Filing mexican TAX reports or not (Permanent resident Visa)

GuestPoster1197023 Guest

0POSTS

9 years ago

HI, I am a Canadian citizen and to become Mexican resident under the Permanent resident Visa.
My researches and calls gave me the following:
For Revenu Canada, must complete for NR73 for Non resident status, then pension providers will take 15% off all revenues (all our revenues are from pension) thus no tax report to file unless applying the article 217 reducing the taxes to about 10% for me.
But for the Mexican side of it, it's not clear the only info was found on Price Waterhouse Coopers site all residents even from a foreign country must file a tax report annually for worldwide revenues which seems double reporting. " "

Does anyone have any clue or help to provide to us.
Thanks a million, GyC

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alleycat1 Serial expat

352POSTS

9 years ago

mexicogc wrote:
HI, I am a Canadian citizen and to become Mexican resident under the Permanent resident Visa.
My researches and calls gave me the following:
For Revenu Canada, must complete for NR73 for Non resident status, then pension providers will take 15% off all revenues (all our revenues are from pension) thus no tax report to file unless applying the article 217 reducing the taxes to about 10% for me.
But for the Mexican side of it, it's not clear the only info was found on Price Waterhouse Coopers site all residents even from a foreign country must file a tax report annually for worldwide revenues which seems double reporting. " "

Does anyone have any clue or help to provide to us.
Thanks a million, GyC

As far as I understand it if any money was earned in Mexico you file a Mexican tax form with their SAT/SHCP. If not you don麓t need to. Mexican banks require you file a yearly FACTA but this is for US citizens. I don麓t know if Canada has an equivalent form they require.

GuestPoster1197023 Guest

0POSTS

9 years ago

Thanks for the information I will check the SAT/SHCP site for more info. I also will compare both fiscal agreements between Canada/Mexico & USA/Mexico. GyC

travellight VIP Member

2460POSTS

9 years ago

If you don't work in Mexico or earn an income from Mexico you do not owe Mexican taxes. That's if you are a U.S. citizen.聽 i doubt that as a Canadian it would be any different,聽聽聽 check with Canada, they should know. Checking with SAT would likely just confuse you and SAT.

I have a Mexican, not U.S. or other country based account . They have never asked me to fill out聽 any yearly forms. That requirement might be related to banks that are in Mexico but not Mexican owned, like Scotia.

1 member reacted to this post

alleycat1 Serial expat

352POSTS

9 years ago

travellight wrote:
If you don't work in Mexico or earn an income from Mexico you do not owe Mexican taxes. That's if you are a U.S. citizen.聽 i doubt that as a Canadian it would be any different,聽聽聽 check with Canada, they should know. Checking with SAT would likely just confuse you and SAT.

I have a Mexican, not U.S. or other country based account . They have never asked me to fill out聽 any yearly forms. That requirement might be related to banks that are in Mexico but not Mexican owned, like Scotia.

All Mexican banks are doing it lately and the E-Mail they sent me states if I don麓t file it they will notify SAT that I didn麓t. It is a fairly new deal here. Check all your E-Mails from your bank. Don麓t delete them thinking it is another ad to buy insurance from them etc..

travellight VIP Member

2460POSTS

9 years ago

OK, I will ask.

travellight VIP Member

2460POSTS

9 years ago

So I checked IRS, and Yucatan living and I do not work, own property or have a bank account over $10,000 USD. Which seems to indicate it doesn't apply to me. Good thing I don't have lots of money, and that all of my assets are U.S. based.

"Check out whether you need to file FATCA Form 8938 (on Foreign Financial Assets) with your April IRS filings and/or FinCEN BSA E-Filing, Report of Foreign Bank and Financial Accounts (FBAR) Single filers need to file 8938 if聽 they have $50,000 total in any combination of foreign accounts on the last day of the tax year, or $75,000 at any time during the tax year.聽聽

Americans must also file FBAR reports if they have $10,000 at any time during the calendar year.聽 ~Joint filing threshold limits are higher for both categories.~"

ezpaci Member

16POSTS

9 years ago

I live in MX, resident. I considered starting some small business in MX. Checked with SAT. 2 types for tax purposes: 1) regular with lots of paper work and controls, 2) Street vendor type with fixed tax amount. I preferred not to start a business, I don't need it.
English speaking SAT chief said 2013 if I don't earn peso in MX I don't have to register with SAT, The only tax due was the VAT on good and services. Chief left, new chief speaks Spanish only.
Later my foreign bank wanted to receive a MX tax number. I went to SAT, explained, was told in English they would review and let me know by email. Did not receive email for 2 or 3 years.
When foreign banks ask me for TAX number I use the one that was created when I considered to start business. It keeps them happy and I hope me out of trouble.
Latest is a request by a foreign bank for all countries tax numbers where I might be subject to tax. I don't know whether I am subject to Canadian tax, receiving no longer pension from there. Clarification in progress, I won't mention Canada to the new bank request.
This message is not a guide, only a reported experience.

lucienmex Serial expat

474POSTS

9 years ago

travellight

"If you don't work in Mexico or earn an income from Mexico you do not owe Mexican taxes. That's if you are a U.S. citizen.聽 i doubt that as a Canadian it would be any different,聽聽聽 check with Canada, they should know. Checking with SAT would likely just confuse you and SAT.

I have a Mexican, not U.S. or other country based account . They have never asked me to fill out聽 any yearly forms. That requirement might be related to banks that are in Mexico but not Mexican owned, like Scotia."

So rigth!

