19% vacation rental tax
Posted by Jane  on January 5, 2015, 10:34 pm|
Hola. i am wondering if this new 19% vacation rental tax is being charged across the board in La Manz. I do not see it listed on most rental web sites; perhaps it is hidden in increased rental fees? I would appreciate any thoughts on this as I am confused. Thank you.
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------------------------Re: 19% vacation rental tax
Posted by Pablo on January 5, 2015, 10:49 pm, in reply to "19% vacation rental tax"
96.50.109.80|
Has the tax gone up lately to 19% then? We booked back in May for our rental in Feb. At that time, the quoted price included 16% accommodation tax and we've heard no different. Our experience over the past few years renting is that the tax is charged separately and not usually included in the rental price listed (although I think there may be a few exceptions). We've always had to make enquiries to be sure of the final price because one doesn't always know whether the tax is or is not included.
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------------------------Re: 19% vacation rental tax
Posted by eileen on January 6, 2015, 7:37 am, in reply to "Re: 19% vacation rental tax"
201.138.176.181|
It is 16% or 17%, I believe, and I include it my price as do most landlords and ladies; it's much easier. I did have to raise my prices because of it.
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------------------------Re: 19% vacation rental tax
Posted by Larry F on January 6, 2015, 8:42 am, in reply to "Re: 19% vacation rental tax"
187.148.169.228
Most people who have stayed in a hotel in Mexico will be aware of the IVA (value added) tax of 16% added onto the bill. I understand that there is also a state tax of 3% added in Jalisco. In some cases the hotel will state that it is built into the cost of the room, particularly at all- inclusive resorts. This tax applies to most services, including restaurants. You'll see it added to your food bill.
So why are some people in La Manzanilla paying this tax on their vacation rental and some aren't? Why is nobody paying the IVA tax in restaurants here?
The answer is hard to find, as many facts of law in Mexico are. Mexico changed it's tax laws in January, 2014.The general effect of these changes was to require the use of electronic receipts (facturas) for all taxable tranactions. Most vacation rental owners in La Manzanilla don't know, or choose not to know, that they have to pay taxes to the Mexican tax authority (SAT) on their rental income. As such, they must be registered with SAT and have a tax number. The landlord submits the taxes, along with their income tax, to SAT electronically.
If the renter is concerned about the legitimacy of these added taxes, they can ask the rental owner for a receipt that indicates their RFC tax number on it. If they don't have that number, they likely are not submitting the tax.
Now here is the really confusing part. My accountant tells me that in areas like La Manzanilla, it is not yet a requirement that service industries collect the IVA tax. That is one of the reasons no restaurants in town add the IVA. The bottom line is that some vacation rentals charge this tax and most don't. I'm not suggesting that those that do are doing so illegally, but there does appear to be confusion around whether or not they actually need to be collecting it.
It's kinda like the new law on licensing foreign-plated cars. There are many answers to the same question. None are right and none are wrong.
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------------------------Re: 19% vacation rental tax
Posted by Jane on January 6, 2015, 11:03 pm, in reply to "Re: 19% vacation rental tax"
Thank you for your responses, I am not sure I am less confused but now I know I am not alone in my confusion 
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------------------------Re: 19% vacation rental tax
Posted by Larry F on January 7, 2015, 7:55 am, in reply to "Re: 19% vacation rental tax"
187.148.169.228
If you are confused, just imagine what it is like for the small business owner. Much of Mexico, particularly in the rural areas, operate on a cash-only basis. These mom and pop businesses don't officially exist and don't pay taxes. If they charge you tax, then they need to get a tax number and submit taxes. This involves much paperwork, and they don't want to do that, or can't.
Only those with a clear mind, lots of time, good research skills and money to pay "experts" can possibly figure out how to abide by Mexican tax laws. As far as vacations rentals are concerned, some do and most don't. But the vacationer could care less about all this, as long as they get a nice place to stay at a price they can afford. And they don't want surprises. If a vacation rental does not say that a value added tax will be charged, then it should not added on. I have yet to find a local rental ad that states that an IVA tax will be added. If it isn't, then I would rightfully assume that it is included in the price.
If in doubt, ask.
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------------------------Re: 19% vacation rental tax
Posted by Pablo on January 7, 2015, 9:13 pm, in reply to "Re: 19% vacation rental tax"
96.50.109.80
Yes, thank you Eileen and especially Larry for the explanations. I think I understand a little better myself now. We've rented from Eileen before (hola & see you pronto!) and were aware that any tax is included in her listed prices. And yes, there never seems to be any mention of the tax on the rental websites. I know this year, we got a big shock on the total rental cost, not knowing that the tax had risen from 5% (that we paid a year earlier) to 16%. In this case, it ended up being $520US extra for tax, so not chump change (big place for a big group of us). So, as Larry advises, you pretty much have to find out from the lister what the total price will be.
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------------------------Re: 19% vacation rental tax
Posted by Larry F on January 8, 2015, 9:14 am, in reply to "Re: 19% vacation rental tax"
187.148.169.228
Maybe the final word on this. The IVA tax in most of Mexico has always been 16%, but did rise 5% from 11% in some areas such as border areas.
There are two taxes that the government expects from the owner of a holiday rental. There is income tax, which has nothing to do with the guest, and there is the IVA and state hospitality taxes. The ad for the rental should state clearly that there will be these taxes added to the cost of the rental. Otherwise, the guest should assume that it is included in the price.
Holiday rental owners in this area might want to check with their accountants to see if they are really supposed to be collecting the IVA tax at this time.
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