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Mexican Withholding Tax on Upwork Earnings

ms62979
Active Member
Mirka S Member Since: Feb 25, 2021
11 of 145

Why UPWORK is witholding the tax 1%/ 20% already for 3 weeks when it doesn´t have the RFC? Can´t UPWORK just wait to have the RFC and then start witholdingn the fee, when it corresponds? 

ponchovc
Active Member
Alfonso V Member Since: Mar 10, 2015
12 of 145

Hello, where can i download the invoices? I need a proof/report that YOU - upwork are holding my taxes...

jarankowsky
Active Member
Jorge A Member Since: May 3, 2016
13 of 145

Delete.

lauragomez72
Active Member
Laura G Member Since: Apr 17, 2019
14 of 145

Thanks for the information.

 

Are you going to let us know when will we be able to see those new statements (monthly digital invoices with the tax retention, RFC from upwork, etc)  in the platform?...Thanks in advance!

 

 

cc9e9a0b
Active Member
Raul L Member Since: Nov 17, 2020
15 of 145

Hello, in order to accomplish tax regulations here in mexico, I need to generate invoices to upwork according to my accountant, that means that I need to write the upwork's rfc on those invoices, will upwork have a rfc soon?

alexletayf
Active Member
Alejandro M Member Since: Jan 7, 2019
16 of 145

Hey Vladimir, 

 

It's been a while since we have heard an update on the matter, I know Upwork is not looking to charge IVA which is great, because it means you'll have to send us a mexican deductible invoice, and 100% will be deductible for us. Also, that invoice must contain the RFC that everybody has been asking.

 

OR I have been thinking for a while that it is possible you guys are instead of providing the RFC so we send and invoice to UPWORK, find a way where our invoice is sent to the person who hired as and that invoice is valid in México. (That would be cool), but let's what happens. It's been several months, it would be nice to at least acknowledge that this is still something we are waiting for. It is a legal obligaton for UPWORK to release this information after all. 

 

Thanks

andregutierrez22
Moderator
Andrea G Moderator Member Since: Jul 7, 2020
17 of 145

Hi Alejandro,

 

We actually had an update on this today! Please check out the latest Announcement regarding Mexico Tax here.

 

~Andrea
Upwork
alexletayf
Active Member
Alejandro M Member Since: Jan 7, 2019
18 of 145

Hi Andrea!

 

Like I mentioned, the news on VAT is great! But Value Added Tax and Income Tax are two different things. What is keeping mexicans awake at night is not VAT, rather Income Tax which in México is ISR. So it's not really an update to the issue, more like an additional piece of information that we did need, but it doesn't solve the core problem where Upwork is not being forthworth about how they are going to handle the income tax situation. 

 

The core problem is Upwork is retaining taxes, but it hasn't released a TAX ID called RFC in México. And it hasn't explained the nature of their relationship with SAT (the Mexican IRS) so our accountants can't know how WE should declare our own taxes. This ambiguity has been going on since February and it's starting to get annoying, as well as ilegal. 

 

From what I understand if Upwork is going to give us an invoice for their services, and our client is not going to be "Upwork" then basically Upwork shouldn't be retaining ISR. I am just as confused as everybody else. So if there is something I am not seeing, someone please explain. Also we will know UPWORK's RFC in the first invoice we get from them, but would we still need it. They are technically not going to be our clients. 

oorlyg
Active Member
Alfonso G Member Since: Jun 4, 2019
19 of 145

Yes now it is not only one but 16% from the fee they charge us. And also they are charging you with your monthly subscription.

rayfreelance
Active Member
Raymundo L Member Since: Apr 18, 2019
20 of 145

Hey Up Team!
I have been happy freelancing on Up for the last 4 years, I have paid my taxes and also Up fees.

Yes, we have a new law for "Digital Platforms" in the "Resolución Miscelánea Fiscal" available to download here 
Netflix increased the prices in Mexico during quarantine because of this new law https://www.world-today-news.com/netflix-raised-its-prices-in-full-quarantine-in-mexico/ 

Due to the lack of information on how Up changed or added this new Up policy, I have some comments.

  • I pay my taxes I have no issues adding my RFC to my profile. I don't allow Up to make my RFC visible on my profile or share it with my Up clients nor potential clients that I could have in the future.
  • I'm not a digital platform providing a digital service,  if the Mexican laws enforce new taxes to digital platforms, the new taxes should be paid by Up or the one who hires and not the freelancer.
  • I don't authorize Up to withhold 20% nor 1% of all my Upwork earnings, if the Mexican government request me more details about my income I can share it with them, I am willing to share my annual tax return with Up in exchange for no additional withholding.

Come on guys! a lot of Mexicans are freelancing in Up, the new law should not apply to Up because Mexicans are being hired by Up clients! these new taxes on Digital Platforms providing Digital services are supposed to apply to those companies that don't fulfill a basic need e.g education or working! (this new tax applies to platforms that are considered a "luxury" and not a basic need, like Netflix)

Please ask your legal team to find out more about the new law, the Mexican government will not charge additional or new taxes to platforms such as Up that puts us in contact with potential clients and helps us meet a basic need, which cannot be covered by the Mexican government.

Thanks

 

 

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