How do I handle my tax issues if I work from Mexico for a company in the United States?

[Zevahc]

I joined a company as a contractor a few months ago, working from Mexico for a company in the United States.

The money I earn is transferred directly to my bank account in Mexico.

What are my tax obligations in this case?

Do I have to pay taxes on this income in Mexico?

Should I declare this income before the SAT on a monthly basis?

DEEL generates a W-8BEN form for me but I have no idea what to do with it.

[Zevahc]

Ingresé a una empresa como contratista hace unos meses, laburo desde México para una empresa en Estados Unidos, ante lo cual el dinero ganado lo transfiero directo a mi cuenta de banco en México.

¿Cuáles son mis obligaciones fiscales en este caso?

¿Debo pagar impuestos sobre estos ingresos?

¿Debo declarar este ingreso ante el SAT de manera mensual?

[CassyL]

HI @Zevahc, 

Thanks so much for sharing this question in the Deel Community! For ease of navigation for other users that might have this question in the future, I've gone ahead and merged both of your original posts into this thread. 

Given that this scenario is unique to you and your employment with a US based company, I've reached out to our team of experts to get a better sense of your specific tax obligations when filing in Mexico. However, in the meantime, I've also found some helpful resources regarding W-8BEN/W-8BEN E, and how this might impact your declaration. 

Per this Guide To Tax Form W-8BEN (US):

Form W-8 is for non-US citizens or businesses to verify their country of residence for tax purposes. Filling out a W-8 can mean avoiding a 30% withholding tax on US income. But whether you need to file a W-8BEN or a W-8BEN-E depends on if the IRS considers you an entity or an individual. 

Please note that contractor LLCs with only one shareholder are considered individuals by the IRS and must complete the individual form.

Additionally, in this article about US Tax Forms: 

If you are a contractor outside of the US but have contracts with US-based clients, you will first need to confirm that you are not a US resident. Deel will generate a W-8BEN for you, which states that you are not a US citizen and will not pay US taxes.

I'll follow up with more details regarding your questions on paying taxes in Mexico, and declaring income before the SAT on a monthly basis. However, should you want to reach out to our experts (or for any Community members in the future that has additional questions specific to their own account), you're welcome to submit a ticket here. 

Thanks so much, 
-Cassy

[CassyL]

Hi @Zevahc, 

I wanted to follow up on your question with some additional context I found around tax obligations. 
The income of Mexican citizens/residents is subject to income tax (“ISR”) in its entirety, regardless of its source/origin. The rates range from 1.92% to 35% for individual income taxes, per the chart below. Additionally, as you mentioned in your original post, the filing is performed on a monthly basis.  

Hope this helps to add some more clarity for you!
-Cass.