# Missing interest from my Mexican deposit account



## sbeech (Apr 3, 2014)

Evening all.
I do not post very often on here despite 6 years now living up on the Mexican Altiplano, semi-retired and living on my English pension and bank interest from my Mexican deposit account.................I do, however, log in often to review the topics discussed and value the advice given on here.
I have a Bancomer deposit account, where the interest accrued keeps me in beers and tacos.......I went down yesterday to renew the account and check my balance but the stated, printed, signed-for amount 3 months ago was not in my account!!
Normally the Mexican government take 10% of my bank interest as "taxes", not a problem and I sign to say I agree, but this time there was 25% missing and the manageress was apparently explaining to me (despite 6 years here I can only understand about 50% of what people are telling me...ooops) that there was a new law that I had to pay 25% tax.......she actually took my printed form from 3 months ago and hand-wrote my new net figure.....she smiled and said that it was legal.....new rules?
Is this real, or am I locked into a Russian, Argentinian, Cypriot nightmare where a pre-agreed contract can be tossed out of the window while a new government robs my bank account?.....serious question

ps.......I am the blonde-haired, elderly Caucasian guy sat outside Oxxo, offering to wash your car in return for a beer.....sad huh?


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## lat19n (Aug 19, 2017)

In 2019 Mexico increased the 'withholding tax' (ISR) on interest earning accounts. It about doubled. (I think the numbers you mention are erroneous). In the US workers are used to paying a similar thing in payroll withholding. So I suspect your bank paid you every penny of interest to which you were entitled, but they then took a piece of that and gave it to the Mexican Treasury. 

For me (and I might be fooling myself) it is no big deal because I file my taxes in the US and I am already paying them more tax than I like. I would rather pay Mexico my tax monies than the US and now it just means that I will submit a US tax return with a larger 'Foreign Tax Credit'. (Basically - this is what I earned, these are the taxes I owe you, BUT I already paid Mexico this much so I owe you (the US) less).


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## AlanMexicali (Jun 1, 2011)

https://www.google.com/amp/s/diario...tencion-de-isr-a-ahorradores-20190110-1463929

Google Translation:

"Bank accounts that pay interest to their holders are those that will be affected by the higher rate of provisional withholding of Income Tax (ISR) explained Alfredo Gómez Coss y León, public accountant.
The change established in the Federal Revenue Law 2019 indicates that the ISR rate on real returns of bank accounts went from 0.46 percent in 2018 to 1.04 percent in 2019.
This withholding will be applied by the Tax Administration Service (SAT).
The specialist mentioned that this measure affects investors and all those who have money in the financial system.
The key to understanding whether this increase affects or not is that the account pays some interest to the owner.
Those that have this characteristic are those of investment, detailed Alfredo Gómez.
"Anyone who has an account and pays interest will affect their assets," he reiterated.
The analyst explained that the field of investment products is broad, since some offer investments from one thousand pesos and one-day terms.
The change in the rate is equivalent to an increase of 126 percent.
Taxpayers from Adame and Elizondo Abogados indicated that the excessive retention will generate balances in favor, which will be difficult to recover in the annual declaration 2020.
Alfredo Gómez Coss said that it is probable that the balances in favor will be generated among those who manage their large capital accounts."


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## sbeech (Apr 3, 2014)

lat19n said:


> In 2019 Mexico increased the 'withholding tax' (ISR) on interest earning accounts. It about doubled. (I think the numbers you mention are erroneous). In the US workers are used to paying a similar thing in payroll withholding. So I suspect your bank paid you every penny of interest to which you were entitled, but they then took a piece of that and gave it to the Mexican Treasury.
> 
> For me (and I might be fooling myself) it is no big deal because I file my taxes in the US and I am already paying them more tax than I like. I would rather pay Mexico my tax monies than the US and now it just means that I will submit a US tax return with a larger 'Foreign Tax Credit'. (Basically - this is what I earned, these are the taxes I owe you, BUT I already paid Mexico this much so I owe you (the US) less).


Please could you explain why my numbers are "erroneous"?

If my Mexican bank account is paying 4.6% interest and the Mexican government withholds .46% then I am giving them 10%......correct?
I then go down to collect my interest and they have apparently decided (without my consent) to withhold 1.04% (an increase of 126%), then they were taking 10% of my interest but are now taking 22.6%.....I admit that 22.6% is not quite 25% but hardly enough for you to call it "erroneous".
Basically I was paying X to the Mexican government for looking after my money....now I am paying more than double......yippee


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## sbeech (Apr 3, 2014)

Thank you for the reply Alan, apparently I am not being robbed by the local Bancomer.....the government have decided to more than double the taxes on my deposit bank account.....not sure how to feel, it stings though paying out 22.6% of my savings interest....no wonder the peso is crashing versus the dollar and the GBP


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## TundraGreen (Jul 15, 2010)

sbeech said:


> Thank you for the reply Alan, apparently I am not being robbed by the local Bancomer.....the government have decided to more than double the taxes on my deposit bank account.....not sure how to feel, it stings though paying out 22.6% of my savings interest....no wonder the peso is crashing versus the dollar and the GBP


Is the peso crashing. It seems like it was 18 for a long time. It briefly went to 20 but now it is back to 19 and seems to be holding.


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## lat19n (Aug 19, 2017)

@sbeech - personally I find your style a little abrasive and I have already rendered you all the help I am going to. But considering your sizable investment banking experience I'm sure you are well-versed with real versus nominal interest and withholding in general. As you know you can certainly visit your local SAT office, request an RFC and file Mexican tax returns in an attempt to reclaim your perceived unjustly withheld taxes.

