INM Continues to Increase Enforcement of Restrictions on 6 Month “Tourist” Visas & Taxable Income

Sept. 7, 2017 Update

For people who do not track multiple expat forums from around Mexico, there are some real-world updates  that are worth noting regarding both ~ taxes on Mexican sourced income~ and on “tourist” visas.

Example:  An acquaintance who has spent the few past winters in Yucatan as a snow bird, reports that he was unable to get a 180-day visa in Mexico City this time.
…  “For the first time flew into Mexico City during my recent trip to the States, and immigration stopped me from coming through as they said I could not stay for 180 days on a tourist visa. In Cancun, they have approved every time. Mexico City held me for 2-3 hours causing me to miss my connection [to Merida] and
~ having to sleep overnight in the airport ~ . ”

Since their 2012 rule changes, INM has been gradually cracking down on foreigners’ abuses of “tourist” 180 day Visitante visas.   INM’s general policy is that if we are frequently living in Mexico, even part-time, and that if we are working in Mexico (especially if we are renting out our Mexican property for income),  then we really must

1.  Get a Residency Visa  … either a Residente Temporal or Residente Permanente Visa
See ~ Current Rules and Procedures for Immigration, Visiting, and Staying in Mexico

2.  If we have Mexican sourced income, we must register with SAT/Hacienda by getting an RFC number
and
3.  We must report that income from Mexico & pay taxes on it.

A recent first-hand report from a popular expat forum described some dramatic new shifts in enforcement of INM immigration & SAT tax regulations:

A couple, which has been “coming and going on 180 day tourist permits (FMMs)”: technically not a “tourist permit”, but permission to be in Mexico, but not to work in Mexico, for a short period of up to 180 days] for several years” got off the plane recently, “they were then asked to step into the interrogation room and to hand over their phone and laptop, along with the password for their email. “

They hold an on-line job from outside of Mexico. They were questioned about where they live, how long and what was their source of income. The agent then discovered an email on the computer that was an exchange regarding a VBRO email. It was a rental confirmation for a house that they manage for a Canadian friend. The money went into a Canadian account but as far as he was concerned they had income in Mexico.

The lecture they got included three main points. They had been residing in Mexico on FMMs intended for Tourists. They would need a Resident Visa to stay in Mexico. They were not permitted to work in Mexico. ´Managing´ Mexican property is a lucrative activity. Lastly they would be responsible for paying tax on the rental income. [Although given a 30-day tourist permit, if they wished to return, the immigration officer said they would need “to visit a Mexican Consulate and apply for residency.

This report describes the increase in several trends of the Mexican Government no longer tolerating foreigners breaking Mexican laws.

1.  As Mexico’s INM, SAT / Hacinda / Aduana agencies gradually get all their local office computers connected to national databases, individual government agents (including clerks) can now pull up our personal records of past entrances & exits from Mexico and our past import/export & income generating activities, including violations of Mexican law.

2. The report (and many other similar recent internet reports by expats & ‘tourists’)  pretty clearly shows that some INM airport offices now are more closely scrutinizing foreigners trying to get 180 Day “tourist” Visitante visas when flying-into Mexico.

3.  INM no longer presumes  that foreigners are somehow entitled to automatically stay up to 6 months on a “tourist” Visitante visa simply because they exited & then returned to Mexico.

4.  We can no longer assume that INM & SAT/Hacienda will not track down income foreigners get from lucrative activities in Mexico.   This includes operating rentals or even managing rentals, pet sitting, house sitting,  etc.

5.  People who intend to earn Mexican sourced income need to get visas that allow working in Mexico:   Visitante con Permiso de Trabajo …  Residente Temporal with permission to participate in lucrative activities (like working or earning rental income) … and Residente Permanente visas.   These visas must be applied for outside Mexico at your local Mexican Consulate … and yes, some Consulates (like Laredo, San Antonio, Chicago, Portland & Phoenix) are far more friendly~lenient in granting these visas than the Mexican Consulates in California, Houston, Boston, et al.

See ~ Current Rules and Procedures for Immigration, Visiting, and Staying in Mexico

Note that foreigners who own real estate & rent it out …  owe 25% taxes (“without deduction”) on the rental income.   Details at:
http://www.sat.gob.mx/english/Paginas/English/how_do_foreigners_pay_taxes.aspx

6.  Foreigners who get visas that allow them to work must also register their work with SAT / Hacienda, reporting income using their RFCs.  Note that the RFC’s generated by Mexican banks are generally not valid for use for reporting & paying taxes on Mexican sourced income.

Happy Trails
… and …

Keep doing your best to color inside the lines,
steve

*     *     *     *
Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
© Steven M. Fry

Read-on MacDuff . . .

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37 Responses to INM Continues to Increase Enforcement of Restrictions on 6 Month “Tourist” Visas & Taxable Income

  1. Thank you for this update . I for one am really happy that the Mexico is beginning to wake up . There are so many people out there making an income and not declaring

    • yucalandia says:

      Our hope is that increased more-effective enforcement of the laws will reduce the

      YAY … We’re in Disney-Land … No rules for us!

      ways that too many gringos act.

