MexConnect.com Forums: General: Living, Working, Retiring: Working remotely for US Company: Page 2

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Marlene

Jul 6, 2006, 7:37 AM

Post #26 of 31 (609 views)

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Re: [islena] Working remotely for US Company

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I currently declare all income and pay all taxes in Canada, and from what I've read from various sources, that would still continue after the move. But I need to talk to an international immigration lawyer and an accountant to get their recommendations on how to handle the Canadian side of the equation next

You really don't need to talk to Immigration lawyers or international accountants, at least when it comes to Canada. You should read the linked site below and then contact Revenue Canada (CCRA) as there are a various ways to determine your tax situation, depending on personal circumstances. There is also a special office noted in this link which can help you determine your residency status for tax purposes if you have questions after reading the site. It is not always beneficial to opt completely out of the Canadian tax system but this will become clear as you investigate.

http://www.cra-arc.gc.ca/...g/t4131/t4131-e.html

Pick up a copy of this little booklet (or read it online) for other useful tips from the Canadian Government. There are many Canadians working from Mexico (and other countries) via the internet and otherwise.

http://www.voyage.gc.ca/...orking_abroad-en.pdf

islena

Jul 6, 2006, 9:11 AM

Post #27 of 31 (591 views)

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Re: [Marlene] Working remotely for US Company

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Hi Marlene,

Thank you for those links. The first was where I learned most of the information I know so far about Canada, but I still have questions about RRSP and things like that. The second booklet, on first glance, looks like it will answer more questions - thanks SO much for your help!

My goal is to do things correctly so I don't risk getting into trouble in either country - I just want to live out the rest of my life in peace, in the home that I love. Sometimes the thought of everything one has to do to connect all the dots is overwhelming but I need to find the time to do this.

Thanks again,
Sue

Liz & Don Oakley

Jul 7, 2006, 8:26 PM

Post #28 of 31 (530 views)

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Re: [Caarina12] Working remotely for US Company

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Working remotely from Mexico can work very well. You should work as a contractor and not an employee. Check with your accountant and you may find that by living in Mexico full time you can avoid CA state income tax (~11% ?) and more importantly, the 1st $70,000 USD earned income can be excluded from your federal income taxes. That's huge so who cares what the cost of the high speed internet is.

Bring your Vonage router into Mexico with you.

Bill in NC

Jul 9, 2006, 6:51 PM

Post #29 of 31 (456 views)

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Re: [jerezano] Working remotely for US Company

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It's clear that Mexico does tax its residents on their worldwide income:

http://www.expatfocus.com/expatriate-mexico-taxation

http://www.internationalliving.com/free_reports/03-02-06-world-tax.html

http://www.taxmeless.com/page6.html

There seems to be a popular perception on these forums that only Mexican-sourced income is subject to Mexican income tax.

In Reply To

Mexico has no taxes (other than the famous IVA) levied against foreign citizens. Of course if you have Mexican generated income, that is a completely different matter.

jerezano

Jul 9, 2006, 8:27 PM

Post #30 of 31 (437 views)

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Re: [Bill in NC] Working remotely for US Company

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Hello,

The following passage quoted from the International Living website http://www.internationalliving.com/...02-06-world-tax.html
provided by Bill in NC is a good summing up of the Mexican tax position most of us happy Mexico residents are in:

>>The main repercussion for a foreign resident is the effect it will have on your ability to obtain a homestead exemption on the sale of your principal residence in Mexico. If you have only one home, and that home is in Mexico, then you should be able to get a homestead exemption. However, if you have one home in Mexico and another in the U.S., it will be more difficult to get an exemption, especially if your income is not derived from Mexican sources.

>>The flip side is that those foreign residents that have a home in Mexico and abroad, and who derive most of their income from sources outside of Mexico, need not worry about reporting and paying Mexican income taxes. <<

And for most of us, even though we may not have a home somewhere outside of Mexico, Mexico, up to the present time has assumed that we do have one and has made no effort to impose taxes on us. Of course it could happen. I suppose a lot depends on---si vale la pena enforzar la ley.

Adiós. jerezano.

ncferret

Jul 11, 2006, 4:23 PM

Post #31 of 31 (378 views)

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Re: [jerezano] Working remotely for US Company

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Both the US and Mexico define different types of income and tax them accordingly. Don't confuse investment (capital gains), or interest, or pension income with earned income, or rental income. The IRS and SAT have clear definitions for all of these and treat them differently.

For example, rental income (minus expenses) in the US is generally added into your total taxable income and taxed at your individual rate. In Mexico, taxes on rental income for non residents is a flat 25% on the gross income. Both residents and nonresidents may be required to charge value-added taxes.

In another thread there was some discussion about having dual citizenship in the US and Mexico. Now just imagine how THAT can complicate your tax situation! Please get some professional advice on these matters. Believe me, it's worth every penny...

(This post was edited by ncferret on Jul 11, 2006, 4:24 PM)

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