Can You Live in Mexico and Pay ZERO Tax?

Get personalized advice about tax, asset protection, offshore banking, residency, and citizenships: calendly.com/m...
You can visit our websites for more information about us: offshorecitize... & www.offshoreca...
Is Mexico a tax haven? Can you live in Mexico and pay zero tax?
Lots of people we know do just that. But are they maybe breaking the law? Are they not paying taxes they should be paying?
Lots of people, including some accountants, think it's perfectly fine to not pay taxes in Mexico as a temporary resident. Some even go a step further and say that expats shouldn't be paying any tax. Nobody asked them anything, after all.
Today we are exposing the truth about the tax situation in Mexico.
Who are we and what do we do?
We are Offshore Citizen team. We help people become global: get a second passport, set up a second residency, pay less taxes, do banking abroad, etc.
We have lots of interesting articles on different topics, we have relevant information up to date.
Author: Michael Rosmer
Feel free to join our community!
Don’t forget to subscribe to our channel
/ @offshorecitizen

[@dorothymaccurdy5006]

Mexico is now giving new residents an RFC which is similiar to a social security number and comes from Mexican tax department, so I expect it won't be long before expats start getting required to pay taxes.

[@benchoflemons398]

They basically did a total 180. They’re no longer cracking down

[@amadei2]

@@benchoflemons398 Aren't you supposed to pay taxes now ?

[@300rivers7]

That certainly makes Mexico all the more attractive! I could live there 4 or 5 months out of the year, no problem. Mexico is a tough sell to those who believe the overly sensationalized stories. Sure, it's got it's issues, but every place does. Thanks, Michael.

[@armando3965]

As a Mexican I would say: "yes I live inn México, but I don't have any income, I am living on my earns" that's how you don't have to pay any taxes... even if you have incomes: no one will know

[@SmartTaxSolutionsInc]

Thank God, someone who tells you the laws and the reality. I have been getting advice on "what you can get away with" and not true tax law

[@buckdaman8493]

And that’s why I love Mexico .. the law on the ground is kind 99% of the time … well the “law.” You’d have to really draw some attention to yourself.. and I mean work at it, to draw scrutiny from the Mexican State . Hell here if you want to start a small biz all you need is motivation , a willingness to yell and announce 📢, and a wheelbarrow and you’re in business . Talk about small business friendly !

[@Youknowwhoin2024]

Cartel doesn't pay taxes

[@namalanoi4030]

Thats encourage to stay temporary/permanent residency only. Not to take citizenship.

[@crazycrazy8236]

You pay 16% tax every time you buy...

[@WolfF2022]

They want more, check Germany 19 % tax every time you buy, then income tax, capital gains tax, ..., you work more than 6 months just for the state there.

[@ej1692]

I would love to see a follow up video and how this tax id or RFC will somehow change things.

[@Chuydelmex13]

I love that about mexico !! I will definitely do my taxes as a thank you for not enforcing it 😂😂😂

[@patienceisalpha]

My naive intuition as a residency holder in Mexico is that they value more the attraction of USD (for the central bank) than enforcing taxes. Funny you say that, my lawyer that helped me get the temporary residence card at INM told me 'temporary resident don't have to pay taxes'. I chuckled lol

[@MyLatinLife]

Good breakdown

[@trer04]

Most US digital nomads don't have to worry about MX taxes. You're still a tax resident of the US if your income source is the US (where you qualify for the Foreign Earned Income Exclusion). Then it's a matter of setting up state residency in a state that doesn't have personal income tax and then setting up your company as an S-Corp where you can minimize your self employment tax thanks to your lower cost of living abroad. Thank you for coming to my Ted Talk.

[@prettybrwneyez7757]

Correcto!

[@berniekeene868]

@trer04 I am living in Mexico and I'm interested in doing what you described. Can you direct me to any additional information you have about how to do this? Is TX or FL the best states for this? Thank you

[@benbohoho]

What would prevent Mexico from starting to collect taxes? As an immigrant that has to prove that you are rich to get residence, it seems like you would be a primary target for enforcement. They have already clamped down on border runs and started giving out tax numbers. I would be very careful about investing in RE there or keeping money in the bank, since it would be easy for them to sieze. You could end up in jail, especially if they decide to figure out backtaxes and interest. 30%+ of worldwide income adds up quickly.

[@Youngfinest]

Mexico it is then boys 🇲🇽 😎

[@DR-ed5uw]

You mentioned high networth individuals could be at risk for kidnapping due to information in the mexican government not being private. Do you believe that risk is just for very high income people or do you think even qualifying for the permanent residency 180k savings would put someone at risk? Thank you for your videos and information!

[@transcend3145]

Tax revenue should come from business for profit entities Only. Not from individuals compensation.

