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Double taxation U.S./Mexico?
Thread poster: Alison Trujillo
Alison Trujillo
Alison Trujillo  Identity Verified
United States
Local time: 06:33
Member (2018)
Spanish to English
Jun 17, 2021

I live and work in the U.S. One of my clients in Mexico (an established business) says they need to withold 10% of my earnings from a project for Mexican tax purposes.

They say:

"El 10% que se retiene es por una regla fiscal entre países y de acuerdo a cada país se hace la retención del porcentaje correspondiente."

Is this correct? This is the first client of mine from Mexico that has ever mentioned this.

Thanks.
 
Maria Teresa Borges de Almeida
Maria Teresa Borges de Almeida  Identity Verified
Portugal
Local time: 14:33
Member (2007)
English to Portuguese
+ ...
@Alison Jun 17, 2021

Please find below the text of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed by the USA and Mexico:

https://www.state.gov/93-1228/
 
Alison Trujillo
Alison Trujillo  Identity Verified
United States
Local time: 06:33
Member (2018)
Spanish to English
TOPIC STARTER
Article 153? Jul 6, 2021

@Teresa, thank you.

This is the article that my client sent me:
https://leyes-mx.com/ley_del_impuesto_sobre_la_renta/153.htm

It seems to me that Article 153 here is referring to sources of income such as property, etc....not the type of income we make as translators/independent contractors.
 
Robert Carter
Robert Carter  Identity Verified
Mexico
Local time: 07:33
Member (2011)
Spanish to English
Take a look at Art. 14 of the US-Mexico Convention for the Avoidance of Double Taxation Jul 6, 2021

You might be better off countering them with Article 14 of the Convention for the Avoidance of Double Taxation, linked to by Teresa above. Here's the Spanish version of that Article, should you wish to send it to them:

"SERVICIOS PERSONALES INDEPENDIENTES

1. Las rentas que una persona física residente de un Estado Contratante obtenga por la prestación de servicios personales independientes u otras actividades de naturaleza análoga con carácter independiente, sólo p... See more
You might be better off countering them with Article 14 of the Convention for the Avoidance of Double Taxation, linked to by Teresa above. Here's the Spanish version of that Article, should you wish to send it to them:

"SERVICIOS PERSONALES INDEPENDIENTES

1. Las rentas que una persona física residente de un Estado Contratante obtenga por la prestación de servicios personales independientes u otras actividades de naturaleza análoga con carácter independiente, sólo pueden someterse a imposición en este Estado, salvo que:

a) dicho residente tenga en el otro Estado Contratante una base fija de la que disponga regularmente para el desempeño de sus actividades; en tal caso, sólo pueden someterse a imposición en este otro Estado Contratante las rentas derivadas de servicios realizados en este otro Estado que sean atribuibles a dicha base fija; o

b) el residente esté presente en el otro Estado Contratante por un periodo o periodos más de 183 días, en un periodo de doce meses; en tal caso, el otro Estado puede someter a imposición la renta atribuible a las actividades desempeñadas en este otro Estado.

2. La expresión "servicios personales" comprende especialmente las actividades independientes de carácter científico, literario, artístico o actividades educativas o pedagógicas, así como las actividades independientes de los médicos, abogados, ingenieros, arquitectos, odontólogos y contadores."

So, unless you fall into scenario (a) or (b), it looks like you're okay to ask them not to withhold any tax from you.

Good luck! ▲ Collapse


Alison Trujillo
 
Alison Trujillo
Alison Trujillo  Identity Verified
United States
Local time: 06:33
Member (2018)
Spanish to English
TOPIC STARTER
Gracias Jul 6, 2021

Thank you @Robert. I'll share this with them.

-Alison
 


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Double taxation U.S./Mexico?







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