Personal Taxation, Mexico

About a month ago I received permission from immigration to offer professional services in "forma independiente," allowing me to take any offers of employment and make any contracts for my services that I care to enter into, in the same manner as a Mexican citizen, so long as it is confined to my profession; that is, teaching English. All well and good, but...

Anywhere you work and make money you've got to deal with the tax man, and Mexico is no exception; so, I dutifully marched down to the main office of S.A.T., Servicio de Administracion Tributaria, which you can find on Av. Bonampak, below the bullring. Following my new found formula for avoiding lines, I went at around 11 AM. There was one person in line, ahead of me, when I arrived. I told the lady there that I wanted to get a tax number. She let me know this is done online, after which I can request an appointment to complete the process. I picked up a couple of brochures, and left.

Today, I completed the online process to get a tax number. It took a while, as you get "red lights" until the computer is satisfied with your input but, all in all, it was a pretty amazing experience.

The S.A.T. website is loaded with tutorials and other aids to getting your taxes paid as they should be. It appears you can do everything on line, which is really impressive to me. At the conclusion of the registration process, I was given a list of "reminders" of what and when to file, and a cite to another link which I could use to make the appointment necessary to complete the process.

For years I've been doing my own, and others, tax returns. I'm one of the odd people who actually enjoy doing tax returns- and dealing with bureaucracies- so it's my intention to let those who might like to learn more about what it's like, and how it may work, to read about my experiences with the system, here.

[Caveat: most of the detailed information on the website is in Spanish, so it's not suitable for everyone to make this a do-it-yourself project.]

As for dealing with bureaucracies, I had almost reached a saturation point earlier this month, and needed to take a few deep breaths, myself, facing the need to file a change of address with immigration (almost as complex as applying for an original V. Rentista); the need to register with the tax authorities; and, the need (personal Desire) to complete the registration process with IMSS. It's easy to see where people who were very busy with their work could begin to feel overwhelmed by the many processes that must be monitored, and accomplished, month by month, and year by year for those who seek to live a full life, here, most of which involve using the Spanish Language, which can add to the burden, especially in the beginning. The saving grace, so far, is that most of the people I've had to deal with in the government agencies have been from "indifferent, but businesslike", to "engaged and helpful".

 

Thanks for the tip, Steve! There goes the "computer age" image of the S.A.T. right out the window! Suppose the moto boys work on a commission?
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It looks like the first report due from me will be the 17th of Feb.

V.

 

Banking, Mexico

Banks are a pain in the butt in any country but I suspect I'm going to need bank account, at some point. Here's a question for those familiar with what I may need.

If I have wages paid to me, and receipts for personal service fees collected; plus, business expenses to pay, what kind of bank account will I need?

Which banks have you found to offer the best combination of low fees and services?

There are three, very near me- HSBC, Banamex and Bancomer.

 

I think unless you have a constituted/registered business, the only sort of account you'll be able to open is a personal one, as any business account would require said business to already be established.

As for the selection of banks, in my experience they all suck.. but HSBC has the best hours and somewhat shorter lines on average. Santandar has the fewest ATM's, but they do have a deal with Bank of America that allows for free withdrawals from US BofA accounts, which can cut down on the atrocious "international withdraw/international Visa service" fees that were costing me upwards of $50 a month before I opened a BofA account last year.

Keep in mind that the banks here tend to feel like they are doing people a favor by allowing them the privilege of holding an account, as opposed to valuing your business. So don't be surprised when they don't grace you will good service or reasonable support when you experience problems.

I also had a bad experience with Bancomer a few years back after one of their ATM's stole 5,000 pesos from me. (didn't give the money, but reported it as withdrawn to my bank) Went in the next morning when they opened and the bank manager basically told me to go f@$# myself, and denied any problems with their machine, even though they had a technician working on that very machine when I walked in. "Routine maintenance" he claimed. Would not even give me anything to show my bank that I had reported it with them. So basically I'll never use their machines again or recommend them to anyone. I'll also point out that they seem to always have the longest, slowest lines when I've been forced to make a deposit at one of their branches.

 

We've had terrible experiences with Bancomer, to the point of filing a formal complaint against them with the govt office that oversees banks. We had people at all levels of management at Bancomer lie to us and mislead us about our rights and about their responsibilities to us. They should rename that bank to Snowjob.

HSBC is a rotten bank too imho, but they do have better hours than others and they never actually lied outright to us.

I have no experience with Banamex.

If I had to have an account here it would be with Santander because of their relationship with BoA. And because the limited experiences I've had with them have been all good.

I think that in general Mexican banks take the attitude that the customer is always wrong. And, as Life said, they feel they are doing you a favor for letting you bank with them.

I disagree that banks in any country are a pain. My local bank in Colorado treats me like a queen and always has. The tellers are given a good amount of power and can solve many problems without speaking to a manager. They are gracious and nice and seem honored to have me banking with them.

It is possible to run a bank in such a way that the customer is appreciated, it's just not something I've ever seen in Mexico. And perhaps, like many situations here, the Mexicans don't complain enough and don't know to expect better treatment.

 

Thank you both, for the helpful replies. I've assumed that I would have to have a bank account. In this, I'm making two assumptions, 1) that my university would pay me into a bank account, rather than in cash; and, 2) that some operations would have to done through banks in order to comply with the requirements of the tax authorities. Perhaps both assumptions are unwarranted. Perhaps it's common to be paid in cash by institutional employers, and perhaps- given adequate records of monies received, and payments made- ordinary business can be conducted in cash.

What's the truth of it?

 

1) Would depend entirely on what they offer, and you shouldn't automatically expect direct deposit to be an option. Even if it is it likely requires that you have the same bank.

2) I've never heard anything that suggests transactions have to go thru a bank to be legal. If you are so adamant about paying every possible tax and filing as many returns and declarations as possible then I doubt that a bank would need to be involved. In fact involving banks will undoubtedly result in more filings to be made, especially if you go over the $20,000 pesos deposit limit during a month's time (or whatever the amount is) that triggers the automatic tax deductions from your balance. (regardless of the source of those funds apparently)

 

Hi, Life, I would like to keep everything absolutely as simple as possible, and do only what's necessary to satisfy the tax man: I'd just as soon not have a bank account, unless I have to, but I suspect some of my clients will want to pay by bank transfer, their account to mine; and, I may want to pay some of my accounts payable in the same way, if that's the norm, here.