Lodging or vacation rental industry in Mexico is subject to two taxes: VAT and Lodging Tax.
VAT
Every person doing business in Mexican territory is required to collect VAT equal to 16% of the price charged, regardless of their tax residency.
If you have a property located in Mexico, you are required by law to collect VAT from your customer or guest. Because of this, Airbnb automatically adds VAT amounts to your listings’ price (including cleaning fee). For example, if you offer a property at $400 per night, Airbnb will automatically add a $64 VAT charge, totaling $464 payable by your customer or guest. VAT is paid by the traveller making the reservations. It does not affect your net earnings.
If you are a foreigner but have an individual RFC (Mexican Tax Registration number) registered on your Airbnb profile, Airbnb will withhold half (50%) of the total VAT added to your listed price. In this case, Airbnb will remit 50% of VAT to the Mexican Tax Authority and the remaining 50% will be remitted to you, and you will be required to pay this amount to the Mexican Tax Authority.
If you are a foreigner but have a corporate / business RFC (Mexican Tax Registration number) registered on your Airbnb profile, Airbnb will not withhold any VAT added to your listed price (including the cleaning fee). In this case, Airbnb will remit all of the VAT to you and you will be required to pay this amount to the Mexican Tax Authority.
If you do not submit an RFC (Mexican Tax Registration number) on your Airbnb profile, Airbnb will collect the total VAT added to your listed price (including the cleaning fee) and remit it to the Mexican Tax Authority on your behalf. Since VAT is a surcharge added to your listing’s price, it does not affect your net earnings.
It should be noted that the VAT withheld cannot be credited against your income tax in Mexico or be used as a foreign tax credit in your home country.
Lodging tax
Just like VAT, lodging tax will be automatically added to your listing prices and collected if your property is located in one of the following states:
- Baja California
- Baja California Sur
- Campeche
- Ciudad de México
- Colima
- Estado de México
- Guerrero
- Jalisco
- Michoacán
- Nayarit
- Nuevo León
- Oaxaca
- Puebla
- Querétaro
- Quintana Roo
- Sinaloa
- Sonora
- Yucatán
Lodging tax rates range from 2% to 7% depending on the state. This tax will also not affect your net income, since it is a charge added to your listing prices.
Like VAT, lodging tax withheld may not be credited against Mexican income tax or be used as a foreign tax credit in your home country.
Invoicing
If your guest requests an invoice from you, both of these taxes, VAT and lodging tax, must be included, so it will look as follows:
| 2 day stay | $400.00 |
| VAT 16% | $64.00 |
| Lodging tax 3% | $12.00 |
| Total | $476.00 |
Please note that you may only receive $400, before any withholding taxes described above, since VAT and lodging tax will be withheld and remitted to tax administration on your behalf if you do not provide a RFC number in your Airbnb profile. If you have a Mexican Tax ID Number the invoice should comply with Mexican invoicing guidelines, most importantly it must be issued electronically.. If you do not have a Mexican Tax ID Number, you are not bound to follow the Mexican invoicing guidelines, but should issue an invoice on your local legislation terms.
Airbnb will provide you with a withholding certificate as support evidence that these taxes were withheld and remitted to tax authorities.
Lodging tax withholding certificate
In some Mexican states, Airbnb withholds this tax for each night of lodging and pays it on your behalf to the corresponding authorities, making it easier for you to comply with this obligation. The states where Airbnb withholds this tax can be consulted on section Lodging tax.
To assist you on the confirmation of this withholding, Airbnb has created a certificate with detailed Lodging tax data. These certificates will serve as proof of the tax you have paid as a host via withholding, making it easier to accurately comply with your state tax obligations.
The issuance of these certificates will be done at the end of each quarter, covering the tax paid during those three particular months (January-March, April-June, July-September and October-December). The process to obtain your certificate will be like the current procedure for downloading monthly service invoices and Mexican federal tax withholding certificates.
The first Lodging tax withholding certificate is available from January 2024, with the tax information corresponding to the months of October, November and December 2023.
This measure aims to assist in your tax compliance as a host, in addition to assuring tax transparency and helping the Airbnb host community in meeting their obligations.