One of the most common mistakes we see among individuals with international income is assuming that if the Mexican tax authority (SAT) allowed them to register under the Simplified Trust Regime (RESICO), then they automatically qualify to remain in that regime.

In reality, a tax audit may lead the authorities to analyze the true nature of the income and reclassify it, resulting in significant tax assessments, penalties, interest, and surcharges.

A Real-Life Example

We recently analyzed the case of a Spanish citizen dedicated to content creation and online streaming.

For several years, he lived in Monaco, a jurisdiction known for having no personal income tax. His income was paid by various international streaming and digital platforms and deposited into foreign bank accounts.

Later, he moved to Cancún, married a Mexican citizen, and established his permanent life in Mexico.

As part of this process, he:

• Obtained a Mexican Tax ID (RFC).
• Obtained his electronic signature (e.firma).
• Established his permanent home in Mexico.
• Created his center of vital interests in Mexico.
• Registered under the RESICO tax regime.

After moving to Mexico, he continued receiving approximately €8,000 per month in foreign bank accounts. This amount allowed him to remain below the annual income threshold required to qualify for RESICO.

To maintain that status, he transferred only the funds needed for his personal expenses in Mexico and reported those amounts through invoices for exported services. The remainder of his expenses continued to be paid directly from his foreign bank accounts.

At first glance, the strategy may appear reasonable. However, the tax risk is substantial.

Mexican Tax Residents Must Report Worldwide Income

Once an individual becomes a Mexican tax resident, they are generally required to report and pay tax on their worldwide income.

It does not matter whether the funds remain in a foreign bank account, are paid by a foreign company, or never enter Mexico.

The tax obligation arises from tax residency, not from where the money is located.

As a result, if a Mexican tax resident earns €8,000 per month from streaming activities, the Mexican tax authorities could argue that the entire amount should be included in the individual’s taxable income in Mexico, regardless of how much money is actually transferred into the country.

The RESICO Threshold Is Not Based on Funds Transferred to Mexico

A common misconception is that only the money brought into Mexico must be reported.

From a tax perspective, however, what matters is the income earned, not the amount transferred between bank accounts.

If an individual receives income abroad and uses those funds to pay rent, travel expenses, investments, credit card balances, or other personal expenses outside Mexico, those resources still belong to the taxpayer and may be considered taxable worldwide income.

The REFIPRES Issue

The situation becomes even more complex when income, entities, or financial structures are connected to low-tax jurisdictions.

Mexican tax law contains specific rules regarding Preferential Tax Regimes (REFIPRES), commonly known as low-tax or tax-favored jurisdictions.

Taxpayers who are subject to certain REFIPRES rules may face restrictions regarding eligibility for RESICO.

Therefore, even if the taxpayer is properly registered in RESICO and files monthly tax returns, the SAT could later conclude during an audit that the taxpayer never qualified for that regime.

Potential Reclassification of Income

During a tax audit, the SAT could determine that the income should have been reported under the general business and professional activities regime rather than RESICO.

If that occurs, the consequences may include:

• Income tax recalculated under the standard progressive rates.
• Tax rates reaching up to 35%.
• Additional taxes for multiple years.
• Inflation adjustments.
• Interest charges.
• Penalties.
• Additional consequences related to REFIPRES and international reporting obligations.

When several tax years are involved, the financial exposure can become significant.

Not Everything the System Allows Is Tax-Compliant

One of the most dangerous assumptions in international tax planning is believing that registration approval equals legal compliance.

The SAT’s systems do not automatically analyze worldwide income, tax residency, REFIPRES implications, or international tax structures.

Those issues are often reviewed years later during a formal audit or tax examination.

For that reason, individuals with foreign income, foreign bank accounts, or connections to low-tax jurisdictions should obtain a comprehensive tax analysis before relying on a particular tax regime.

Final Thoughts

Moving to Mexico involves much more than obtaining an RFC or registering under a tax regime.

Once an individual becomes a Mexican tax resident, careful planning is required to ensure worldwide income is reported correctly and that the chosen tax regime remains valid.

The difference between proper tax compliance and an incorrect tax position can result in substantial tax liabilities. In international taxation, the key question is not how much money is transferred to Mexico, but rather how much income was actually earned and how that income should be treated under Mexican tax law.

Contact tax ID Mexico

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Project Details

The new plant will focus on the production of beauty and personal care products, including deodorants, shampoos, conditioners and creams from well-known brands such as Dove Y LineThese products will be primarily intended for the markets of United States and Canada, strengthening Mexico's position as a key export hub in North America.

The investment includes the creation of 850 direct jobs Y 800 indirect jobs in its first phase, with the possibility of generating up to 120 additional jobs in the future. 

Economic and Strategic Impact

This investment is aligned with the strategy of nearshoring, which seeks to bring supply chains closer to key markets. Nuevo León's strategic location and robust infrastructure make it an attractive destination for investments of this magnitude.

