IVA Tax for Rental Income
- Thread starter mis2810
- Start date
Ok, so forget my question above. Has anyone figured out the new tax law for rental income that started this year? We are registered with SAT and have a Mex bank account. Please don't say go hire a Mexican accountant because I'm not going to pay somebody $100 a month to do this for me. Is the IVA tax what we're supposed to be paying to SAT?
Buffalo Marty
Guest
Hi Mis- I'm not sure if this helps at all (prolly not), but Im with RPR, and although the monthly accounting rate they originally started with was $100 per month, after 'reassessing' it was reduced to $50. Prior to the tax changes, it had been $20/month. So at this point, it is a $30/month increase. Still not fantastic, but better than the outrage that $100 was. RPR told me the reduction was influenced to some degree because other rental companies lowered their fees as well so they had to keep up.
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Buffalo Marty
Guest
And yes I believe that the IVA goes to SAT but Im not sure exactly how (or how often) payment is made
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Hi Marty, thanks - I appreciate your response. I'm not with RPR, I'm with another rental company. My rental company charges each guest 16% IVA tax. Shouldn't they be giving me a portion of that IVA tax based on their percentage of the commission split between the owner and the company so that I can pay that to SAT with our Taxpayer ID number?
lagrimas85
AKA Carnac
Do they charge IVA on the full rental amount Melissa? The rental company that is. Or only on what they are charging you, for their service? Do you have to invoice the rental company, to get paid? I'm only asking, because it seems to me you would invoice that to them, in order for them also to have a record of the IVA being passed on to you.
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They charge like this: $150.00 per night x 2 nights = $300.00 (Room Rent)
16% IVA = 48.00
Cleaning = 38.00
Booking fee, etc.
In other words, is the tax that I'm supposed to be paying part of that IVA based on my 65/35 split with the management company? If so, then they should be returning 65% of that $48.00 tax to me and they should be keeping 35% of it and we each pay SAT under our tax payer ID numbers?
Or is the tax that I'm supposed to pay bi-monthly based solely on the 65% of the room rent I get and it has nothing to do with IVA?
I'm hearing different things from different people. I have a couple other owners telling me that the rental company has been keeping too much of the taxes they're collecting from the guest and they are not paying it to SAT (essentially pocketing it) as in the past because the law changed as of January 1, 2014. Then I have someone else telling me that I don't have to pay any taxes - which I'm sure is wrong.
16% IVA = 48.00
Cleaning = 38.00
Booking fee, etc.
In other words, is the tax that I'm supposed to be paying part of that IVA based on my 65/35 split with the management company? If so, then they should be returning 65% of that $48.00 tax to me and they should be keeping 35% of it and we each pay SAT under our tax payer ID numbers?
Or is the tax that I'm supposed to pay bi-monthly based solely on the 65% of the room rent I get and it has nothing to do with IVA?
I'm hearing different things from different people. I have a couple other owners telling me that the rental company has been keeping too much of the taxes they're collecting from the guest and they are not paying it to SAT (essentially pocketing it) as in the past because the law changed as of January 1, 2014. Then I have someone else telling me that I don't have to pay any taxes - which I'm sure is wrong.
lagrimas85
AKA Carnac
It would be double taxation for you too also pay the IVA, I dont believe you need to pay IVA but you might owe an income tax..In order for you to pay IVA, you need to collect it from somewhere, but in order to collect it from your rental agent, you would need to give them a factura..
I have screwed with every tax in Mexico, but IVA..Just sit down with an accountant, one time get the right way to do it and do it yourself from there.. If you talked to our accountant, he probably wouldn't charge you anything. .
I have screwed with every tax in Mexico, but IVA..Just sit down with an accountant, one time get the right way to do it and do it yourself from there.. If you talked to our accountant, he probably wouldn't charge you anything. .
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Then I guess I don't understand what I'm obligated to pay or at least what percentage of my rental income I'm supposed to pay. None of what I'm supposed to pay is IVA related then? I guess what has thrown me is that I was told the rental company was keeping too much money. In all the reservations the only tax they've withheld is the IVA, so maybe I was misled.
lagrimas85
AKA Carnac
The IVA is a sales tax, that is charged to the renter, there is an ivoice made out by the agent to the renter and the IVA is applied, they then pay the amount on the invoice to Hacienda, in order for you to collect the tax from your agent you would need to issue an invoice to them.. I dont think they are keeping a percentage of the tax, I think they keep it all as they should and then pay it to Hacienda... The money they pay you, I doubt has any collected tax included in it..
