Tax on Timeshare Rentals [in Mexico]

[KAS33]

I have recently read that Mexico collects tax on the rental of timeshares. It may also collect a VAT tax. My wife and I have an upscale unit at Vidanta in Mexico and we are trying to rent it. We want to be certain that we price it so that we at least recover our costs after taxes are withheld. Can anyone explain the details of the RFC tax and provide guidance as to how one can best handle remittance of the tax? I want to make sure that we do not pay more than necessary. Thanks. Ken

 

[pittle]

We do not rent our units, but when we rented a place in Puerto Penasco in May, we did have an extra tax on it that was not there years ago when we rented. It was added after all other fees. It is added to everything, including groceries in Mexico - it is 16%.

When we did a VRBO a few years ago, that was not added, but I also read that that has to be added to the rental price, and it was on the one in May. I found this by just doing a search.

VAT in Mexico - 2022 Procedure
Sep 21, 2022The VAT in Mexico (locally known as IVA) is payable at a general rate of 16% on the sales of products and services. The VAT also applies to lease payments and imports of products and services.

 

[KAS33]

Thanks.

 

[KAS33]

I looked at the photos. You own in all of those resorts? I assume you rent them out. If so, what source do you use for rentals.

 

[bjones9942]

I always suggest that people seek professional advise for medical, legal, and financial issues. People on the internet are full of bad, bad advice that they're eager to disseminate. They may be well meaning, but do you really want to entrust your finances to someone who 'isn't a real tax accountant, but plays one on the internet'?

 

[DeniseM]

Very few accounts will be able to advise on TS taxes in Mexico - not to mention the cost.

 

[pittle]

I looked at the photos. You own in all of those resorts? I assume you rent them out. If so, what source do you use for rentals.

We do not rent our places. We have owned several places over the years and had enough weeks to take extended family with us and when we lived in Kansas and Missouri, we needed weeks to escape the cold in February.

We buy where we want to go and go there. We did some exchanges early on in out timeshare journey. The majority of those you saw are at the various Vidanta properties over the past 22 years when we owned as many as 6 weeks of Vidanta properties for a long time and used them pretty much every year.

We are now just down to 4 registered weeks each year - 2 Grand Luxxe, 1 Buganvilias, and 1 Pueblo Bonito Emerald Bay

 

[Eric B]

I always suggest that people seek professional advise for medical, legal, and financial issues. People on the internet are full of bad, bad advice that they're eager to disseminate. They may be well meaning, but do you really want to entrust your finances to someone who 'isn't a real tax accountant, but plays one on the internet'?

What about people that advise seeking actual professional advice? That’s what I typically disseminate….

 

[bjones9942]

Very few accounts will be able to advise on TS taxes in Mexico - not to mention the cost.

That's not true. There are a LOT of accountants you can hire IN México, and there are plenty in the USA/Canada that deal with international matters (for a higher fee). Email, phone calls, Zoom meetings - you don't have to physically be where the professional is located to get advise. And the cost is a one time deal, and might be deductible from taxes. Better than bad advise from 'the interwebs'.

 

[dkduval]

I have recently read that Mexico collects tax on the rental of timeshares. It may also collect a VAT tax. My wife and I have an upscale unit at Vidanta in Mexico and we are trying to rent it. We want to be certain that we price it so that we at least recover our costs after taxes are withheld. Can anyone explain the details of the RFC tax and provide guidance as to how one can best handle remittance of the tax? I want to make sure that we do not pay more than necessary. Thanks. Ken

Hi Ken,

I was just going to rent my Vidanta week on VRBO and it seems that they require an RFC tax number. Do you have any further information on this, or have you found sites to list where this is not required?