The governor of Nuevo León, Samuel García, highlighted that this investment reaffirms the state's role as the industrial heart of Mexico and a global manufacturing power.

Future Perspectives

With this investment, Unilever strengthens its commitment to sustainable development and innovation in its manufacturing processes, positioning Mexico as a leader in the personal care products industry.

For more information about this investment, you can consult the official statement from the Government of Nuevo León:

• Historic! Unilever will invest $800 million in Nuevo León

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This right aims to provide financial support to meet the expenses of the Christmas season. Below are the most important aspects that both employers and employees should know about the Christmas bonus.

What is a Christmas bonus?

The Christmas bonus is a mandatory annual benefit that employers must grant to their workers. before December 20th. This payment is equivalent, at least, to 15 days salary for those who have worked a full year in the company.

Employees who have been working for less than a year also have the right to receive a proportional share.

Who is entitled to the Christmas bonus?

All workers in Mexico are entitled to receive a Christmas bonus, regardless of whether they are hired permanently, for a fixed period of time, or under a reduced-work schedule. This includes:

• Trusted workers.
• Unionized workers.
• Domestic workers (although the calculation may vary depending on the type of contract).

Exclusion: Partners or shareholders of a company are not entitled to the bonus, since they are not considered employees under the LFT.

Employer's Obligations

1. Payment date: The Christmas bonus must be paid before December 20th.
2. Cash or transfer delivery: It can be made in cash, check or bank transfer, but it must always be verifiable.
3. Fines for non-compliance: If the employer does not pay the bonus on time, he or she may face sanctions from the Ministry of Labor and Social Welfare (STPS), ranging from fines to more severe inspections.

Tax implications of the Christmas bonus

The bonus is subject to tax calculation:

• ISR (Income Tax): There are exempt limits. The equivalent of 30 UMAs is tax-exempt. For 2024, the daily UMA is $108.57, which implies that the first $3,257.10 will be free of ISRThe surplus will be taxed in accordance with Article 174 of the Income Tax Law Regulations.

Conclusion

The Christmas bonus is a fundamental right that seeks to support workers' finances at the end of the year. Both employers and employees must be informed about the calculation rules, payment dates and consequences for non-compliance to avoid conflicts and ensure compliance with this legal obligation.

If you have questions or need support in the Calculation of your Christmas bonusIt is advisable to consult an accountant or payroll specialist to ensure correct and transparent handling.

La entrada El Aguinaldo en México: Derechos, Obligaciones y Aspectos Claves se publicó primero en TAX ID.

Paid personal, personal and subordinate service

 One of the key criteria is the concept of paid, personal and subordinate personal service.

This concept refers to those people who perform work for another physical or legal person under the following conditions:

1. Paid:

The worker receives financial compensation for his services.

2.     Staff:

The work must be carried out directly by the person providing the service; it cannot be delegated or subcontracted to third parties without losing the essence of the direct employment relationship.

3.     Subordinate:

There is a dependency relationship, where the employer has the power to direct the worker's work, establish schedules, supervise performance and exercise a certain degree of control over the employee's work activities.

Practical example

To better understand this definition, let's consider a practical example: Juan is hired by a company to perform administrative tasks.

He receives a fixed monthly salary and must comply with a work schedule established by his employer.

Additionally, you receive direct instructions from your supervisor on how to perform your daily tasks and must regularly report on your progress and results. In this case, Juan is working in a paid, personal and subordinate personal service regime, which implies that he must be insured under the mandatory social security regime.

It is essential to comply with these provisions, as failure to do so can result in both employers and workers facing serious consequences. For example, if a worker falls ill or dies and is not insured, his or her family may face difficulty accessing health care or pension benefits offered by the social security system.

Conclusions

This criterion is crucial to ensure that workers under these conditions receive adequate benefits and protections according to the social security system in force in Mexico.

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La entrada ¿Quiénes deben estar asegurados en el Seguro Social en México? (IMSS) se publicó primero en TAX ID.

These documents are used by accountants and taxpayers to collect, organize and calculate the information necessary to determine the taxes to be paid.

What are working papers?

Working papers are internal documents used by accountants and taxpayers to support the figures reported in tax returns. These documents contain detailed calculations, account reconciliations, financial statements and other information relevant to tax determination. Working papers are essential to guarantee the transparency and veracity of the information presented to the Tax Administration Service (SAT).

Importance of work papers in Mexico

In Mexico, the work papers They are essential tools to comply with tax obligations and avoid possible penalties for non-compliance. By maintaining detailed and organized records, taxpayers can demonstrate the veracity of the information submitted to the SAT and reduce the risk of errors in their tax returns.