I feel that Mexico is giving me a lot and if I have to pay a few pesos in taxes off the nearly 9% interest I am earning on my investments I'm ok with that. Perhaps I would feel differently if I needed that money to buy beer, but I don't drink beer. And with some luck maybe the taxes I pay will help rebuild a school or something truly useful.

[Cut]


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## perropedorro (Mar 19, 2016)

TundraGreen said:


> Is the peso crashing. It seems like it was 18 for a long time. It briefly went to 20 but now it is back to 19 and seems to be holding.


I noticed that too. About 2 years ago the peso bottomed out after a 3 year slide during which it went from 13 to over 21 to the dollar. Election worries, insecurity, rumors that AMLO is a commie, and anticipation of the new administration's usual discovery of economic problems swept under the rug by his predecessor -- many economists were predicting 25+ to the dollar by 2019. Didn't happen, in fact the peso has recovered to 19. So folks with a bundle in pesos have done rather well over the last couple of years, far better than those of us getting a modest pension in dollars. But I'm still happy here, and not complaining-- _or else I'd go somewhere else_.


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## sbeech (Apr 3, 2014)

lat19n said:


> @sbeech - personally I find your style a little abrasive and I have already rendered you all the help I am going to. But considering your sizable investment banking experience I'm sure you are well-versed with real versus nominal interest and withholding in general. As you know you can certainly visit your local SAT office, request an RFC and file Mexican tax returns in an attempt to reclaim your perceived unjustly withheld taxes.
> 
> I feel that Mexico is giving me a lot and if I have to pay a few pesos in taxes off the nearly 9% interest I am earning on my investments I'm ok with that. Perhaps I would feel differently if I needed that money to buy beer, but I don't drink beer. And with some luck maybe the taxes I pay will help rebuild a school or something truly useful.
> 
> [Cut]


You are the one calling me "abrasive", yet you are the one casting aspersions on my numbers, odd.......so I repeat "where in the original post are my figures erroneous?

Here are the actual figures taken directly from my Bancomer "contract"

Interest accrued - 14,944.89
Tax withheld - 1,576.85 ie 10.55%

On arrival at the bank, my new, amended, hastily printed statement read
Interest accrued - 14,944.89
Tax withheld - 3,565.06 ie 23.85%

I admit, I was confused and a little in shock....the manageress started explaining that the 0.46 tax was now 1.04 (a figure that Alan kindly confirmed without being snotty!) and was a result of the new government rules(she made a joke a joke about AMLO but I was too busy picturing 2,000 pesos in missing beer cans!)

I came on here to get clarification, I got it......thank you

I honestly don't know how I'm being accused of being abrasive? 
Apparently I should be grateful that I'm helping build a new Mexican school somewhere and told to leave the country if I'm not happy at someone increasing my taxes by 126%, without my knowledge!....wow


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## AlanMexicali (Jun 1, 2011)

sbeech said:


> lat19n said:
> 
> 
> > @sbeech - personally I find your style a little abrasive and I have already rendered you all the help I am going to. But considering your sizable investment banking experience I'm sure you are well-versed with real versus nominal interest and withholding in general. As you know you can certainly visit your local SAT office, request an RFC and file Mexican tax returns in an attempt to reclaim your perceived unjustly withheld taxes.
> ...


AMLO's daily morning Youtube lectures [Tweets] directed at his base are more than obvious to me us [ AMLO/Morena Party ] - the poor and abused working class - against them - the sucessful [ the wealthy, business class, middle class, upper middle class ] and politicians who all steal and lie and he plans to strip them of their privilages and bring them to their knees by laws his Morena Party are working on now or soon in the next 6 years. Be prepared for more bad news soon.


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## sbeech (Apr 3, 2014)

perropedorro said:


> I noticed that too. About 2 years ago the peso bottomed out after a 3 year slide during which it went from 13 to over 21 to the dollar. Election worries, insecurity, rumors that AMLO is a commie, and anticipation of the new administration's usual discovery of economic problems swept under the rug by his predecessor -- many economists were predicting 25+ to the dollar by 2019. Didn't happen, in fact the peso has recovered to 19. So folks with a bundle in pesos have done rather well over the last couple of years, far better than those of us getting a modest pension in dollars. But I'm still happy here, and not complaining-- _or else I'd go somewhere else_.


I started moving assets over from the UK in 2013, at that time the rate was 18.6 pesos to the GBP and peaked at 27.7 in June last year......BREXIT uncertainty has meant a slide back to 24.7 but by my calculation I've still "lost" a huge chunk of money.

If I had sold a small house at 100,000 GBP to get here, I would have received 1.86 million pesos....inflation has now eaten into that cash sum (a 19litre bottle of water was 20 pesos a bottle at Oxxo in 2013, yesterday it was 34.5 pesos, similarly bread, petrol, potatoes.....nothing ever goes down in price)....BUT, let's assume by some miracle that I still have the 1.86 million pesos, it will only buy me back 75,300 GBP today, a loss of 25%....plus, if I wanted to re-buy the same house, it would almost certainly cost me 150,000 GBP ie I would now be in debt to the bank for 75,000, not a clever move huh?

Similarly with the USD, it was 12 pesos to the USD in April 2013, today it's 19......anyone trying to move back to the US has the same problem. Their peso stash buys them massively fewer dollars whilst any property or assets they sold have increased in price back in their original country.
Basically the "move" to Mexico is a one-way move UNLESS you are getting paid in dollars or GBP, but living here....that way the exchange rate works for you ie one of my private pensions is paid in GBP and I convert it on the internet and send it to Bancomer.

Not sure if I'm just waffling now, but in summary I love it here, I love the weather, the locals are great, despite high inflation things are still within my budget....I just wish they wouldn't double the bank taxes without telling me, though I haven't got any intention of throwing my toys out of the pram over 2,000 missing pesos......toodles.


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