[@OffshoreCitizen]

Interesting what makes you say that? From a practical standpoint the opposite is probably true

[@transcend3145]

@@OffshoreCitizen Its based on principled economics instead of a carryover of the feudalistic nature of taxation - protection tax. The rational democratic reasoning- Monetary Tax revenue should be generated from the entities that "Invest monetary instruments" to make profit in terms of "money". Whereas a " compensation" is an exchange made with items in which at least one component is of non monetary nature such as "human labor / hours of human life". The human labor hours cannot be recouped replicated reinvested once that period of labor-hours has passed into the past from the present for that particular human person. Whereas an instrument of monetary origins could be recouped / doubled in value to compensate for previous losses. That is the correct concept of taxation in a democratic society. We however carry the name of democracy but the guiding principles are still being borrowed from feudal past. Such as, We have "Supreme Commander" title for military personnels. Don't you think the politicians who fund and create such military titles would in essence think of themselves of even higher titles for themselves? Feudalistic "tail" still stuck in the eye of the needle of time! The politicians are more pleased when feudalistic titles are associated with their office, no matter how much they beg for votes as the "servant" of the people. The reasoning for taxation has to include the impact of human psychology from past. People don't "Learn" from future. They learn from their past. Hope this helped in broadening the perspective in general.

[@roguesherlock]

It'd be interesting to see if they do start enforcing these rules at some point. Has there ever been a case where they have cracked down on some of the expats for this? I guess there's always that risk? btw it'd be interesting to hear your thoughts on double taxation treaties between lot of countries and how it plays out usually P.S. Love your content!

[@OffshoreCitizen]

Thanks for the compliment. You can search the channel for tax treaty videos we've done a few

[@user-bw9oz6mq5j]

Hello! What if I'm a US citizen, and I inherit rental properties in Mexico but I'd like to keep living in US?

[@ayjee8]

I’m a U.S. citizen working fully remotely for a U.S. company and have been wanting to living in Mexico for years but my company doesn’t permit me to live outside of the country because of taxes. I always have a U.S. address which I maintain as my center of vital interest + I had a temporary residence visa, which I was told was meant for non-Mexican citizens working for non-Mexican companies/receiving non-Mexican income, but my company rejected this. Will my employer have to pay any taxes/fees? Or can I handle everything to make it easier for them to accept ? They've been saying I'm only allowed to work from Mexico 90 days each calendar year, however I know that U.S. citizens are able to legally be in Mexico for around 180 days.

[@thevibe7415]

No you’ll be fine. You earned this income,outside of Mexico.(If you use a VPN) lol. I would advise you not to keep it in a Mexican checking account. Keep all that money in your US bank accounts and you’ll be fine!

[@brp361]

But how does that work with CRS? Surely bank and brokerages share information with other countries, and if your tax residency is Mexico then this would be shared by the financial institution with the Mexican tax authorities, so they would know.

[@OffshoreCitizen]

Yes that's the point that's why I say have a second residency to point to for CRS

[@Kastra707]

Sounds like you still have to report any income to the IRS because they would still find out

[@elsbells8545]

Interesting topic….😊

[@OffshoreCitizen]

Thanks! What do you think of Mexico?

[@marianagc5880]

If your retired not working and not earning ...yeah you wont pay anything If your working legally not under the table ... Not retired and want to be a decent resident well thats a different ... Maybe this young people not paying taxes are just crooked in both countries

[@ZR_ZingoRingo]

Great.. Would you need private bodyguards...

[@OffshoreCitizen]

Most people don't

[@davidlincoln711]

Great video, I’ve been researching this but I can’t get my head around this one: Let say you spend more than 183 days in Mexico BUT your centre of economic interests lies elsewhere (with more than 50% of your income is generated outside of Mexico) AND you maintain homes in both countries, does Mexico consider you tax resident?

[@thevibe7415]

How can they? I live here now and I still work in the states. Thats what you have to do. I would also say,don’t cause any trouble and you’ll be fine

[@danielpavia969]

One question can u avoid paying property taxes and taxes legally for live in Mexico yes or no

[@teaboxexpress7855]

You must pay car and property taxes or they will add up over time in MX.

[@danielpavia969]

One question can u avoid paying property taxes legally in mexico yes or no

[@speusippus]

No, you can't but you can certainly postpone them for years.

[@shyb3rt]

How about if you need the tax residency and tax residency certificate to get your home country off your back? After spending significant time trying to get tax questions answered in Mexico, it seems like neither SAT nor any lawyers/accountants really know how to deal with tax residency when you have no local sourced income - even when you're a tax resident by definition of a tax treaty. Or maybe they just can't be bothered to figure out.. And they also can't answer simple questions, given if registered as residencia fiscal en Mexico, how any capital gains from investments held abroad will be taxed (although it looks like it will all be accumulated into the same progressive income brackets table, quickly resulting in very high taxation on capital gains...?)

