NCM.com, Daniel Rodríguez, Feb. 19
According to the amendment made to paragraph ‘a’ in the first clause of Article 9 of the Código Fiscal de la Federación in México, the money transfers that Mexicans send to their country would be subject to federal taxation
For example, this means that out of the $13.3 billion dollars that were sent last year to México, 35 percent ($4.6 billion) — more or less the tax owed — would have to be paid to the government.
In mid February, this amendment was explained in Oaxaca, Mexico by José Antonio Pérez Ramos, general director of the Grupo Afiscco (a company that produces the Agenda Tributaria Electrónica, a compilation of tax laws distributed through the Internet.)
Article 9 of the Código Fiscal de la Federación established in paragraph ‘a’ that those physical persons will be considered residents of Mexico who have made their home in the country. And there were two exceptions: residency would be lost when the person lived in another country for over 183 consecutive days or have confirmed that they have obtained residency abroad for economic reasons.
Notwithstanding, those two exceptions are abolished with this amendment and a new concept is established: the ‘centro de intereses vitales’ to consider as residents of México those physical persons that not only have their home there, but also in another country and their ‘centro de intereses vitales’ is found in national territory.
The ‘centro de interes vitales’ is considered to be in México when among others, the physical person fulfills the following requirements: When more than 50 percent of their total income is obtained by the physical person during the calendar year is a source of income in México.
Pérez Ramos told a México City newspaper that “notwithstanding those two stipulations, it will be left to the fiscal authorities to decide what will be the requirements to consider that the resident abroad has his ‘centro de interes vitales’ in México.
Immigrants who work in the United States are not legal residents; are constantly sending money to their families, thus, their family, goods, friends, etc. are in this country, a strong argument so that fiscal authorities consider that their ‘centro de intereses vitales’ is found in México and subject the income they’ve earned in another country, which is then sent to México, to federal taxes.”
Carlos Villanueva, president of the Asociación Mundial de Mexicanos en el Exterior (AMME), when he was interviewed via telephone, said he didn’t know all of the amendment’s details but if that were the case “it would be robbing our families. Something very wrong that would translate into an injustice, since that money has been earned in this country and shouldn’t be subject to another tax.
“That would be double taxation and a violation of their rights. If that is the case, naturally we strongly oppose to imposing that tax.”
Villanueva, who recently organized the AMME’s annual convention in Las Vegas, said “that is why I insist, the government (in México) only sees us with dollar signs in their eyes. That is why we are in urgent need of a new political party that will defend us (Mexican immigrants) from these injustices.”
“It would be tragic if that happened,” he stressed.
Statistics show that in the United States there are nearly 25.5 million people of Mexican origin, out of which ten million were born in México and around 4.8 million undocumented immigrants live in this country.
Last November, President Vicente Fox mentioned that the almost $14 billion dollars that are sent by fellow nationals surpass the investment the very government makes into the agricultural, educational and social development sectors, which, in other words, would be equivalent to nearly 70 percent of families in México receiving a minimum wage salary for a whole year.
The fact is that these money transfers sent my Mexican nationals represent the country’s second source of income next to the exporting of oil, making Mexico, according to the Internacional de Trabajo organization, number two in money transfer revenue at a global level after India.
In México it is known that 48 percent of the money that is transferred goes directly to rural areas, where tremendous poverty exists.
The states that most benefited from these monies last year were Michoacán with $1.7 billion; Jalisco with $1.3 billion; Guanajuato with $1.2 billion; the state of México with $1.03 billion; and México City with $835 million.
Carlos Villanueva said that if the new tax law is applied, people will find other ways of sending their money to México and will not use services where they might be subjected to this tax.
Last year, the Mexican government announced that electronic money transfers were replacing money orders and the sending of cash, which made it clear, in a way, that Mexicans living in the United States have greater access to financial and banking systems everyday.