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US and Mexican Taxation for American Taxpayers in Mexico Mexican Taxes on Rental Income - What are those taxes? What are the penalties if you fail to pay those taxes? Posted: 18 Oct 2015 09:50 AM PDT If you rent your real estate in Mexico full time or part time when not using it the income you make is subject to several rental taxes in Mexico. This applies to owners who are residents and nonresidents. These taxes also apply to rental of your timeshare.  Failure to pay all applicable taxes can result in severe penalties. The following examples explain the taxes and penalties you will incur for ignoring Mexican tax laws: Example 1.  Bill and his wife Sarah rent out their  condominium in San Jose for 5-6 months out of the year on a weekly or monthly basis to tourists.  Though they report their rental income and expenses on their US tax return, they have never paid any taxes on that rental income to the Mexican tax authorities.  Their neighbors have told them not to worry, since no one ever pays taxes on vacation rental income in Mexico and probably do not have to.     Is this actually true?  No!  Definitely not!   Bill and his wife must pay taxes on their income which is generated in Mexico! What kind of taxes should they be paying and how much?.  They must pay the ISR tax, a type of income tax, in the amount of 25% of the gross rents and, if the unit is furnished,  a 16% Value Added Tax (IVA). An important point  The ISR TAX they pay can become a tax credit in the US, so double taxation is avoided.   The 16% IVA tax is generally paid by the tenant and is simply declared by the landlord. What are the penalties, interest, etc. they might incur?  The penalty for not being enrolled as a taxpayer is 2,740. to 8,230 pesos.   The penalty for not making declarations as required range from 1,100. pesos to 13,720. pesos per month in addition to interest for not paying on time and as required is 1.13% per month. Are there any other possible legal consequences for failing to pay taxes on rental income from their condominium?   If the tax authorities have not discovered the illegal rental income and notified the landlords, back interest and penalties may be waived..   It is important, however,  to begin declaring and paying prior to discovery. Example 2.  Phil owns a home in Cabo San Lucas.   He leases it to a Timeshare salesperson on a yearly basis.  The renter pays the monthly rent directly to Phil's US bank account and no money is paid in Mexico.  Does Phil have to pay taxes on that income in Mexico?. Absolutely!  Phil has an obligation to pay taxes on any income generated on property located in Mexico. What are the taxes and when are they due?.  Phil must pay the ISR tax, a type of income tax, in the amount of 25% of the gross rents and, if the unit is furnished,  a 16% Value Added Tax (IVA). What are the consequences of failing to report the rental income in Mexico? Much the same as Bill and his wife in the example above, Phil will be liable for not being enrolled as a taxpayer which can cost him 2,740. to 8,230 pesos.   The penalty for not making declarations as required range from 1,100. pesos to 13,720. pesos per month in addition to interest for not paying on time and as required is 1.13% per month.  The amount of the penalty may depend upon whether or not this is a first violation for Phil. Should he go back and pay in those taxes for past years when he failed to pay the taxes?   If the Mexico tax authorities have not notified Phil he is in violation of the tax code, he probably will not need to file back taxes.   The important point is to begin and to be consistent in the future. Since Phil is a nonresident and does not have a factura number, how can he pay taxes?  Phil must appoint a Mexican company or an individual to be responsible for the retention and the filing of these taxes.    His official representative will issue the correct invoice or factura. Example 3.  The Smiths normally do not rent out their home in Todos Santos.  But since they are taking a 2 month tour of Europe they are renting it out for $3500 per month for two months. Do they have an obligation to report this rental income to the SAT?  Yes, they have an obligation to report and pay taxes on any income generated from property located in Mexico.   They are permanent residents of Mexico, and Canadian Citizens.  They also do not report any of their other income earned in Canada in Mexico.  It is now a year later and they have learned that rental income must be reported and taxes must be paid on it.  How much tax will they owe?     Technically they owe $875. USD, plus 16% IVA. What will be the penalties for failing to report that income on a timely basis? Penalties could be as listed above.    Want to know more about rental taxes in Mexico or locate an experienced rental tax service to handle those taxes for you? Email us at: HELP WITH RENTAL TAXES ON MY MEXICAN RENTAL

Gordo Banks Pangas Cabo Fishing Report October 3rd Date Published: 10/6/2015 Author: iTravel Cabo With the summer season now officially over we have started the busy Fall Season. Weather remained calm in the Eastern Pacific through most of the week, no rain until Saturday, when the remnants of Hurricane Marty swept by and left scattered thundershowers and wind gusts to 30 mile per hours in certain isolated areas, by later in the day conditions settled down and that seemed to be the end of this system. Heat index still over 100 degrees, with very high humidity. The climate should become more comfortable in the coming weeks. We were closely watching the development of Hurricane Marty far to the south early in the week, this system quickly dissipated mid-week, after slowly progressing through apparently unfavorable environment for further strengthening and for progressing northward. A great thing for us, we hope these storms continue to go elsewhere, we expect in several more weeks the chances of any further tropical storm activity will be slim, though with these strong El Niño conditions you never really know what might happen.

