clarification from Tax department about it . If you do not mind could you please share ?


YucaLandia


Jan 29, 2016, 6:54 AM

Post #4 of 13 (9890 views)

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Re: [Gracious] Tax Filing

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Hi,
Where you file depends on how you meet the qualifications of the US IRS's definition of 'tax home' ... vs. ... SAT/Hacienda's definition of 'principal place of fiscal activity'.

There are more details on these things at:
IRS Tax Issues for Americans Living and Working Abroad in Mexico Master Article

Happy Trails,
steve
-
Read-on MacDuff
E-visit at http://yucalandia.com


sparks


Jan 29, 2016, 10:25 AM

Post #5 of 13 (9871 views)

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Re: [Gracious] Tax Filing

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You file where you earn your money ..... and that's it

Sparks Mexico Blog - Sparks Costalegre


YucaLandia


Jan 29, 2016, 12:15 PM

Post #6 of 13 (9856 views)

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Re: [sparks] Tax Filing

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If it were as simple as 'filing only where the taxes are collected', then there would be no need for either the First Article Item 2 of the US-Mexico Tax Treaty:

"
2. The Convention shall not restrict in any manner any exclusion, exemption, deduction, credit, orother allowance now or hereafter accorded:a) by the laws of either Contracting State; orb) by any other agreement between the Contracting States. "

This means that Mexico must credit all tax payments the worker made to the USA, and the USA must credit all tax payments the worker made to Mexico. When one country (like Mexico) has higher tax rates on the same tax item that we already paid for in the other county (USA), we owe only the difference (to Mexico) - by applying the (US) credit for what we already paid.

This reciprocal credit (and reciprocal deductions & exemptions) is central to the fact that many Americans & Mexicans owe both US taxes and Mexican taxes - and that any $$ tax monies we pay to one government are simultaneously credited against what we owe the other government => No Double Taxation.

Consider further examples of $$ earned in Mexico still being liable for US taxes, US penalties, and US filings:
An American citizen who pays taxes for income in Mexico, is NOT magically exempt from IRS requirements for tax filing of FATCA, FBAR, etc.

and yes, if an American ignores the IRS and Treasury rules on these things, the penalties start at $10,000, go quickly to $25,000, and can escalate to up to 40% penalties of the value of the account.

IRS Tax Issues for Americans Living and Working Abroad in Mexico Master Articleand

Mexican Income Taxes on Capital Gains Taxes on Selling Mexican Real Estate 2014 Update

and

New 2014 Tax Laws for Mexico that Affect Expats and Foreigners

-
Read-on MacDuff
E-visit at http://yucalandia.com

(This post was edited by YucaLandia on Jan 29, 2016, 12:18 PM)


Gracious

Feb 2, 2016, 1:01 PM

Post #7 of 13 (9716 views)

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Re: [YucaLandia] Tax Filing

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Steve,
As always you gave such a wonderful information that I can not tell you . Its amazing !! But ...but ...
I have a problem in one line can you tell me if I am suppose to file the return in Mexico or not ?


FYI : I have a Temporary Resident Card but still I am staying in Hotel . I come back and forth between US and Mexico . In last one year from Jan-1-2015 to Jan-01-2016 I have been in Mexico for 222 Days . I do not draw any Mexico salary .


DavidHF

Feb 2, 2016, 2:57 PM

Post #8 of 13 (9701 views)

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Re: [Gracious] Tax Filing

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You have no income in Mexico therefore you do not file,


YucaLandia


Feb 2, 2016, 4:20 PM

Post #9 of 13 (9691 views)

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Re: [Gracious] Tax Filing

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Based on a very limited understanding of your situation, our best understandings from INM agents, and accountants is:

If your income is coming from a US company;
and
your income is paid to you in the USA (deposited to a US bank);
and
you are working remotely - like over the internet ;
and
you are paying US taxes on that income;
and
the USA is your Tax Home;
and
you have no other income or gains from activities/properties in Mexico or from Mexican businesses,

then you would not owe Mexican taxes.

Otherwise, you really need to speak with a qualified Mexican tax accountant or specialized tax lawyer.

steve
-
Read-on MacDuff
E-visit at http://yucalandia.com


johanson


Feb 2, 2016, 4:51 PM

Post #10 of 13 (9684 views)

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Re: [YucaLandia] Tax Filing

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That is how I understand it from those I know who are doing it.


Gracious

Feb 3, 2016, 6:19 AM

Post #11 of 13 (9647 views)

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Re: [johanson] Tax Filing

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Any one would you like to share some very good Tax expert who can help me with this ?

Is there any Mexico Govt Tax Department email id who can clarity the same ?


rvgringo

Feb 3, 2016, 8:07 AM

Post #12 of 13 (9636 views)

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Re: [Gracious] Tax Filing

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In Reply To
Hi ,
I have temporal resident card in mexico . I DO not draw any salary in Mexico , I get my salary out of USA, From last Jan-2015 to Jan-2016 I have been in Mexico for more than 230 days . Can any one tell me if I am obligated to file Income tax return in mexico ?



(This post was edited by rvgringo on Feb 3, 2016, 8:09 AM)


Aaron+

Feb 5, 2016, 9:54 AM

Post #13 of 13 (9551 views)

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Re: [rvgringo] Tax Filing

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Ok, no salary from activities in Mexico. So far no obligation.

The number of days you spend in Mexico or not does not seem to be relevant for indicating whether or not you are a resident for tax purposes, rather the percentage of income from Mexican sources.

Do you have a Mexican tax registry number (RFC), for example, from purchase of a property or a trust? Bingo, need to check with a Mexican accountant, because likely you need to file with the SAT, Mexico's IRS.

Do you have a Mexican interest bearing bank account? There is some level for which filing not required, and banks pay an interest rate approaching 0%, so you are probably clear here. Interest or appreciation of value for stocks or other investments (excluding non-realized property appreciation, that is, you did not sell the property in the tax year)?

See http://www.sat.gob.mx/...cion_anual_2014.aspx , http://www.sat.gob.mx/...sidentes_mexico.aspx. and http://www.sat.gob.mx/...ranjeros_mexico.aspx Chuckle, not that the last url seems to indicate that the page is in English. No such luck!
 
 
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