Additionally, working papers facilitate review and audit by tax authorities by providing a clear and organized view of the tax situation of a company or individual. This can be especially useful in case of discrepancies or questions on the part of the SAT, since the working papers serve as evidence of the calculations and decisions made in tax matters.

Types work papers used in tax calculation

1. Record of income and expenses: It details the income and expenses of a company or individual, including invoices, receipts and other evidence of financial transactions.
2. Bank reconciliations: Compares a company's accounting records with bank statements, identifying and correcting possible discrepancies.
3. Tax calculations: Shows detailed calculations of taxes payable, including Income Tax (ISR), Value Added Tax (VAT) and other applicable taxes.
4. Depreciation and amortization: Records the depreciation and amortization of fixed assets, used to calculate the ISR of a company.
5. Payroll calculations: Details employee payroll calculations, including salaries, tax deductions and withholdings.
6. Financial statements: It shows the financial position of a company, including the balance sheet, income statement and other relevant financial statements.

Tips to maintain work papers effective

1. Organization: Keep work papers organized and orderly for easy access and review.
2. Precision: Ensure calculations and records are accurate and supported by valid documentation.
3. Update: Keep working papers up to date with the latest information, including changes to tax legislation and up-to-date financial data.
4. Back: Keep copies of work papers and supporting documentation for at least five years, as established by Mexican tax law.

In summary, the work papers They are fundamental tools for calculating taxes in Mexico, since they guarantee the transparency and veracity of the information presented to the SAT. By maintaining detailed and organized records, taxpayers can meet their tax obligations effectively and avoid potential penalties for non-compliance.

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This benefit is not mentioned in the Federal Labor Law, but we can find it in the Social Security Law (LSS), in article 27, section VII, said section indicates the following:

What happens if it exceeds ten percent?

The surplus of the 10% that we mentioned above of said punctuality and attendance bonuses will have to be integrated into the Base Salary of Contribution. In other words, for the surplus, the calculation and integration of the bonus is carried out for purposes of paying Social Security fees.

Said surpluses are considered on a bimonthly basis in the calculation of variability for the Contribution Base Salary (SBC), also known as “previous bimester variables”.

Are punctuality and attendance bonuses taxed for ISR?

Yes, both bonds are taxed at 100% and must pay Income Tax (ISR).

Example:

For an attendance bonus calculation, we have an SBC of $350 in a fortnightly period.

• 15 days
• SBC$350
• Bonus percentage 10%

Attendance bonus payable= 350* .10* 15= $525

Although this benefit is not mandatory, it is advisable to grant it, given that this could motivate workers to arrive on time and not be absent, as well as reduce the burden of paying Social Security fees. We suggest you analyze other benefits that are considered within the SBC, such as food vouchers and savings funds to obtain savings in the payment of installments.

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Said opinion also proposes that during the first 5 years after the first year worked, that benefit be increased by two days, up to a maximum of 32 vacation days.

For such a change, vacation days would be as follows.

This increase would have an effect on the social security matter, given that, by enjoying more vacation days, this because it affects the vacation premium concepts, increasing them, raising the contribution base salary (SBC).

Taking in the first year of a worker with the minimum benefits of the Law, being 15 days of Christmas bonus and 25% of vacation premium over 6 days of vacation, the following integration factor is obtained.

With the new change of art. 76 and 78 of LFT for the first exercise increasing from 6 to 12 days.

Comparison integrating a salary of $250.00 pesos per day, we have the following variation in the SBC:

The only thing missing is for the proposal to be reviewed by the plenary sessions of the chambers of federal deputies and senators, as the case may be, to approve, reject or modify it.

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1. Enter the SAT Payroll Viewer Consultation Site

You must go to the following link https://www.sat.gob.mx/declaracion/90887/consulta-el-visor-de-comprobantes-de-nomina-para-el-patron- and click the “Start” button as shown below:

2.- Enter your RFC or Password or your current e.signature

You must enter your RFC and password as shown in the following screen:

3.- Accept the SAT specifications to enter the payroll viewer:

You must click on the blue "Accept" button with the specifications of the SAT, as shown below:

4.- Select the desired query option

For this guide we will select "Consult global information" to know the differences between the ISR withheld in payroll receipts and the one reported to the SAT:

5.- Check if you have differences

If you want to see the detail of the differences by month, select the "See detail" button:

6.- Check the details of your differences per month:

On the following screen you will be able to analyze the details of the differences presented on a monthly basis, so that you can correct the stamping or, if applicable, pay the SAT for the differences omitted by means of a complementary declaration:

Conclusions

We recommend our clients and readers to use this tool to avoid the sending of invitation letters by the SAT, fines or requirements. In addition to the above, it allows us to reconcile prior to filling out the annual declaration and thus save time and money in possible updates and surcharges.

La entrada ¿Cómo utilizar el Visor de Nomina SAT? se publicó primero en TAX ID.

