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anthony3070

Dec 19, 2011, 1:05 PM

Post #1 of 22 (2898 views)

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3% Tax on cash deposits

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Hey everyone --

So I do know that there is a 3% tax on any cash deposits over 15,000 pesos in a one month period. Maybe a stupid question, but does that mean 30 days? Or is there some other way to measure the time passed?

i.e. I deposit 15,000 on Nov. 22nd to "use up November" and then deposit 15,000 on Dec. 3rd to use up the limit for the month of December.....

Thanks everyone

anthony3070

Dec 19, 2011, 1:10 PM

Post #2 of 22 (2892 views)

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Re: [anthony3070] 3% Tax on cash deposits

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This is the best answer I could find, but as you can see it is unclear how that month is calculated.

Source: http://www.baja123.com/DEPOSITING_AND_WITHDRAWING_MONEY_IN_MEXICO/page_2313793.html

"How the IDE is calculated – for example, if during one month you made cash deposits for $30,000 pesos (or the equivalent in dollars) the IDE should be calculated as following:

Total deposit $30,000 Pesos - $15,000 Pesos = $15,000 Pesos over the limit. Take 3% of $15,000 Pesos = $450 Pesos you will owe for IDE taxes. The over the limit amount will be deducted automatically from your account on the last day of the month.

I will recommend you to use wire transfers or check deposits every time you can, instead of cash deposits."

chicois8

Dec 19, 2011, 3:56 PM

Post #3 of 22 (2846 views)

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Re: [anthony3070] 3% Tax on cash deposits

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Just another reason for expats to avoid a Mexican Bank Account...

With immigration laws changing every year or so, possible toll for sentry and ready lanes, possible smog checks for immigrants vehicles and now the $200 to $400 deposit for bringing in a vehicle it sure seems the Mexican Government would rather have tourists than retirees in their country!!!!!!!!!!

RickS

Dec 19, 2011, 4:05 PM

Post #4 of 22 (2840 views)

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Re: [anthony3070] 3% Tax on cash deposits

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I just found out today that the 3% 'fee' touches more than just a personal deposit. I was discussing, with a real estate management company, the rent on a casa in SMA. The rent was quoted in dollars. I don't carry around that much cash dollars, preferring to get my living expenses from my NOB account via an ATM transaction. So if I pay the rent in pesos as I must do, I also must pay an extra 3% because that is what the company must pay when depositing my rent money in their bank account! (Yes, I could have given a NOB check.... but in this case we do not have the 3 weeks necessary for a check to clear.... or I could have my bank transfer the money..... at a fee of $35 from the rental company plus whatever my NOB bank would charge me on their end for the transfer.)


(This post was edited by RickS on Dec 19, 2011, 6:42 PM)

chicois8

Dec 19, 2011, 4:17 PM

Post #5 of 22 (2834 views)

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Re: [RickS] 3% Tax on cash deposits

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I just found out today that the 3% 'fee' touches more than just a personal deposit. I was discussing, with a real estate management company, the rent on a casa in SMA. The rent was quoted in dollars. I don't carry around that much cash dollars, preferring to get my living expenses from my NOB account via an ATM transaction. So if I pay the rent in pesos as I must do, I also must pay an extra 3% because that is what the company must pay when depositing my rent money in their bank account! (Yes, I could have given a NOB check.... but in this case we do not have the 3 weeks necessary for a check to clear.... or I could have my bank transfer the money..... at a fee of $35 from the rental company plus whatever my NOB bank would charge me on their end for the transfer).


If I were in your shoes I would ask the rental company if I could pay 1/2 on the first of the month and 1/2 on the 15th of the month, just a thought............

joaquinx


Dec 19, 2011, 5:09 PM

Post #6 of 22 (2819 views)

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Re: [chicois8] 3% Tax on cash deposits

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Mexican bank fees are everywhere. I received a settlement check for 45.65usd and debated whether to mail it to my bank in the US or hop over to HSBC and deposit it there. I opted for HSBC rather than finding an envelope and driving to el centro to mail it. No problem as they converted it for 603.94, which I thought was a good rate. Good rate until, I looked up the transaction on-line. I got charged a 120 peso fee plus 19.20 peso IVA.

esperanza

Dec 19, 2011, 5:18 PM

Post #7 of 22 (2809 views)

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Re: [chicois8] 3% Tax on cash deposits

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In Reply To
I just found out today that the 3% 'fee' touches more than just a personal deposit. I was discussing, with a real estate management company, the rent on a casa in SMA. The rent was quoted in dollars. I don't carry around that much cash dollars, preferring to get my living expenses from my NOB account via an ATM transaction. So if I pay the rent in pesos as I must do, I also must pay an extra 3% because that is what the company must pay when depositing my rent money in their bank account! (Yes, I could have given a NOB check.... but in this case we do not have the 3 weeks necessary for a check to clear.... or I could have my bank transfer the money..... at a fee of $35 from the rental company plus whatever my NOB bank would charge me on their end for the transfer).


