What is an RFC, and what is it used for
A Registro Federal de Contibuyentes, or RFC, is Mexico's tax ID number. The Servicio de Administracion Tributaria (SAT), the Mexican version of the IRS (which has offices in every state in Mexico), is the agency you obtain an RFC through.
More recently, you are starting to need the RFC for more things than because you have economic activity in Mexico. For instance, Mexican tax laws are robust and complicated. They allow an individual or business to write off many items, including electricity, water, cable, and cell phone bills. However, you must do more than show a receipt when you pay your taxes to get a write-off. The receipt must be attached to an RFC number when you receive the receipt.
Therefore, many of the before-mentioned utility facilities and phone companies are asking for RFC. Moreover, some states are starting to ask for them when registering a car (for help with this process, click here), with some banks following suit as well.
Who can obtain an RFC?
You must have a CURP number to get the RFC, meaning you will need to be a resident to get one. No one on a tourist visa can get one.
Moreover, a temporary resident must still get a work visa for economic activities in Mexico.
Many expats and digital nomads take this to believe that they must get a work permit if they want an RFC to open a bank account. Some clients have even told me that an employee in SAT told them they needed a work permit to get an RFC as a temporary resident.
However, as I mentioned before, you need the RFC for more and more things. If you needed a work visa to get an RFC, every expat retiree in Mexico would be required to get a work visa to open a bank account, get power to their home or register a car. That is not happening. Moreover, you need the RFC number before starting the work permit process.
The idea that you need a work visa to get an RFC as a temp resident stems from needing to understand that there are effectively two types of RFC. One type is with an attached electronic signature called an e.firma. The other is an RFC by itself without an e.firma. The e.firma effectively activates the RFC, allowing you to have economic activity. Therefore, a solo RFC has a tax status of ‘Sin Obligaciones Fiscales’ (No Tax Obligations), as they will not make any money in Mexico.
In conclusion, any resident can get an RFC. However, temp residents can only obtain the e.firma to attach to the RFC with a work permit.
How can accountants in our network help you obtain an RFC?
An accountant makes the appointment for you, collects all the information the SAT will need for the appointment, and tell them what type of RFC you will need (with or without the e.firma). Then, on the appointment day, they will walk you through the process.
There are no fees from the SAT for an RFC or e.firma, at least as of March 2023. So, the only costs you will accrue would be to the accountant for his/her time. The fees depend on what process you are trying to complete, as they take differing amounts of time.
If you want more info on the process or how much it will cost you, please get in touch with us via the live chat or the contact us page.
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