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Mexico Tax - VAT Collection to Start in June

kochubei_valeria
Community Member

*Update: the collection of Mexico’s Value Added Tax (VAT) will begin this week.

 

Starting in June, we will begin collecting Mexico’s Value Added Tax (VAT) when talent and clients registered in Mexico purchase Upwork services. We are required to collect this tax under Mexican law. VAT will be charged on the following: 

 

  • The amount talent pays for Connects
  • Membership fees (for example, for a Freelancer Plus plan or Client Plus plan)         
  • Freelancer service fees
  • Client payment processing fees
  • Featured Jobs (tax will be applied to the cost of post, which is currently $29.99)      
  • Conversion fee (this is the fee you pay if you move a relationship off of Upwork)

 

Note: We will not charge VAT on the amount the client pays you for your services or on any withdrawal fees.

 

All taxes collected by Upwork will be passed on to the Mexican government, as required by Mexican law, and credited to the Registro Federal de Contribuyentes (RFC) that you have on file with Upwork. To learn more about our collection of Mexican VAT and how to add or confirm the RFC on your account, visit this help article and check the email we’ve sent you. You may also want to consult a tax professional for more information on how this new law and its exceptions may affect you and your business.

 

We’ll provide an update here and via email again in early June with the exact date when collection will begin. We will also provide our RFC once we receive it from the Mexican government.  

 

22 Comments
kochubei_valeria
Community Member

Gaby O wrote:

What I still don't get is if you don't provide an RFC why does Upwork retain 20% and what does the company do with that money?

 


Hi Gaby,


Thanks for your question. We do not keep the funds withheld under this tax law. We are required to forward any tax we collect from our users to the Mexican government.

lucioric
Community Member

Perhaps you as an individual should pay taxes in Mexico but not to the USA. Ask to a tax advisor. For example, I Mexican working from Mexico, I don't pay US VAT to Upwork even if the enterprises that hire me are US-based, but now I am retained IVA.

lucioric
Community Member

No, which pays the mexican taxes are you. Your company will pay you the same, but you will receive a little less. For example, me in the last $100 USD payment for a new client, instead of receiving $80, I received $76. any way each cent deducted my by Upwork is informed to my accontant so that is deducted. You should hire an accountant to help you with the tax-paying issues.

cc9e9a0b
Community Member

will we have the Upwork's RFC soon?

JoanneP
Moderator

Hi Raul,

 

Upwork has reported withholdings to the Mexican tax authorities and we are working with them to soon issue the appropriate invoices (CFDIs) as well as other necessary information to customers. As of now, we suggest to check with your local tax expert in regards to your withholding tax report.

lucioric
Community Member

Yes, for being favoured in Mexico you are required to claim for social assistance, not to work

375ea797
Community Member

ETA on Upwork's provision of the CFDIs? Also, will this be retroactive from June when this collection started?

Thanks!

fernandabuenfil
Community Member

Hi!

 

Can you please provide Upwork's RFC number. This is for freelancers to show goverment you ARE in fact holding this taxes. If you don't provide Upwork's RFC we have no way to show we already are paying the tax so we are charged double by the Mex Government .

 

It's OK for Upwork to hold the taxes, just please provide Upwork's RFC number so we as freelancer don't pay double, if we don't have that number it means 2 things:

 

1. Upwork is holding that amoutn for itself or

2. the Mex government will hold it for itself

 

anyway, the freelancers end up losing, so please please provide Upwork's RFC number, thanks !

cardenas-jocelyn
Community Member

How did you change the regime without having an RFC from Upwork? Today is just not possible. So we are still paying double taxes and it's been 3 months like this. 

karina52
Community Member

Hi Upwork, any news about your RFC? We need THIS ASAP