If I were in your shoes I would ask the rental company if I could pay 1/2 on the first of the month and 1/2 on the 15th of the month, just a thought............
Half on the first and half on the 15th wouldn't solve the problem: the tax is on the total for the month, or anything over 15,000MN. The poster could pay half on the last day of the month (for the first) and half on the 15th--that would solve the tax situation.




http://www.mexicocooks.typepad.com








chicois8

Dec 19, 2011, 5:24 PM

Post #8 of 22 (2803 views)

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Re: [esperanza] 3% Tax on cash deposits

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In Reply To
In Reply To
I just found out today that the 3% 'fee' touches more than just a personal deposit. I was discussing, with a real estate management company, the rent on a casa in SMA. The rent was quoted in dollars. I don't carry around that much cash dollars, preferring to get my living expenses from my NOB account via an ATM transaction. So if I pay the rent in pesos as I must do, I also must pay an extra 3% because that is what the company must pay when depositing my rent money in their bank account! (Yes, I could have given a NOB check.... but in this case we do not have the 3 weeks necessary for a check to clear.... or I could have my bank transfer the money..... at a fee of $35 from the rental company plus whatever my NOB bank would charge me on their end for the transfer).


If I were in your shoes I would ask the rental company if I could pay 1/2 on the first of the month and 1/2 on the 15th of the month, just a thought............
Half on the first and half on the 15th wouldn't solve the problem: the tax is on the total for the month, or anything over 15,000MN. The poster could pay half on the last day of the month (for the first) and half on the 15th--that would solve the tax situation.

Your right, what was I thinking, it's still 3% for the month..duh

sparks


Dec 19, 2011, 6:17 PM

Post #9 of 22 (2784 views)

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Re: [esperanza] 3% Tax on cash deposits

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Gheeesh .... what happens if you sell a house. Maybe bank transfers are exempt. Then if you had to transfer that money up north .... drug money for sure

Sparks Mexico - Sparks Costalegre

YucaLandia


Dec 19, 2011, 6:26 PM

Post #10 of 22 (2779 views)

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Re: [chicois8] 3% Tax on cash deposits

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In Reply To
In Reply To
In Reply To
I just found out today that the 3% 'fee' touches more than just a personal deposit. I was discussing, with a real estate management company, the rent on a casa in SMA. The rent was quoted in dollars. I don't carry around that much cash dollars, preferring to get my living expenses from my NOB account via an ATM transaction. So if I pay the rent in pesos as I must do, I also must pay an extra 3% because that is what the company must pay when depositing my rent money in their bank account! (Yes, I could have given a NOB check.... but in this case we do not have the 3 weeks necessary for a check to clear.... or I could have my bank transfer the money..... at a fee of $35 from the rental company plus whatever my NOB bank would charge me on their end for the transfer).


If I were in your shoes I would ask the rental company if I could pay 1/2 on the first of the month and 1/2 on the 15th of the month, just a thought............
Half on the first and half on the 15th wouldn't solve the problem: the tax is on the total for the month, or anything over 15,000MN. The poster could pay half on the last day of the month (for the first) and half on the 15th--that would solve the tax situation.

Your right, what was I thinking, it's still 3% for the month..duh

Your plan works for just 1 month or for a 1 month lease. If you have the place for 2 months, (or more) then you still wind up exceeding the monthly limit - because your payment on the 15'th of the month then gets added to you next month's (pre)payment on the 31'st of that same month....
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Read-on MacDuff
E-visit at http://yucalandia.wordpress.com/

Bennie García

Dec 19, 2011, 7:39 PM

Post #11 of 22 (2755 views)

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Re: [chicois8] 3% Tax on cash deposits

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How many expats make cash deposits of more than 15000 pesos a month into a Mexican account?

The withholding has absolutely nothing to do with gouging gringos.

chicois8

Dec 19, 2011, 7:46 PM

Post #12 of 22 (2750 views)

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Re: [Bennie García] 3% Tax on cash deposits

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I do not know but with the growing number of expats working now and in the future in Mexico the numbers may rise, it's just a little more than a thousand dollars US....