      Mexico has a solid shot at having a healthy economy & good society, but that means people ~including visitors/guests~ stop cheating & instead pull their weight.

      Incremental changes can be the way.
      steve

      • Ed says:

        Totally agree. I am more than sick of the entitled “Americans” who come down here and think they are above the law, culture, and customs of Mexico…which is exactly why I left the US to move and live here.

    • Ed says:

      Amen. The US dropped the ball on this long ago which has contributed to the myriad of problems there.

  2. mounddweller says:

    In your blog post you mentioned San Antonio being known as being easier to deal with regarding visa applications. What is your basis for this statement? Not wanting to be argumentative, just wanting some more background information before I plan a trip to San Antonio to apply for a permanent visa. Tried contacting the consulate in Dallas but got no response. Any additional information you can provide is greatly appreciated. Thanks!

    • yucalandia says:

      Americans who have used the Mexican Consulate in San Antonio have reported that the office was helpful, followed SRE’s published immigration law, and that they accept any proven monthly deposit income for qualifying for either RP or RT visas.

      Boston & California Consulates frequently add special local extra (difficult to meet) requirements that do not exist in Mex. Gob. law as published in the D.O.F.

  3. Ron Williams says:

    Sad that you even have to post this. I am disgusted by how many Americans just drive into Mexico and don’t even bother to get a visa of any kind. These changes have been around for a long time. Mexico is a very inexpensive place to visit and work, yet most Americans I meet seem to think “they owe us”.

  4. Don Juan says:

    What the F**k are you talking about? F**k the government and their “tax” extortion! You fking slave

    • yucalandia says:

      Normally, we delete things like this …. but it’s important to publicly identify the Don Juan … aka Mohamad Hasm of dskjdf@_mail as the fine individual he is.

      • Ed says:

        Mohamed Hasm. LMAO. That explains everything we need to know. I hope we (Mexico) never, NEVER, ever, EVER lets Muslims come here. Just look what they have done to France, Germany, Italy, UK, Europe, USA, etc. Once they take over, it will all be over. STAY STRONG and STAY PROUD MEXICO!!!

  5. Sheila Johnson says:

    Things are changing all of the time. This year I spent three months trying to get an appt. in Chicago to start the visa process but was unable to. I went in person and she told me three times that just because I completed all of the requirements did not mean I would get a visa. It would all depends on a personal interview with her. She had no time to talk to me, all appts. had to be made online but she wouldn’t respond to my emails. She didn’t have time to talk to me on the phone. Then she finally made me one but then cancelled it without my knowledge.

  6. Pangur Ban says:

    Nice to see Mexicans finally understanding what Americans have been dealing with for decades. Cudos. Those economic migrants can certainly put a strain on the economy.

    P.S. You might want to delete Don Juan’s email since, when leaving a reply, it states that your email will never be made public. This could leave what you did actionable in a court of law.

  7. empressofeado says:

    I have a temporal visa and want to do Airbnb for just my spare room. Do I need to go back to where I got my original visa and ask for permission to do so? I don’t mind paying taxes as I paid heavy hotel taxes where I Airbnb’ed in the States. I’m sure when I start there will be resources to tell me where and what to pay. I just want to make sure I have permission. I am a guest here after all.

  8. Hola,
    For the amnesty process, do you know if you still have to initiate the process outside of Mexico? Or, what office do you go to, to begin that process of obtaining a temporary residence?
    Thank you for this helpful information!

    • Donna says:

      I had to start in the US at the mexican consulate, 2 years ago. It wasn’t difficult but all my research indicated I would need a temporary residence for 4 years before I could get the permanent so that was my intent. I had just recently purchased a US plated vehicle from an expat who was going from TR to permanent and would not be allowed to drive a foreign plated vehicle. The vehicle was in a mexico. Once I presented my documents I was automatically granted permanent, probably because I owned a home, had a professional career and would not be a burden financially to Mexico. I was stressed because that meant I would have to deal with getting rid of the vehicle I just purchased. After explaining my case, the officer granted me temporary but thoughts my reason was not smart. He was right. In the long run, it will cost me a lot more money. Had I realized that clause that owning a home almost always gets you permanent, I would have processed differently. I now own. Mexican plated vehicle and a US plated that needs to get out if the country or be did to an expat.

      • Terri says:

        Lucky you – we are still on our temporary resident permits because they would not grant us permanent status right away, even though we owned two homes outright, with a guaranteed social security income, a second monthly pension, and other retirement assets besides.

  9. Gavan@samerica.com Connell says:

    We found a local accountant that does our tax. It can be complicated but he does it all. You have to register your ‘business’ and usually attach it to a credit card if you want to claim deductions. All purchases have to be made on that card or by cash if under $2000mxn. Only ‘facturas’ are deductible. You need an RFC with three letters or numbers at the end, not just the usual RFC.

  10. Lindenlee says:

    What are the Mexican taxes, percentage-wise, on rental property? Just a ballpark figure.

