Graduate in Law focused on tax and administrative matters. Member of Taxfi, experts in fiscal, accounting, and tax issues in Mexico.

‍

As a Higlobe user who receives income from abroad, it's understandable to have questions about the tax implications. Let’s address this topic, shall we?

First, it's important to note that Higlobe is an intermediary platform that helps individuals and businesses in Mexico receive payments from clients from the USA. This service can be particularly useful in avoiding the high commissions often charged by banks or other platforms for international money transfers.

Now, when it comes to taxes, the basic principles remain the same, regardless of whether you're using Higlobe or not. You'll still need to pay Income Tax (ISR) and Value Added Tax (VAT) on the income you receive from your international clients. With this in mind, some recurring questions that come to the mind of our users, like:

• Are my taxes modified when using Higlobe?
• Do I have to pay more ISR or more VAT if I am a Higlobe user?
• Am I required to declare anything additional to the SAT for using the platform?

The ISR, being a direct tax, is the responsibility of the individual or entity receiving the payment. The applicable rates are determined by the Income Tax Law (LISR). For legal entities, the ISR has a fixed rate of 30% on profits. For natural persons, the rates can range from 1.92% to 35%, depending on the level of income, with the exception of the Simplified Trust Regime.

It's important to note that the amount of ISR you'll owe is not dependent on the platform, bank, or application you use to receive your payments. The determining factors are whether you're a natural or legal person and the level of income you've generated.

In contrast, VAT is an indirect tax, which means it's not the responsibility of the person collecting the money, but rather the client or final consumer. VAT can have three different rates: 16%, 8%, and 0%. Additionally, there are certain products and services that are exempt from VAT.

For example, if your product costs $1,000 Mexican pesos, and is subject to the 16% VAT rate, you must offer it to your clients at $1,160 Mexican pesos. In this operation, your client will be the one who covers the $160 pesos of VAT, and not you, due to the nature of this tax, which is transferable.

To determine the appropriate VAT rate, it's crucial to thoroughly analyze each specific case, reviewing both the Value Added Tax Law (LIVA) and its regulations. This meticulous approach ensures that the correct tax treatment is applied.

One particularly important factor to consider is the income received from abroad, as Higlobe users often have this unique characteristic. This international aspect brings a special tax treatment regarding VAT that requires careful consideration.

The LIVA (Value Added Tax Law) provides clear guidance on this matter:

Article 2o.-A.

"The tax -speaking specifically of VAT- Will be calculated by applying the 0% rate to the values ​​referred to in this Law when the following acts or activities are carried out:

(…)

IV.- The export of goods or services, in the terms of article 29 of this Law.”

In essence, the law stipulates that a 0% VAT rate applies to the “export of services”, which is a crucial consideration for Higlobe users who often receive income from international sources. This same device can also direct us to Article 29 of the same Law, where is clearly established that the term “export of services” refers specifically to the following economic activities:

Technical assistance, information related to industrial, commercial, or scientific experiences, maquila operations, advertising, commissions, filming or recording, information technology service, etc. 

The same article 29, in its last paragraph, further clarifies that:

“(…) will apply to residents in the country who provide independent personal services that are used entirely abroad by residents abroad without establishment in the country”

In other words, if you are an individual or a business entity residing within the national territory and you provide services to foreign residents who use those services exclusively outside the country, then the payments you receive for those services will be subject to a 0% VAT rate.

So the VAT on my services varies if someone from abroad pays me through Higlobe?

When it comes to VAT on your services, the good news is that if someone from abroad pays you through Higlobe, the 0% VAT rate applies. This is because those who use Higlobe are not actually receiving services from you, but rather, you're providing your services to a resident outside of Mexico. Higlobe is simply acting as an international payment intermediary in this case.

You may notice that when the funds are transferred from your Higlobe account to your Mexican bank account, the transfer is made through a company incorporated in Mexico. However, this doesn't mean you're providing services to that company. Higlobe has to comply with certain legal requirements to make its platform available to you, and this is why the transfer might appear to be made through a local company.

It's crucial that you keep all the necessary information and documentation to support the fact that your services are being provided to someone outside of Mexico, and not to Higlobe itself. This will come in handy if the tax authorities ever decide to review your situation.

With what documents can I prove that I provide services abroad?

Start by issuing an invoice for your fees, making sure it's properly stamped and includes the details of your foreign client. Remember, there's a generic tax ID (RFC) that can be used for invoicing international customers.

In addition to the invoice, it's highly recommended to have the service provision contract you signed with your foreign client. This contract serves as proof of the services you provided. You should also gather any other relevant documentation, such as project portfolios, email exchanges, or other deliverables, depending on the nature of your work.

With this information, you'll be able to address any questions or concerns that may arise regarding the tax implications of using a platform like Higlobe for international payments. Feel free to share this documentation with your accounting advisor, who can provide guidance on properly declaring your services rendered abroad.

If you have any further questions, don't hesitate to reach out to the Higlobe customer support team at [email protected]. They'll be happy to assist you. And be sure to keep an eye on the Higlobe blog, as we'll continue to publish content related to taxes and personal finance matters.