What to add? it has been my experience with France for years, You pay taxes to the country you get the money from. (pension, rents etc...) Maybe it's different above some level of income but it is not my case unfortunately. :-(

lucienmex Serial expat

474POSTS

9 years ago

#10

travellight:

"If you don't work in Mexico or earn an income from Mexico you do not owe Mexican taxes. That's if you are a U.S. citizen.聽 i doubt that as a Canadian it would be any different,聽聽聽 check with Canada, they should know. Checking with SAT would likely just confuse you and SAT.

I have a Mexican, not U.S. or other country based account . They have never asked me to fill out聽 any yearly forms. That requirement might be related to banks that are in Mexico but not Mexican owned, like Scotia."

So rigth!

gudgrief ViP

844POSTS

9 years ago

#11

I don't expect the Mexican Government will ever ask anyone to file taxes unless you actually received wages, salary or had funds deposited in a Mexican bank account.

If you have Social Security and or private annuities where you get a fixed payment, from what I can tell, they are tax exempt here.聽 Periodic payments from an IRA or 401K may be a different story especially if deposited in a Mexican bank account.聽 That's because they're investment income rather than annuity or pension income.

That's my opinion.聽 I'll live with it but would appreciate seeing expert opinion to explain the law's intent and practice.聽 It's clear that one answer probably doesn't fit all.

1 member reacted to this post

lucienmex Serial expat

474POSTS

9 years ago

#12

(UPS sorry for showing twice the same post!聽

)

bdwight Active member

27POSTS

9 years ago

#13

Like you, I'm a Canadian receiving pension income from Canada. I've filed an annual return in Mexico beginning with the year that I qualified as a tax resident of Mexico. I have never had to pay any additional income tax in Mexico on those monies so my only cost to file is the accountant's fee (which is low). As stated, Mexico taxes residents on their world income so you do need to file. BTW, I'm getting dinged with a 20% withholding on my payments from Canada - you are fortunate if your only paying 15%!

gudgrief ViP

844POSTS

9 years ago

#14

Just curious, are you getting that 20% refunded because if I read correctly, you don't owe any Mexican tax?

bdwight Active member

27POSTS

9 years ago

#15

gudgrief, alas, no, no refunds. 20% is the withholding on pension payments mandated by the Canada-Mexico tax treaty. And, if you don't file your non-resident tax form in Canada on time that 20% rate jumps to 35% until you do.

gudgrief ViP

844POSTS

9 years ago

#16

That withholding is Canadian withholding or Mexican?
So, you're paying a 20% tax?
I'm American and withholding on pensions is optional.

bdwight Active member

27POSTS

9 years ago

#17

Gudgrief, the country where the payment originates is the country which does the withholding. And yes, 20% is ugly, more than I would pay in Canada - except that I couldn't afford to live on my pensions in Canada.

Withholding may be optional for you because, due to CBT, you need to file a US tax return annually in any case.聽 The tax systems of all other countries on planet Earth, except Eritrea, use residency, not citizenship, as the determinate of where you file your income tax return.

gudgrief ViP

844POSTS

9 years ago

#18

All I can say is that sucks.
As I understand it, Mexico and US both allow deductions for taxes paid in the other.聽 Too bad it doesn't apply to IVA.

GuestPoster1197023 Guest

0POSTS

9 years ago

#19

bdwight wrote:
Gudgrief, the country where the payment originates is the country which does the withholding. And yes, 20% is ugly, more than I would pay in Canada - except that I couldn't afford to live on my pensions in Canada.

Withholding may be optional for you because, due to CBT, you need to file a US tax return annually in any case.聽 The tax systems of all other countries on planet Earth, except Eritrea, use residency, not citizenship, as the determinate of where you file your income tax return.

Well, I called Revenue Canada again and got again the same awnser which applies to all non residents "art. 17 of the treaty, 15% is the maximum witheld and payable". Here is the official copy link聽 . This applies only if you have completed the NR73 form confirming in which country you live in.

I also have gotten an awnser from various Canadian expats, they said that filing a return in Mexico is not required as long as you don't have any mexican income...Also quoted in the 1st parag. of art. 17 of the treaty "may be taxe de in that other state"

In our case, we will also file a manual NR return in Canada applying article 217 (90% of total income is from pensions) of Revenue Canada non resident tax return thus reducing our tax rate to 8% or 10% but has to be submitted by June 30th with all documents.聽 We'll see!

Hoping this can be helpfull.

GyC

ezpaci Member

16POSTS

5 years ago

#20

what is the name of the form, w8-ben may be?

travellight VIP Member

2460POSTS

5 years ago

#21

welcome ezpaci,

could you retry your question; it's not clear what you are asking?

wnnamove New member

5POSTS

4 years ago

#22

I do not know if Canada has a tax treaty with Mexico or not. USA citizens are exempt from filing/owing taxes on our USA Social Security payments via a tax treaty with Mexico. All other income is subject to Mexican tax law, as聽 Mexico taxes worldwide income. If I am wrong, I am sure, someone will correct me. Have you contacted the Canadian Embassy in Mexico or done an internet search? Those might be worth a try.

mrpres Active member

68POSTS

4 years ago

#23

Canada has a tax treaty with Mexico but if you are a resident of Mexico, you are supposed to file a tax return whether or not you earned income in Mexico - people may not do that and the Mexican gov't doesn't seem to care but I don't know the exact situation. Check it out.

wnnamove New member

5POSTS

4 years ago

#24

I talked with the Mexican consulate in my area, Dallas. They stated Social Security income was not taxed. All other income will be taxed. I was inquiring about PR and TR visas. I will fill out a Mexico tax report when needed. I will double-check about the Social Security income issue. I want to meet all Mexican tax requirements.

I am pleased there is a tax treaty with Canada.