Why do I need to have an RFC (Federal Taxpayers Registry)?

And what is a tax status certificate? (Constancia de situación fiscal)? These are the most recent and most pressing questions I have been receiving, let me explain in a sensible and logical fashion, possibly an area that oftentimes seems to not make any sense to us at all.

Let's start by defining what the RFC is:

The RFC or Federal Taxpayers Registry is a unique registration code that serves to identify every person that carries out an economic activity and must contribute to the public expense fund through contributions based on earnings to the SAT (Tax Administration Service), the Mexican version of the IRS.

How do I get my RFC?

To begin with, you must have your CURP which is: The Unique Population Registry, our version of the social security number which is an instrument used to register individually all the inhabitants of Mexico, including nationals and foreigners, as well as Mexicans living in other countries (you get this number once you acquire your temporary or permanent residence).

Once we obtain your CURP, we then apply for your RFC at the SAT- Tax Administration Service. Which oversees and reviews our tax returns and our tax payments. We will generate an appointment in the nearest offices since due to the pandemic over the past 2 years a substantial waiting list of people exists, a virtual line causing many delays. This is a process that must be done in person or through an attorney-in-fact empowered with a Power of Attorney (see previous articles for POA explanations).

Once you have obtained your RFC, you will be able to request your Tax Status Certificate, which contains data of your identity, location, and fiscal characteristics of the taxpayer, it describes what type of taxpayer you are and under what tax regime you are registered.

Mexican laws are constantly changing, and even more so in fiscal and tax matters, which is why one of the newest reforms of the Mexican Fiscal Miscellaneous Reforms of 2022, requires all institutions that issue CFDI (facturas) or tax-deductible invoices, to have 6 basic elements as of June, in order to be able to be feasible to use as a deduction.

1.- RFC

2.- Regime of fiscal incorporation (which can be found in your tax status certificate).

3.- Zip code

4.- Form of payment

5.- Method of payment

6.- Usage

Therefore, even CFE (Federal Electricity Commission), Cable TV, Telmex, gas services etcetera are requesting you to update your personal and fiscal information. So that when they issue your electricity bills, tall information is correct as these are bills susceptible to deduction from earnings and have all the requirements that the law mandates.

This is of importance for people who are liable to pay taxes and make use of their deductible invoices at the time of filing their monthly or annual returns.

For all situations where we are making a large acquisition such as a home, or a vehicle the lack of an RFC number will prohibit us from making the purchase until we have fulfilled the SAT requirements.

For all situations where we are selling an important asset such as a home, land, services, or a vehicle, the RFC number will be required, or the sale will not be legally completed. If you are a visitor, renting, staying on a tourist visa, with no plans of purchasing a home, no income generated of Mexican origin, and do not hold a bank account then you are exempt from this process.

All guests of the Mexican federation that own property of any type or perceive any type of income that originates from Mexico or hold Mexican Bank accounts should at their earliest convenience start the process of acquiring their CURP, and RFC, as well as their Tax certificate as the lack thereof, will most certainly cause substantial issues in the future.

This is a mandatory federal program that can cause undue headaches, litigation, and fines if not implemented. The RFC and CURP as well as the tax certificate are federally mandated and required for both temporary residents and permanent residents An old Mexican saying loosely translated is ¨An ounce of prevention is better than a kilo of solution¨. Get it done as a word to the wise.

Thank you all for your questions this week, for more specific information on Inmtec Legal Services™, Inmtec Title Services™, Inmtec Insurance™, Estate Planning, Asset Protection, and AfterLife™ Medical Advocacy by Inmtec™ please contact the author: Angel Marin Díaz at: info@inmtec.net 415-121-9005 and 415-121-8943

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