  11. Donna says:

    I am a TR of Mexico and I asked for no work permit because my Spanish is not good enough and I have retirement income. I have 2 years left before I can apply for permanent. Recently I purchased another home and working on selling my first house. In the meantime, I do have renters in the first house. I know INM will not just give me permanent because I asked after my first year ad they said I had To go 3 more years of temporary before I could get permanent. I am not trying to break any laws but I am hoping the house sells soon and that will be behind me.

  12. Lionel says:

    That “first hand report from a popular expat forum” sounds a bit fishy. Where was that originally posted?

  13. Amy Whitney says:

    I have a question… I’ve decided I want to stay in Mexico. My husband and I have almost spent one year here, aside from the two trips to renew our tourist visa and visit family in Canada.

    We have a website that sells courses online. It’s not incorporated, it’s taxed as sole-proprietor income. Everything is registered in Canada at this point, including the bank account which our earnings are transferred to.

    Canada is saying we need to pay tax to Mexico, because of the tax treaty and we have spent more than 183 days in Mexico. I have no problem paying tax to Mexico but I’m not allowed to earn money in Mexico.

    I spoke with an immigration advisor in Mexico and she said there’s no reason for me to pay tax to Mexico because everything is based in Canada.

    I’m not really earning money in Mexico… I am physically in Mexico and working on my computer (working for myself) but I am not selling anything to anyone in Mexico, employing Mexicans or working for a Mexican company. It’s kind of like freelancing.

    I’m sure there are others in this position. Any advice about who to talk to or which visa I should look into applying for? I feel like I’m in the gray area of a non-tangible business located wherever the internet may take me 😉 Thanks!

    • yucalandia says:

      Hi Amy,
      Excellent questions. Since your tax responsibilities are determined by the Mexico-Canada tax treaty, the only advice you accept is from experts familiar with both the treaty and how it works (precedents).

      Do you trust the expertise of the Canadian who quoted the “183 day” half year limit? Is it possible that you need to have a business registered in Canada that pays the taxes?

      I would not trust random Mexican tax people, unless they have a lot of expertise in the Mexico-Canada tax treaty.

      If the Canada tax authority will not accept your payments, then you need to get out of Mexico to a Consulate, and apply for a visa that allows you to work in Mexico.

      Happy Trails,
      steve

  14. Amy Whitney says:

    The interesting thing is about the people I spoke to about the taxes was that they all initially said I should pay taxes to Mexico (because of the 183 days or more per year here), but then after explaining the banking, the domain being registered in Canada, mailing address etc. they said it was okay to continue paying taxes to Canada. I spoke to the Canada Revenue Agency, my accountant that I’ve been using for years and also an immigration accountant who does this for a living. The person I spoke with in Mexico is an immigration consultant that seems pretty reputable.

    Last year, I was able to play the ‘temporary tourist without a plan’ card, but this year, I’ve spent my whole year in Mexico and feel that I need to have some solid answers to move forward confidently.

    Speaking with the consolute, it didn’t seem very promising that I’d be able to get a working visa. I don’t have university credentials which seems to be something they require for a work visa that is not sponsored by a specific company. It would be easy for me to get a sponsorship for a work visa, but that limits me only to earn income from that particular company.

    Yes, it’s complicated living between the clear rules. However, I’m sure I can ask more specific questions about making it a Mexican company or doing whatever I need to do. It sounds like a few appointments with accountants, business lawyers and immigration specialists are in order.

    • sdibaja says:

      I suggest you look closely at the option of forming a Mx. Corp.
      The benefits are many, the downside is minimal.
      Key: find a active Mexican accountant that also regularly deals with employee and real estate transfers. Interview several. They can direct an Atty. to correctly setup a corp that works for you now, and later also helps with immigration and home ownership (the real kind, not rented land)
      It has worked very well for me.
      I never needed to show income for my FM renewals, just a current tax return to show the business is active… very simple. I became inmigrado without ever messing with additional paperwork.
      I am a true home owner and have been able to buy and sell various properties thru the years.
      Best wishes

      • sdibaja says:

        Also, the laws are clear. I have always been confident that I am 100% legal (and would pass audit) on both sides of the border. (I pay foreign earned US income tax if/when it is due)

      • Amy Whitney says:

        Thanks for sharing your opinion about the corporation. I have been thinking the same thing as well. Either setting-up a corporation in Mexico, Canada or even off-shore (tax haven option).

        I believe the Mexican corp will help us for the long-term benefits like you have mentioned. Also, having a Mexican business will allow me to sell my English courses here in Mexico that help intermediate to advanced level English learners reach fluency 😉

        https://realenglishconversations.com.

  15. Lionel says:

    Hi, Steve–
    This article about the “Interrogation room” and intervention in a private email account is popping up all over the Internet, with most sites pointing back here to this article.

    Please tell us where the original report was published!

    Thanks–

  16. Denise Lucia Robles says:

    Wonder if this would have happened without the crackdowns on immigrants in US?

    • yucalandia says:

      That’s a tempting idea, but this policy has been around since 2013.

      Then consider that INM agents efforts to apply it have been growing & expanding every year since the 2010 Law created it and the 2012 Reglamentos laid out the residency vs visitors visas purposes & requirements. … So, as an effort that started & growing for 5 years before Trump, should we really try to blame Trump for this one?
      steve

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