If you are an individual employer, you must process your High Employer, this procedure allows you to register with the Mexican Institute of Social Security (IMSS) to comply with your employer obligations and there are two options to carry out this procedure which is free and in exchange you will obtain an Employer Registration Number with which you can comply with the corresponding payments.

Employer registration in the IMSS online with the e. Signature

1. You can create your user account to carry out procedures online and consult the services that the Institute makes available to you.
2. Go to the following link and click "Create an account"
3. For the creation of the user account, the Institute will verify your data with external entities SAT and RENAPO to validate your identity.
4. Capture your CURP password at 18 positions and press the Next button
5. Once your CURP key has been captured, press the Next button. The system will require the files of your Advanced Electronic Signature (e. Signature).
6. When entering your FIEL check that the data obtained by the system is correct and that it belongs to you, in case your data does not match press the cancel option To correct your data you have to go to the SAT, if the information is correct press the button “Finish process”

Employer registration in the IMSS in person

To carry out the Employer Registration procedure in the IMSS in person, you must go to the Sub-delegation corresponding to the fiscal domicile of your business.

You can start your pre-registration process in the following link  and conclude your process in the corresponding Subdelegation.

In the event that you carry out the procedure in person, you can make a prior appointment through the Internet through the website of the Mexican Institute of Social Security, www.imss.gob.mx in which you must provide the data requested by the system and then present yourself on the date and time indicated by the system.

If you prefer, you can go directly by waiting in line at the Subdelegation that corresponds to you according to the fiscal address or the work center from 8:00 a.m. to 3:30 p.m. Monday through Friday on business days for the Institute Mexican Social Security, where the window employee will capture the data requested by the system, at the end of the process will receive from the Subdelegation the Notice of Employer Registration Natural Persons in the Mandatory Regime (ARP-PF) and original of the Employer Identification Card .

What documents do I need and what should be their characteristics?

In line with e. Signature

1. Proof of address from the workplace.

Face-to-face

1. Federal Taxpayer Registry (RFC) of the fiscal domicile and/or Notice of establishment opening. Copy.
2. Proof of address of the workplace. Original and copy.
3. Map of the location of the work center address. Original.
4. Current official identification of the employer. Original and copy.
5. Unique Population Registry Code (CURP). Copy.
6. In case of having a legal representative, Power of Attorney for acts of domain, administration or special power where it is specified that you can carry out all kinds of procedures and sign documents before the IMSS. Original and copy.
7. Valid official identification of the legal representative. Original and copy.
8. Federal Taxpayer Registry (RFC) of the legal representative. Copy.
9. Unique Population Registry Code (CURP) of the legal representative. Copy.
10. Only in case of resumption of activities; Notice of Modification of companies for Occupational Risk Insurance. Original and 2 copies.
11. Only in case of registering workers, you must present the format Worker Enrollment Notice. Original and 2 copies.

If you require advice, contact us at info@taxid.mx

La entrada ¿Cómo registrar a tus empleados ante el IMSS en México? se publicó primero en TAX ID.

The amount of said compensation will depend on the time worked by the worker for the company.

What makes up the compensation for unjustified dismissal in Mexico?

The compensation is made up of:

• 3 months salary,
• 20 days salary per year worked, and
• payment of their benefits proportionally (Christmas bonus, vacations, vacation bonus).

As we can see, the compensation amounts in Mexico can be quite high, so an effective recruitment and selection process is recommended to avoid dismissals within the companies, as well as making calculations to provision possible payments for compensation for unjustified dismissal. .

What are the grounds for justified dismissal?

According to Federal Labor Law in Mexico, the following grounds for dismissal are established:

• Deceive the employer, with false certificates or references that attribute skills to the worker that he lacks.
• The worker incurs, during his work, in acts of violence, threats, insults or mistreatment against the employer, his relatives or the managerial or administrative staff of the company or establishment, or against the employer's clients and suppliers, as well as with your co-workers.
• Intentionally causing damage to work-related objects.
• Compromise the security due to imprudence or carelessness of the establishments or people who are in it.
• Commit immoral acts or sexual harassment of any person in the workplace.
• Reveal manufacturing secrets.
• Having more than 3 absences in a period of 30 days without permission or just cause.
• Attend work while intoxicated or under the influence of any narcotic or intoxicating drug.
• Executory sentence that imposes a prison sentence on the worker.
•  The lack of documents required by laws and regulations, necessary for the provision of the service when it is attributable to the worker.

If the worker resigns, do I have to pay compensation for unfair dismissal?

In the event that the worker makes a voluntary termination of employment, the employer is not obliged to cover compensation for unjustified dismissal and must only cover what is owed to the worker, such as: Christmas bonus, vacations, vacation premium, among others. .

We invite you to learn more about topics of business interest in Mexico on our blog.

La entrada Indemnizaciones por despido injustificado a los trabajadores en México se publicó primero en TAX ID.