Tax regime, which one to choose?

Are you about to start your business?

Do you work as a freelancer and want to give invoices?

Do you know which SAT tax regime you should register for?

 

If you are going to start a business or generate income independently, one of the main procedures is to register with the SAT and to do so you must choose the type of tax regime that best suits your needs, since the tax obligations you must comply with will depend on this.

Here we present the main systems so that you can choose the one that best suits your needs:

Types of tax regime for Individuals (personas físicas)

If you are self-employed and you are the sole owner of the business, you can choose to register as a physical person and choose the regime according to the activity you are going to perform.

 

  1. Professional services (fees). If you provide professional services independently to companies, government agencies or individuals in general, such as accountant, doctor, lawyer, among others.
  2. Business activities. If you carry out commercial, industrial, trucking, agricultural or livestock activities, you are entitled to the regime of business activities. For example, restaurants, cafeterias, hardware stores, mechanical workshops, among others.
  3. Leasing of real estate. If you get income from renting out real estate.
  4. Tax Incorporation Regime. If you carry out business activities, selling goods or rendering services for which no professional title is required.

 

 

Types of Tax Regime for Companies (Personas Morales)

In the event that your venture has been constituted jointly with one or more partners, you can opt for the following regimes, which will depend on your corporate purpose.

  1. General

Applies to all for-profit organizations. For example, corporations such as corporations, limited liability companies, etc. It is important to note that, for this type of regime, your company must be incorporated before a notary public.

 

 

Accumulation of income

It is important to note that the SAT provides a facility for compliance with tax obligations for those organizations that have a maximum annual income of five million pesos.

The main characteristic of this facility is that ISR (Income Tax) is paid through cash flow, i.e., accumulating authorized income and deductions until they are effectively collected or paid.

 

Simplified Corporations per Share

Simplified Corporations by Action (SAS) is a new way to incorporate your company, derives from the general regime and allows one or more individuals to incorporate your company through electronic means with an initial capital that can go from $1.00 and does not require the intervention of a notary public. With this, the aim is to reduce informality and simplify the incorporation process for micro and small enterprises.

 

  1. Non-profit:

All nonprofit organizations such as charities, religious organizations, civil societies, etc. should be incorporated under this regime.

 

 

Summary:

  1. Identify whether you will undertake your venture on your own or in conjunction with one or more partners.
  2. Identify your social object, i.e., what service you will provide or sell.
  3. Select the Tax Regime that best suits your needs and business characteristics.

 

 

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