[@berniekeene868]

I have had two Mexican accountants tell me that Mexico does not tax capital gains received in the USA. For example, if I sell shares or stock held through Vanguard or Schwab, Mexico would not tax any of the capital gains. I haven't sold anything to trigger a capital gain to test this, though.

[@juanjuan5721]

@@berniekeene868 Can you share your two Mexican accountants' contact info?

[@leemartinez2975]

Are there any implications for not reporting foreign earned income (salary from working remotely, pension, 401K etc.) when purchasing real estate in Mexico?

[@lisas44]

So if I understand correctly, you can get your permanent residency, but if Mexico isn't considered your "central vital interest", you don't have to pay Mexican taxes.

[@OffshoreCitizen]

Slightly more complicated than that but that's the general idea

[@user-id4mj5or8j]

Mexico 💞🇲🇽

[@easywinboxlose6081]

Do you maybe know how it works for online poker players? Quite tough to find some good information :D

[@danh-or5nt]

QUESTION: Would a retired US citizen living full time in Mexico at his owned residence be subject to Mexican income tax on his US Social Security benefit? I have heard different views on this. The original tax treaty between the US and Mexico states: "b) social security benefits and other public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State." [Ref: www.irs.gov/pub/irs-trty/mexico.pdf] I understand that US citizens must file a US tax return, regardless of their residency status. But under the language of this Treaty, a US citizen resident in Mexico for tax purposes would NOT pay Mexican tax on US Social Security benefits (or public pensions) on his/her Mexican tax return. I bring this up because the Mexican income tax rates are extremely high when US Social Security benefits are taxed in Mexico. This Treaty language appears to also include "public pensions" such as a US Federal retirement pension. By my calculations, a US citizen resident in Mexico receiving these US benefits would be far better off if taxed only under US rates and provisions instead of Mexican. Any thoughts or suggestions you have would be appreciated. Thanks

[@vicflowers2289]

I would love to hear opinions on this, also. I would love to retire to Mexico in a year. I’ll be receiving social security and TRS (Texas teacher retirement). I will barely be able to afford to live in the US. If I move to Mexico and pay 30% taxes on my pension/SSSecurity as well as my US taxes, I would be broke!

[@donovanduncan5733]

Seems unfortunately this question was never answered. Any have an answer?

[@berniekeene868]

@@donovanduncan5733 I live in Mexico and talked with a Mexican accountant recently. He said Mexico does not tax SS. He said Mexico doesn't tax and USA sourced income.

[@juanjuan5721]

​@@berniekeene868 Can you tell me your Mexican accountant's contact info?

[@tinglestingles]

Can you do a video on double tax treaties? For example... is it your citizenship or current/former residency which dictates one side of the treaty?

[@OffshoreCitizen]

Residency, unless American. Have you seen this one kzbin.info/www/bejne/kJzJn5KMqN1_j80 ?

[@JesusBadillo-np1yr]

What if you have both a US Citizenship and Mexican Citizenship but source all of your income from the US

[@teaboxexpress7855]

You always pay tax to uncle Sam. Always. He never forgets.

[@timk4057]

I heard somewhere, I think in one of your videos, that those born on the Iberian peninsula qualify for Mexican citizenship, yet I can't find any documentation on it. Is this true? Thanks

[@NoemiPrinces-sw4jz]

Ahout the taxes, you can not be dual taxed in 2 countries if your income is outside from mexico and you pay your taxes abroad? And i have permanent residency, will that change for example if i will apply for a pasport? @offshore citizen

[@keydatingtips]

So is it better to pay taxes in the state as an expat or in the us as an expat?

[@parkerhoeppner451]

Can you share the link to your video on Mexico permanent residency?

[@OffshoreCitizen]

kzbin.info/www/bejne/nJWwqI2VnJyBpac And feel free to reach out if interested, we assist throughout the whole process

[@user-Kingofkings3]

Can u avoid paying taxes and property taxes legally in mexico yes or no

[@Iudexs]

No, you cant avoid property taxes in Mexico

[@p.c.h.6721]

I love Mexico, nice people, great climate, awesome food! Where do I go Michael, Dubai or Mexico? 🤔 I’d love to keep a place in Mexico and it’s cheap

[@OffshoreCitizen]

Maybe you can do both?

[@p.c.h.6721]

@@OffshoreCitizen Michael, what are the requirements to get permanent residency in Mexico? And is it still $20K and is that for one family member, or for the whole family?

[@maximizemoney5694]

How much does it cost to get the permanent residence?

[@MarkWickenheiser-yg7ny]

It will cost you approx $2000.00 USD You have to get your temp residency first and have that temp for 1 month then apply for you perm residence. This price includes a lawyer and government fees.

