Tax on Mexican senior's pensions

by cypress Mon Jul 11, 2022 3:44 pm

Since AMLO brought in pensions for senior Mexicanos some Mexicans may be surprised that they may have to pay tax on this income

by Lady Otter Latté Mon Jul 11, 2022 5:34 pm

cypress wrote:Since AMLO brought in pensions for senior Mexicanos some Mexicans may be surprised that they may have to pay tax on this income

Yes. And ….

by cypress Mon Jul 11, 2022 8:14 pm

Lady Otter Latté wrote:
cypress wrote:Since AMLO brought in pensions for senior Mexicanos some Mexicans may be surprised that they may have to pay tax on this income

Yes. And ….

things are changing in Mexico

by SunshineyDay Mon Jul 11, 2022 10:55 pm

And? Speak up

by Lady Otter Latté Tue Jul 12, 2022 4:41 am

SunshineyDay wrote:And? Speak up

Speak up to whom? Where?

by CanuckBob Tue Jul 12, 2022 7:20 am

I would imagine they are withholding the taxes right at the source. No?

by ferret Tue Jul 12, 2022 7:30 am

I can't imagine that would be very practical here. For many of the seniors in question, it is their only income and they would still fall far below the poverty line. Is there a minimum amount, as in Canada or the U.S., where they are exempt from taxation?

by Jreboll Tue Jul 12, 2022 7:34 am

I’ve never known of individuals filling out year-end tax forms.

by ferret Tue Jul 12, 2022 8:11 am

It's the direction in which Mexico is headed and I think the first step is the mandatory RFC number for all over 18.

by mudgirl Tue Jul 12, 2022 12:51 pm

CanuckBob wrote:I would imagine they are withholding the taxes right at the source. No?

No, as far as I'm aware taxes are paid on a monthly basis, not withheld. And my accountant told me that at the end of the year, doing the yearly filing, there are things you can deduct from any taxes owing, like medical and dental costs for which you have a factura.

by CanuckBob Tue Jul 12, 2022 2:13 pm

From the article below:

"Mexican employers are required to withhold income tax on any remuneration paid to employees at the rates established, and they must remit the withheld taxes generally by the 17th of the following month."

https://oxfordbusinessgroup.com/overview/returns-returns-layout-tax-rules-foreign-investors

by CanuckBob Tue Jul 12, 2022 2:17 pm

ferret wrote:I can't imagine that would be very practical here. For many of the seniors in question, it is their only income and they would still fall far below the poverty line. Is there a minimum amount, as in Canada or the U.S., where they are exempt from taxation?

The current "personal exemption" amount in Canada is $13,229.00 CAD. Those earning up to/or less than this do not pay taxes OR if they were withheld by an employer they will get all their taxes refunded when they file their return.

by cypress Tue Jul 12, 2022 3:00 pm

CanuckBob wrote:From the article below:

"Mexican employers are required to withhold income tax on any remuneration paid to employees at the rates established, and they must remit the withheld taxes generally by the 17th of the following month."

https://oxfordbusinessgroup.com/overview/returns-returns-layout-tax-rules-foreign-investors

But if the employer did not know the employee receiving the money was getting a pension, more money should be withheld. Only the government could sort that out.

by mudgirl Tue Jul 12, 2022 3:21 pm

CanuckBob wrote:From the article below:

"Mexican employers are required to withhold income tax on any remuneration paid to employees at the rates established, and they must remit the withheld taxes generally by the 17th of the following month."

https://oxfordbusinessgroup.com/overview/returns-returns-layout-tax-rules-foreign-investors

Ah, that's a different scenario, then, as it is dealing with the taxes an employer has to submit for its employees. Airbnb does the same thing- withholds the income tax owing as well as half the IVA charged to the guests on a booking and submits it to SAT. (As well as the occupancy tax if that applies in one's state)

I would imagine most seniors in Mexico who receive a senior's pension wouldn't show enough income to need to pay any taxes, but I haven't read the law regarding paying taxes if you have under a certain income.

by caligirl108 Tue Jul 12, 2022 3:44 pm

Apparently now the Mexican powers-that-be are now enforcing facturas for DONATIONS given to charity organizations (per a local bazar owner..) So no Not-For-Profit organization tax benefits here in Mexico.. Imagine AMLO's push for the RFCs for all will result in more created fees, permits, legalized graft than is already occurring. The amount of money collected in the US by IRS, states, utilities must torture him. As the 1% & political class in the US have created a huge tithing scheme, guess he figures he & cronies can do the same, build his 'legacy'..

by mudgirl Tue Jul 12, 2022 4:53 pm

But just because a factura is issued doesn't mean that tax would be charged on a donation to a non-profit. A factura is simply an official record of payment.

The taxes owing vary depending on the business classification. For instance, I have run an upholstery business for 16 years. I had to submit facturas to SAT for my income, but because I earned under a certain amount in a year, I was not subject to income tax.
That changed at the beginning of this year, when they revamped the tax system, but I will also have deductions I can take at the end of the fiscal year that will lower the taxes owing.

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