Tax Law in Cozumel
Tax planning, disputes, audits and tax compliance legal services
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Frequently Asked Questions
Do I owe Mexican taxes on my vacation rental income?
Yes, all rental income earned in Mexico is taxable by SAT, even if you're not a Mexican resident. Tax rate is approximately 25-30% of net income after deductions. Many foreign owners fail to file and face penalties when caught. A tax lawyer and accountant set up proper reporting and minimize tax liability through legal deductions.
What happens if I haven't filed Mexican tax returns?
SAT can assess back taxes, penalties (up to 150% of tax owed), and interest. However, voluntary disclosure before audit typically reduces penalties significantly. A tax lawyer negotiates payment plans ($1,000-50,000+ MXN depending on amount owed) and penalty reductions. Don't ignore - SAT is increasing enforcement, especially for vacation rental income.
Do US/Canadian citizens pay taxes in both countries?
You must file in both countries, but tax treaties usually prevent double taxation through foreign tax credits. Mexico taxes worldwide income for residents, territorial income for non-residents. US taxes worldwide income for citizens. Coordination between countries is complex - work with tax professionals experienced in both systems to minimize total tax burden.
How can I reduce my Mexican tax liability legally?
Legal strategies include incorporating your business for lower rates, maximizing allowable deductions (property expenses, maintenance, management fees), timing income and expenses strategically, using available tax credits, and proper structure for property ownership. A tax lawyer and accountant develop personalized tax minimization strategies. Avoid illegal evasion schemes.
What should I do if I receive a SAT audit notice?
Contact a tax lawyer immediately - response deadlines are strict. Gather all financial records and documentation. Do not communicate directly with SAT without attorney guidance. Lawyers negotiate with auditors, challenge incorrect assessments, and ensure your rights are protected. Many audits resolve through documentation without penalties if handled properly.
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