The Tax Administration System (SAT) believes that there are enough Uber drivers that make at least 25,000 pesos per month and that, when audited, will positively impact the national treasury. If it were the case, the happy driver of Uber, owner of his own vehicle, who works 7 hours a day every day of the week, without rest and always circulating with passage, for, at the end of the month, returning exhausted to home with a net profit of 18,000 pesos after taxes.
The SAT issued a rule that allows retaining ISR and VAT to the drivers of transport companies through digital platforms (Uber, Cabify, DiDi, Urbvan, Jetty, Beat, Bolt and the ones added this week) starting at 25,000 monthly weights, with tiers of 35,000, 50,000 and above 50,000!
The rule applies in the same way for food delivery people (Rappi, Uber Eats, Postmates, Cornershop, Without Apron and those who join this week), a couple of steps down in the geometry of precariousness.
It was incorporated on April 22 in the Miscellaneous Fiscal Resolution for 2019 and published a week later in the Official Gazette of the Federation. It allows transport companies through application and prepared food delivery platforms to withhold taxes from their drivers: VAT is 8% in all cases, while the ISR steps are 3%, 4%, 5 % and 9% for the most prosperous. “Permit” is a key verb: neither Uber nor Rappi – I use Uber and Rappi as generics, because they are leading companies in their respective segments – are obliged to withhold taxes neither from drivers nor distributors.
|Table of retention rates|
|Amount of monthly income||Retention rate (%)|
|Up to $ 25,000.00||3||8|
|Up to $ 35,000.00||4||8|
|Up to $ 50,000.00||5||8|
|More than $ 50,000.00||9||8|
The rule states that ISR and VAT will be withheld from “natural persons who independently provide the land passenger transport service” through technological platforms. This does not mean that the retention applies directly to the driver, but to the owner of the vehicle registered in the platform, according to the interpretation of Guillermo Mendieta González, a member of Mendieta y Asociados and president of the Fiscal Audit Committee of the Association of Public Accountants of Mexico (CCPM). If this is the case, the income calculation of the first paragraph should be done as if it were outsourcing operating through Uber, with a salary for the employee-driver, and not before a driver undertaking individually with his own vehicle and who in itself already looks difficult to reach said profits (*).
The theory this does not fit in the case of Rappi’s distributors, but it makes the SAT send the message that it monitors the actors of the digital economy. With this rule, the SAT also gains time in the search for a solution to the real tax problem: how are profits generated in Mexico taxed by companies with fiscal residence outside the country? While the inspiration comes, do I tell you Uber so you understand Airbnb?
(*) The calculation of income I did with the calculator that Rogelio Castillejos, MBA and logistics expert, designed for El Economista in 2016 updated with prices of 2019. It is considered a vehicle with invoice value of origin of 200,000 pesos, as required the regulation in the CDMX, the commission payment of 25% to Uber and the commission of 1.5% of each trip for a public mobility fund. I worked with an average rate of $ 87.33, 6.81 kilometers and 20:30 minutes per transfer, which are the averages of my trips in UberX in the CDMX during 2018 (92 in total).