Mexican Withholding Tax on Upwork Earnings

[Raymundo L]

Hi Samantha,
I used to work for mexican companies (asalariado) first I made an appointment with SAT to declare my activity has changed to freelancer (persona física con actividad empresarial/profesional) in my case as a provider for technology/technical services.
A friend of mine is an accountant with knowledge of taxes, he mades my declaration on a monthly basis and anual declaration on april (I pay for the service and he gives me an envoice that actually I can deduct from my income) since my clients are from countries different than México I don't need generate an invoice and my taxes are 100% ISR

I hope this helps

[Samantha R]

It does!! thank you so much,

**Edited for community guidelines**

[Clicerio M]

Hello.

I am working from Mexico.

Seems to be that registering my RFC is convenient and I did it already; however, I wonder if besides this I must upload the W-8BEN form?

In case I must do so, where is the link to upload the form to Upwork? I don't see any repository in my profile's settings.

I would appreciate any orientation.

Thank you so much in advance.

Clicerio

[Joanne Marie P]

Hi Clicerio,

The Form W-8BEN is a form used to confirm you’re not a U.S. taxpayer and that Upwork is not required to withhold taxes from your earnings. To provide Upwork with your Form W-8BEN information, please go to Settings › Tax Information and provide us with your legal name and address.

[Lucio Ricardo M]

I am grateful that Upwork is complying Mexican laws, so that the Mexico-based freelancers don't have any problem later. But, shouldn't the Earnings tax (Impuesto sobre la Renta) be applied after deducting the Upwork fee, and not before (or how can we deduct the Upwork fee, as the money for this fees never comes to our hands?). And, for the effect of that deductions, do you have a RFC (Registro Federal de Contributyentes) registry.

[Joanne Marie P]

Hi Lucio Ricardo,

The withholding tax is calculated based on the gross amount that you invoice your client, so it is calculated prior to freelancer service fees or any other fees that may reduce the amount credited to your account.

[David L]

but if they applied it after the fee, then the government would make less money...

😂 

[Lucio Ricardo M]

Mexican goverment have looked to the platforms contractors, for surveilling our tax obilgation. But social security has not looked to us. They should do also, don't you think, Mexico-fased freelancers?.

[Selene M]

I landed here in 2009, oDesk/UpWork became profitable to me really fast and I've been paying my taxes religiously since then. Not ecstatic for paying taxes, just an obligation.

For more than a year I've been wondering how you guys will going to handle this matter. Now I know, and I foresee more changes to come in ref to VAT (or IVA) to be retained to us, hopefully in the far far future. So far no questions, likely I'll have some in the next weeks.

I'm not thrilled about these changes, but can I predict I'll be extremely annoyed for having to deal with Tax Authorities (SAT) in my country. I also predict too many hours of my free time spent studying the law referenced here, just to be sure my accountant doesn't mess up my taxes.  Kidding, I know he wouldn't dare  and besides, he's a bestie

Fortunately, we still have some overhead expenses that are tax-deductible.

Meh! 

[Raza R]

The deduction should be based on gross amount or net of upwork fee.