Being aware of the tax obligations you have as a legal or physical person, and fulfilling them in a timely manner is essential to protect yourself from unexpected payments and high fines, which could affect your finances.
It is important to find a way to be aware of your obligations as a physical person, by looking for a course or reading the Tax Code and the current Income Tax Law.”
Virginia Ríos, member of the fiscal investigation commission of the College of Public Accountants of Mexico.
All citizens who are working formally have to comply with their tax obligations, the Tax Administration Service (SAT) is the agency in charge of collecting and monitoring compliance with the obligations of individuals and corporations.
Depending on the level of income, number of employers and type of economic activity, the manner and frequency with which you have to declare to the SAT how much you have earned to see how much you have to pay in taxes and why.
Tax payments and annual and monthly declarations are the backbone of the Mexican tax system and, in case the taxpayer does not comply with his tax obligations, there are fines and surcharges from the SAT.
Who and when do they file declarations?
There are two types of people under tax laws, legal entities and individuals. Legal entities are groups of people and are identified through a name or corporate name, such as companies, commercial companies, civil societies, religious associations, etc. Individuals are those who are identified through their first and last name, that is, an individual.
According to the Federal Tax Code, in the case of legal entities, those with profit-making purposes must file both an annual and monthly declaration, while legal entities with non-profit purposes do not have to file a monthly declaration.
The same Code indicates that individuals who have business or professional activity with periodic income, who have rented real estate, salaried employees who receive payments from abroad and those who receive their income from multiple employers must file a tax return; whether it is because they have more than one job or because their paychecks come from two or more employers.
On the other hand, salaried workers who annually receive less than 400,000 pesos, which is equivalent to 33,333.33 pesos per month after tax reductions, are not required to file a monthly or annual return, unless they fall into one of the aforementioned situations.
What happens if I did not file my returns?
Virginia Ríos is a public accountant and member of the fiscal investigation commission of the College of Public Accountants of Mexico and warns that in case of not filing returns, whether annual or provisional, the fine is between 1,810 and 22,400 pesos for each undeclared obligation.
“If in a declaration we have obligations to declare withholdings, provisional payment, declare VAT; Maybe we have four or five obligations and not doing so will be a fine for each one of them,” described Virginia Ríos, the total amount of the fines in these cases would be, at least, 7,200 pesos.
Fines can also be received for filing the declaration after the deadline when the authority has already made the request, in that case, the amount can rise to 44,790 pesos.
“In addition to the fines that the taxpayer may have, if any payment had to be made, this will have to be made with the update of the amount according to the inflation rates that the country has in that period plus the surcharges,” added Virginia Ríos.
How should I file my declaration?
Tax declarations must be filed electronically on the SAT website.
“If the person has a business where they do not have the technology to do it that way, they can go to the SAT where they will guide them to make the declaration, or hire an accountant to take care of all that matter” recommended Virginia Ríos and added that the price of hiring an accountant will vary according to the type of taxpayer and the city in which they are located.
Virginia Ríos extended other recommendations to be able to comply with tax obligations, in case of not having the knowledge of how to do it.
Among them, she highlights going to the UNAM where students in the last semesters of accounting can help, this shares the fulfillment of their social service; attend a course given by the same academic institution or the SAT on the tax system of our country or approach one of the local accounting colleges.
Source: eleconomista
