Recently there’s been an uproar of confusion regarding an acronym known as an RFC and another document known as a Constancia de Situacion Fiscal.
If you’re scratching your head, you’re not alone.
A few weeks ago some people started getting notices from their electric company asking them for their Constancia de Situacion Fiscal (tax certificate in Mexico). And to get this you need to have an RFC- so naturally, a lot of misinformation started circulating the online groups. So, let’s clarify a few things because a lot of people are stressing out when they probably don’t need to.
Let’s start by defining what is an RFC?
The RFC or Federal Taxpayers Registry is a unique registration code that serves to identify every person that carries out an economic activity in Mexico where taxes are collected or have to be paid to the SAT (the Mexican equivalent of the IRS).
Some of these economic activities are employment in Mexico, buying a rental property you plan to make income from, submitting “facturas” when you sell a home in Mexico for the purposes of avoiding capital gains, and in some cases opening a bank account in Mexico that pays you interest.
Now a lot of you will never need an RFC. Especially if you rent and your utilities are in your landlord’s name. Or if you never have a bank account in Mexico. Or if you never plan on buying a new car from a dealership. Most expats moving to Mexico will never work for a Mexican employer and therefore will never have a tax liability.
But somehow the information on the various expat groups has made people question whether they need this number or not. And although I believe you don’t need it right away in most cases, there could be some benefits to getting one for the future. But first, let’s talk about how you can get an RFC and why I think you should wait.
How do I get my RFC?
To begin with, you must have your CURP which is: The Unique Population Registry, our version of the social security number which is an instrument used to register individually all the inhabitants of Mexico, including nationals and foreigners, as well as Mexicans living in other countries.
You get a CURP when you become a resident of Mexico. So if you’re a tourist, you don’t even need to worry about this step yet.
Once you have your CURP, you can then apply for your RFC at the SAT- Tax Administration Service. Which oversees and reviews our tax returns and our tax payments. The SAT is Mexico’s equivalent of the IRS.
To get an appointment with SAT there is a virtual queue and depending on the city you are trying to apply to it can take 2-6 months for you to get an appointment. This is a process that must be done in person or through a Power of Attorney to your designated facilitator.
In our COMPLETE Mexico Relocation Guide we have a list of vetted and trustworthy facilitators who can help you obtain your RFC if you need one.
Once you have obtained your RFC, you will be able to request your Tax Status Certificate or Constancia de Situacion Fiscal- which contains data on your identity, location, and fiscal obligations as a taxpayer. This document is only used when you plan to generate a factura (or tax receipt) for the purpose of making deductions to your taxes.
But I’ve Heard I Need It Or My Electricity Will Get Cut Off?
Recently many people got a notification from the CFE- Comision Federal de Electricidad (or the federal electric commission in Mexico) stating that their service could be interrupted if they didn’t update their Constancia de Situacion Fiscal.
And that’s because even CFE (Federal Electricity Commission) along with other companies like Cable TV, Telmex, gas services etcetera are requesting you to update your personal and fiscal information. So that when they issue your electricity bills, tall information is correct as these are bills susceptible to deduction from earnings and have all the requirements that the law mandates.
But don’t worry if you don’t have this document! They will not cut off your electricity. They are complying with the new tax laws that went into effect in January 2022 and have sent out a mass memo to all of its customers.
So I suggest you wait. Because unless you need to sell a house, right now, or open a CFE account, or open a new internet service account today- then you really don’t need an RFC right away. You’d be better off waiting the 4 – 6 months in a “fila virtual” (virtual line, online) waiting to get your email notifying you of your appointment with SAT.
Other Cases When You May Need an RFC
There are some additional cases where even if you don’t plan to buy a house, set up new utilities, a new internet account, or generate an income in Mexico that you may still need an RFC.
And this is when you plan to buy a new vehicle at a dealership. More and more dealerships are requesting buyers to have an RFC as part of the car buying process. And the lack of an RFC number could prevent you from making the purchase until you have fulfilled the SAT requirements.
When I Recommend Getting an RFC
If you are a visitor, renting, staying on a tourist visa, with no plans of purchasing a home, no income generated of Mexican origin, and do not hold a bank account then you don’t have to worry about getting an RFC.
But I still recommend residents to look into the process because it seems things are changing and you may need it in the future. I would however wait until the problem with the lack of appointments at SAT has been settled and you don’t have to wait in line with everyone else. I don’t know when this will happen exactly but I would assume it would be at least another 6 months or so.
If you are a resident in Mexico, you own property of any type or receive any type of income that originates from Mexico, or hold Mexican Bank accounts should at their earliest convenience start the process of acquiring their CURP. Once you do this you should start to consider getting your RFC, as well as your Tax certificate (Constancia de Situacion Fiscal) so you can be better prepared if it becomes more of a requirement in the future. At the very least it is a good idea to wait until the virtual queue isn’t so long.
If you need assistance, please consider our COMPLETE Mexico Relocation Guide where you can find a directory of Facilitators to help you get your residency visa, your CURP, your RFC, and also our list of recommended CPAs in Mexico that can help guide you in the Mexican Tax Law.