In Mexico, there is no differentiation between residents and non-residents when it comes to the payment of taxes. As a United States citizen, you are still required to pay taxes if you own rental property in Mexico that you rent out on Airbnb.
As a rental property owner, you are required to pay Mexico Income Tax, called ISR (Impuesto Sobre la Renta) in Spanish, and Mexico Value Added Taxes, called Impuesto al Valor Agregado (IVA) in Spanish. Thanks to a tax treaty between the United States and Mexico, the IVA that you pay is deductible on your US tax return and you can use the amount of Mexico Income Tax paid to offset your US taxes so that you are not doubly taxed.
In order to pay income taxes in Mexico, you must first register with the Servicio De Administración Tributaria (SAT), which is part of the Finance Ministry (the Secretaria de Hacienda). You are required to register regardless of your residential status if you receive any income in Mexico, including rental income. Upon registering with the SAT, you will receive a tax identity, known as Registro Federal de Contribuyente (RFC).
For non-residents, only income that is earned in Mexico is subject to taxation. While Mexico does require both individuals and businesses to pay taxes, they pay taxes at different rates. The annual tax return must be submitted at the latest by April 30th following the end of the tax year in question (January to December).
1. A blind deduction of 35% of total income, without any additional deductions. A 35% income tax is then paid on this net income.
2. A 30% tax on income, minus the deductions that are permitted. Possible deductions include property tax, maintenance, construction loan interest, insurance, employee wages, and commissions paid to rental agents and property managers.
3. Individuals who are non-residents of Mexico and do not have an RFC or FM3 visa can pay a 25% Income Tax (ISR) with no deductions permitted, if they go through a Mexican company or individual, such as a Mexican accountant or settlement company per resolution issued on February 15, 2010 by SAT. By paying this 25% income tax, no annual filing will be due. However, IVA must still be collected from your Airbnb guests. Individuals who own properties in Mexico through LLCs are also eligible for this program.
You are required to collect IVA from your Airbnb guests at rate of 16% in the interior of the country and 11% in the border zones. The due dates for IVA are determined by your RFC and can be found here. Each state government also has its own taxes on lodgings which you are required to pay. This tax is roughly 2-3%. There may also be municipal government taxes assessed on your real estate property.