Bennie García

Dec 19, 2011, 8:10 PM

Post #13 of 22 (2740 views)

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Re: [chicois8] 3% Tax on cash deposits

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I do not know but with the growing number of expats working now and in the future in Mexico the numbers may rise, it's just a little more than a thousand dollars US....

But you said it would discourage "retirees" from opening accounts. And if they are working then why shouldn't they follow the rules like the rest of the country?

YucaLandia


Dec 19, 2011, 8:15 PM

Post #14 of 22 (2738 views)

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Re: [chicois8] 3% Tax on cash deposits

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This raises an interesting question: How many of us need to make cash deposits of more than $15,000 pesos a month?

We get paid in pesos by check and by direct deposit, so, we really have $0 pesos in monthly cash deposits.
Don't most other expats receive pension and social security as checks or bank-to-bank transfers - not cash needing depositing?

I would expect that a few expats with large rental incomes or successful artists might exceed the $15,000 peso in tax-free cash deposits.

This points to the tax hitting people with lots of unreported cash income - which doesn't seem to fit expats, unless they are in in drug biz or are big in real estate.
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Read-on MacDuff
E-visit at http://yucalandia.wordpress.com/

(This post was edited by YucaLandia on Dec 19, 2011, 8:19 PM)

RickS

Dec 20, 2011, 6:53 AM

Post #15 of 22 (2688 views)

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Re: [esperanza] 3% Tax on cash deposits

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" The poster could pay half on the last day of the month (for the first) and half on the 15th--that would solve the tax situation."

While in theory it might solve my problem, in practice I doubt it will. The entity actually making a deposit in a bank, and thus the one required to pay the 3% fee over the $15,000 limit, is a real estate management company. They get my and other cash rental payments and deposit them. My payment is actually less than $15,000 pesos but their total deposits is greater. So no matter when I pay, they are hit with the fees.

salto_jorge

Dec 20, 2011, 11:31 AM

Post #16 of 22 (2631 views)

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Re: [RickS] 3% Tax on cash deposits

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With the current check21 rules and regulations could you ( or a business) do a remote deposit over the internet using a portable scanning machine and software ?

This way you can avoid fees plus have your money in a NOB bank account.

RickS

Dec 20, 2011, 11:57 AM

Post #17 of 22 (2622 views)

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Re: [salto_jorge] 3% Tax on cash deposits

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I have done something similar to what I think you are referring to.....

I bought a used part for my truck from a guy in another state. He suggested that I could pay him by:
+ scanning my check into my computer
+ emailing the check image to him
+ he, using his iPhone and software from his bank, would read the email and deposit the check-image into his bank account

Bennie García

Dec 20, 2011, 12:35 PM

Post #18 of 22 (2606 views)

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Re: [RickS] 3% Tax on cash deposits

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I don't know the filing status of the real estate managing company but unless they are filing within the pequeño contribuyente flat tax system, they are able to deduct the 3% withheld on cash deposits when they pay their taxes.

I think someone may be getting hosed here.

mazbook1


Dec 20, 2011, 2:12 PM

Post #19 of 22 (2581 views)

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Re: [Bennie García] 3% Tax on cash deposits

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I think you're probably right, Bennie. Certainly not the only case of a company making extra profit by misinforming their customers, particularly about technical things that the customer would never be expected to know.

It's the same in my business, the book business. México's largest importer of English-language paperback books and magazines (DIMSA) from the U.S. (and Canada) justifies their high retail prices by claiming they are due to the high import duty. The reality is that books, magazines and newspapers from the U.S. and Canada enter México COMPLETELY DUTY-FREE! Then there are the small bookstores that charge IVA on books, when the reality is that books, magazines, newspapers and maps have NO IVA tax in México, so that just means an additional 16% goes into the proprietor's pocket!


(This post was edited by mazbook1 on Dec 20, 2011, 5:23 PM)

clariboe

Feb 19, 2012, 9:37 AM

Post #20 of 22 (1647 views)

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Re: [RickS] 3% Tax on cash deposits

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That sounds to me like a "cost of doing business" for the company, especially if your deposit is less than 15K. Does everyone who pays them pay the 3%? If so, they make out pretty well just on the fee reimbursement.

John Shrall

Feb 23, 2012, 3:47 PM

Post #21 of 22 (1442 views)

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johanson


Feb 23, 2012, 4:12 PM

Post #22 of 22 (1434 views)

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Re: [John Shrall] 3% Tax on cash deposits

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Not me :)
 
 
 
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