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lagrimas85
AKA Carnac
Opinions are fine Melissa, but let someone who knows what they're doing. look at your paperwork and advise you, it's probably only a 20 minute ordeal.I .
lagrimas85
AKA Carnac
Check your inbox, from about 2 weeks ago.
How did I miss that? Well it was from the 28th and we left on the 29th anyway. My last message to you was let me know when you get to town. Did you guys just get there on the 28th?
lagrimas85
AKA Carnac
Yea we did, read your own thread, What is it about this place, that will probably explain why you didn't notice.
Buffalo Marty
Guest
This thread now makes me want to investigate more thoroughly. In my case with RPR, they subcontracted an accounting firm to handle compliance with the new tax laws- so it is my understanding that between RPR & the accountants, they will make tax calculations & payments to SAT on my behalf. But in your case, I assume you are still using a rental agency but NOT using their accounting services (to avoid the $100 a month). In that case, I think you are correct- the rental company should remit 65% (or whatever the owner share is) of the collected IVA to you so you can file with SAT.
Regarding the actual tax rate, I believe it IS correct that the tax rate for this year is 0%- the accounting firm explained to me that it is the first step in what will be (if they are correct and my memory serves) a 10-year phase-in of the new tax system. My understanding is that that any net rental profit (after all deductions) will be subject to a flat tax- I think it may be the same 16% as the IVA but not positive. BUT, they said that it will be phased in with 10% increments each year, starting at 0% in 2014. (to start compliance and avoid "sticker shock"). So this year it will be PROFIT x TAXRATE x 0%. Then next year it will be PROFIT x TAXRATE x 10%, with that last number jumping every year to 20%, 30%, etc, until it is fully implemented in 10 years.
That above part is all based on my memory & understanding from my meeting with the accountant in February, but I am going to check in again to confirm. I will post any new details/clarifications I find out. I can provide the accounting contact also if anybody wants. I was VERY pissed off when they jacked up the accounting fee to $100/month, but I've come to terms with $50 being reasonably acceptable (considering that some part of that also includes all the bill paying services). You may want to check back with your rental company to see if they too reduced their fees- as I said, RPR told me they did it partially because other rental companies dropped their rates. Hope some of this helps!
Regarding the actual tax rate, I believe it IS correct that the tax rate for this year is 0%- the accounting firm explained to me that it is the first step in what will be (if they are correct and my memory serves) a 10-year phase-in of the new tax system. My understanding is that that any net rental profit (after all deductions) will be subject to a flat tax- I think it may be the same 16% as the IVA but not positive. BUT, they said that it will be phased in with 10% increments each year, starting at 0% in 2014. (to start compliance and avoid "sticker shock"). So this year it will be PROFIT x TAXRATE x 0%. Then next year it will be PROFIT x TAXRATE x 10%, with that last number jumping every year to 20%, 30%, etc, until it is fully implemented in 10 years.
That above part is all based on my memory & understanding from my meeting with the accountant in February, but I am going to check in again to confirm. I will post any new details/clarifications I find out. I can provide the accounting contact also if anybody wants. I was VERY pissed off when they jacked up the accounting fee to $100/month, but I've come to terms with $50 being reasonably acceptable (considering that some part of that also includes all the bill paying services). You may want to check back with your rental company to see if they too reduced their fees- as I said, RPR told me they did it partially because other rental companies dropped their rates. Hope some of this helps!
Thanks Marty - that helps a lot - in thinking that I might not be crazy. I'm no math whiz and this kind of stuff gives me a headache. But after all the information I gathered, I think the IVA is separate and apart from any taxes we pay on rental income. I was very quick to believe that I was being ripped off, which may or may not still be true. My only objectives in all of this are to be compliant with Mexican law, not get ripped off, and not pay more than I have to.
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Buffalo Marty
Guest
Now that I thought about it again, you are totally right Mis- what I said was right I think as far as the taxes on rental income, but the IVA is essentially just the sales tax the renter pays so it all goes straight to SAT (assuming the rental company is 100% honest- that's another story haha)
Then any taxes on net rental income would be paid by the owner. BUT, as I mentioned, I believe that rate is ZERO this year and will only climb very slowly. That is the part I need to confirm 100%. Let me know if you find out anything else!
Then any taxes on net rental income would be paid by the owner. BUT, as I mentioned, I believe that rate is ZERO this year and will only climb very slowly. That is the part I need to confirm 100%. Let me know if you find out anything else!
lagrimas85
AKA Carnac
Didn't I say that a while ago? Once the rental company puts the IVA collected on their books, they would never send it anywhere but hacienda..
You did, and that's when I had my lightbulb moment.