The Paper Chase | Real Estate & Business Consulting

Apr/10

14

FIDEICOMISO FISCAL

Are you thinking about renting your vacation property in Mexico?

or are you already renting your property in Mexico?

Do you know the fiscal implications of renting property in Mexico?

Keep the following in mind:

  • Earning rental income from your vacation property, if it is in fideicomiso, must be reported with mexican revenue office (servicio de administracion tributaria).
  • Failing to report income or not paying isr or impuesto sobre renta tax (direct tax over the rent or profit) could result in  serious consecuences, such as:
  1. Losing rights to your property:  if you have a fideicomiso document providing rights to the property (contrato de fideicomiso translativo de dominio) you could lose said rights because of the fraud caused and not respecting the obligations one has in said contract.
  2. If isr tax is not paid, this will be treated as non-fulfillment of fiscal regulations and is a fiscal evasion in both countries.
  3. The property could be seized and put up for sale.

If you are already renting: prevent this from happening and make sure all your paperwork is in order. Contact the person who manages your property. Before the mexican irs (sat) and other government authorities notify you.

If interested in renting: hire a professional to help you comply with the fiscal implications of renting property in Mexico.

If you want to learn more, please contact The Paper Chase using our web form.

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