Alaska Airlines Starts Service from Orange County to Los Cabos, MexicoFares as Low as $139* One Way to Celebrate the New Service. SEATTLE, Oct. 8, 2015 /PRNewswire/ -- Alaska Airlines today begins nonstop service from Orange County, California, to Los Cabos, Mexico. The flights are year-round and will operate four-times a week.

Drinking Tequila Can Help You Lose Weight, According To Scientists By Maria G. Valdez | Sep 08 2015, 03:37PM  You won't believe why drinking tequila might actually help you lose weight. Shutterstock/ Igor Normann Well, isn’t this a marvelous thing? According to a 2014 study by the American Chemical Society (ACS), sugars found in the plant that makes tequila could lower blood glucose levels for people with type 2 diabetes, and help obese people lose weight, researchers say. According to the study, Agavins, a natural form of sugar found in the agave plant, are non-digestible and can act as a dietary fiber, so they would not raise blood glucose. They are different from the commonly known agave syrup, which is actually very similar to the dangerous high-fructose corn syrup.

Southwest Airlines Soon to Offer New Flights Travel to Puerto Vallarta or Cabo San Lucas this October. BY MARIANELLA ORLANDO 9/15/2015 AT 8:00AM 6014 El Arco de Cabo San Lucas in the Baja California Peninsula IMAGE: SHUTTERSTOCK The time has come, fellow Wanderlust-ers. Southwest Airlines will soon begin servicing international flights from Hobby International Airport to several new destinations in Mexico.

We just ditched our crazy, work-obsessed American lives to build a dream life in Mexico.Resize Text Print Article Comments 26 By Melissa Heisler September 16 After arriving at the home of our friend in Cabo San Lucas, Mexico. Photo courtesy of Melissa HeislerHow far would you go to have the life in paradise you really desire?

Hotel Opening Los Cabos Hyatt Ziva Los Cabos Reopens in San José Del Cabo September, 16 2015 Hyatt Hyatt Ziva Los Cabos Yesterday, Hyatt Ziva Los Cabos reopened its doors to guests in San José del Cabo, Mexico, following Hurricane Odile last year. Hyatt Ziva Los Cabos has been transformed, and now features a newly redesigned open air lobby, 591 suites, including 34 swim-up suites, 12 unique restaurants, bars and lounges offering cuisines from around the world, and a KidZ Club with water park. The reimagined all inclusive resort draws architectural inspiration from its Baja surroundings and the region’s history with stunning Mexican craftsmanship, which includes artwork, ceramics and ancient cave petroglyphs that are native to Baja California.

Wedding Bliss in Cabo San Lucas A fun-loving couple takes the leap in sunny Mexico BY COLLEEN MCNAMARA SEPTEMBER 11, 2015 Sheila and Esteban met while Sheila was vacationing in Cabo in 2012. Though Sheila was from Vancouver, and Esteban from Cabo, they dove into life together head first. Fast forward three years and their love story has come full circle. The couple said their “I do’s” at an intimate sunset ceremony in Palmilla this summer.

TRAVEL Headed to Mexico? 8 money tips Sept. 3, 2015 Updated Sept. 6, 2015 8:28 a.m. Marla Jo Fisher and her traveling companions have breakfast at the Hotel Oasis in Loreto, Baja California Sur, Mexico. There are American chains in Mexico, but locally owned hotels and guesthouses are cheaper.MARLA JO FISHER, STAFF BY MARLA JO FISHER / STAFF COLUMNIST FACEBOOK TWITTER EMAIL COMMENTS PRINT SEND PDF Mexico remains one of my favorite vacation destinations, even though the country has issues that can’t be ignored.

The Top 10 Restaurants in Los Cabos Situated at the Southern tip of Baja Califorina in Mexico, Los Cabos is a tourist hotspot rapidly growing in popularity. Its idyllic geographical location, a spot where golden desert meets shimmering sea, has deliciously influenced the cuisine on offer here, with most dishes incorporating fresh local seafood. The two towns which form the Los Cabos region, Cabo San Lucas and San José del Cabo, offer many diverse options in which to sample a variety of tasty food options. Here is our list of the ten best restaurants in Los Cabos.