Withholding Income Tax of Mexican Freelancers
While many people all over the world have shifted to e-commerce to work and do business, some users have taxes imposed by the government where they are located. In Mexico, there are legislative rules and regulations on taxes involved with digital services. As an e-commerce company, Freelancer.com is required to abide by regulations of countries and states where our services are offered.
Based on the new tax law enforced by the Mexican government, starting May 17th 2021, we are required to withhold a portion of your earnings from projects and contests if you are a freelancer residing in Mexico. The amount to be collected will be based on whether you have provided your Clave en el Registro Federal de Contribuyentes (RFC) in your Tax Information settings in the Payment & Financials page or not.
● Only 1% of your earnings will be withheld if you have provided your RFC number.
● 20% of your earnings will be withheld if no RFC is provided in your Tax settings.
The withholding amount will then be submitted to the Mexican tax authorities. Any excess tax collected can be claimed from your government. For assistance in claiming tax refund and for other tax-related inquiries, we strongly advise for you to contact your local tax advisor to get accurate recommendations.
To update your RFC details, follow these steps:
- Click your profile picture thumbnail from the main menu bar, and choose Settings.
- Click Payment & Financials.
- Go to the Tax Information section.
- Input your RFC in the text field.
- Click Update RFC to save changes.
Disclaimer: Freelancer and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors.