Sunday, December 14, 2014

the envelope -- please

Yesterday I was puttering around the house doing my usual morning chores.

The telephone rang.  It was a close friend of mine.  He was curious if I still had my local Mexican bank account.  I told him I did.  I thought he might be interested in setting up some form of transfer for future business transactions.

I was wrong.  He asked if I had received a notice from Hacienda (the Mexican tax folks) for income taxes due in 2012 and 2013.  He had just received a mail notice of an assessment for those two years based on cash deposits he made to his Mexican bank account.

Most of my mail still goes to my post box in San Patricio.  (I have yet to receive a single piece of mail at the new house.  My neighbors tell me the postal clerk at the Barra de Navidad office is as inefficient as the lot in Melaque are efficient.)

I drove over to check the box. There was nothing in it.  But, when I talked to the postmaster, he showed me a stack of tax notices that was nearly as thick as the usual TelMex pile.  He said most were addressed to "foreigners."  Fortunately, my name was not amongst them.

Off I went to see what my friend had received.  There were two notices.  One for 2012; one for 2013.  There was a space for the name of each bank, and a column for each month of the year.  The amount deposited in any month was listed in the appropriate column.

The notice totaled the deposits, and then told the recipient how much tax was owed.  An explanation of the rate used appeared nowhere on the notice.  I assume the tax is based on the presumption that all cash deposits are income for which tax has not yet been paid.

I have written before of the current administration's attempt to broaden the tax base in Mexico and to increase the government's take from the current 11% of GDP to 17% (killing ivan's cow; pass the tax plate).  As part of that program, a new tax was imposed starting in 2012 to tax 3% of all cash deposits made to a bank account in excess of $15,000 (Mx) each month.  Once again, the presumption was that the cash reflected untaxed revenue from Mexico's omnipresent informal cash economy.

The 3% tax was repealed at the end of 2013 as part of a new tax scheme that went into effect in 2014.  My friend's bank statements indicate he paid the appropriate tax when the cash was deposited for those two years.  That leaves the question what this tax assessment reflects.

Of course, my speculation and rambling is just that.  Speculation and rambling.

I have absolutely no skin in the game.  Any money that went into my account was transferred there electronically from my late lamented Banamex USA account.  An early victim of the current White House's attempt to make banking more difficult for those of us who obey the law.

My fellow blogger Sparks provided me with a link to the Chapala message board.  Not surprisingly, Chapala would be a prime hunting spot for Hacienda to discover expatriates with unreported income.

The comment in the link was started because a social security recipient had received a similar tax dun notice, even though all of the cash deposited was from his governmental support check.  According to the thread, the fellow's accountant went to Hacienda, explained the situation, and the notice was withdrawn. 

At least, that is what the message board says.  And we know that they are the fount of all things reliable.

But there is a grain of good advice in the thread.  I know of no expatriates who are experts in Mexican tax law.  The assessments are so opaque, it is impossible to know the source for the obligation.

I do know one thing, though, in watching the enforcement efforts of Hacienda.  It is not an agency to be handled lightly.  Ignoring the notice may give the recipient an opportunity to learn a lot more than they want to about their adopted country.

Whether an accountant is necessary is a question not for me to answer.  However, there appear to be enough people crowding into this paddleless canoe that joining forces would seem to make sense.

Other than that, all I can do is wish you who have received the notices, buena suerte.

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