[@tivsma]

You have to prove financial solevency to a Mexciacan Consulate in the USA, get approval there, first. Every location has slightly differnet requriements, it is currently about $3500 USD per month that you have to prove as your income, in order to qualify. Every year it goes up, upwards of 15%. You then have 6 months to enter Mexico and complete the residency process. Once you are in Mexico, it must be competed within 30 days, or you lose the approval. It costs about $300 USD per person to have a facilitator help in Meixco, to finish the process at SAT, the immigration office. All in all, we paid about $1000 USD each as a married couple to complete residency to Mexico, start to finish, in 2022. Hope that helps.

[@bobbybeast1000]

do I pay CRA or Mexico if I'm retired in Mexico with Canadian ETF dividend monthly income?

[@captnflex5502]

If you are a non resident of Canada and you account is with a Canadian brooker or the one who handle the monthly dividend payment will have to collect and pay CRA 15% on div but 0% on interest paid to you if not at arm lenght.

[@balasubramanian6410]

Hi Am an expat living here in Mexico on a work visa but I do pay taxes. Is that possible to get back all the taxes I paid in Mexico If I leave the country permanently?

[@OffshoreCitizen]

Unfortunately not

[@simonpeter9617]

Need to pay money to local GANG

[@jasoncarr5379]

So how do they pay for their schools

[@KatKatz11]

Question...my husband and I are moving to MX in 6 months and have our Temp Residency. I won't be working and my husband will be getting Social Security checks. Other income will come from savings we will put in a Investment account and earn interest....so we will be the typical retirees not super wealthy. I thought I call my tax person in the US every year and have her do our taxes as usual?? I thought you can't be taxed twice, so why would I pay tax in MX as well? Thanks!

[@OffshoreCitizen]

People misunderstand how the not getting taxed twice thing works. The country where you live has primary taxing rights so you get taxed there. The US will then generally give you a tax credit for taxes paid abroad

[@KatKatz11]

@OffshoreCitizen Actually, I did read that before... It was so long ago I forgot...now that it's getting closer to the move I'm researching again...thanks for reminding me!😊

[@WolfF2022]

@@OffshoreCitizen if you live in a country without capital gains tax but your home country has capital gains tax, would that mean you`re taxed on capital gains by your home country even if you live in the country without that tax?

[@mavickespino7196]

No tax, no government project and pensions too.

[@shanediesel4562]

So what would be the purpose of obtaining Mexico residency if there is a safety risk of your information being shared publically from government to the cartels?

[@OffshoreCitizen]

For living To provide safety get reporting to another county

[@shanediesel4562]

@@OffshoreCitizen If you apply for PR under economic solvency and you have to demonstrate your wealth, then you have a risk of being a target while living there. How can you be safe if the first requirement for PR is showing immigration your investments and savings, which could end up in the wrong hands?

[@Quagmire123]

@@shanediesel4562 so you pay taxes

[@berniekeene868]

@@shanediesel4562 I think there have been thousands of people over the years obtain PR in this way. If being targeted was an issue, I think there would be a lot of stories out about it. I haven't heard of this ever happening. Maybe it has, but I haven't ever heard of it actually happening.

[@BlazeGuitarLessons]

Is this true about Colombia as well?

[@OffshoreCitizen]

It's similar though slightly different

[@cougarlove8542]

I have residency in Costa Rica as a US citizen. The only issue I have here is paying the monthly Caja (social healthcare) plan which is not something I would ever use. It is basically a tax for me to hold residency. The pension residency is the cheapest here and it is based on gross income. Key word gross income which means you can deduct expenses. The investor residency is usually much more expensive for the monthly Caja. It seems to me it is best in this globalist dictator movement to have a couple different options. Even though Costa Rica has pretty high taxes on imports and a 13% VAT the income tax is very low at 15% no matter what the income. They have no military so basically the politicians take most of it. The roads are shit, the banking (national banks) suck and it is so laid back that nothing get done on time. It is very free, very relaxing and absolutely beautiful. The people for the most part are super friendly however allot of them will scam a gringo in a heartbeat. You take to good with the bad no matter where you are. The US when I go back to see family now seems much less free than Costa Rica, Mexico or even Nicaragua. It is also the number one target of the world.

[@WolfF2022]

I always hear black or white stories about CR, some people say it is absolute dangerous, everyone was already robbed there, other don`t say a word about. Do you still recommend it?

[@ponchor.8949]

Of course you have to pay taxes but you just decide not to do it

[@mavickespino7196]

No protection of your life.

[@mavickespino7196]

Really 😮😮

[@HombreNomada]

in Peru it is quite similar

[@OffshoreCitizen]

What do you think is a better option, Peru or Mexico?

[@vioreliachim5646]

First!

[@MartinZanichelli]

You are already in Mexico? 😎

[@patriot1-kt9di]

bungh of BS rules