In recent years, platforms like OnlyFans have become significant income sources for content creators in Mexico. However, with this financial growth comes the responsibility to comply with Mexican tax regulations. Understanding and fulfilling these obligations is crucial to avoid legal issues and ensure the sustainability of your digital endeavors.
Are You Required to Declare OnlyFans Income?
Yes, any income earned, regardless of its source, must be declared to the Servicio de Administración Tributaria (SAT), Mexico’s tax authority. This includes earnings from foreign digital platforms like OnlyFans. Failure to report these earnings can result in penalties, fines, and potential legal complications.
Which Tax Regime Should You Register Under?
As an OnlyFans content creator, you have several options for tax registration:
– Régimen de Actividades Empresariales y Profesionales (Business and Professional Activities Regime): Suitable for individuals offering services or products independently. This regime is broad and adaptable to various commercial or professional activities.
If your income comes from digital intermediaries such as platforms, applications, websites, these incomes will be under the Digital Platforms regime according to 113A LISR (another regime is NOT optional), if they do not come from digital platforms or media, then you could opt for the Business and Professional Activity or RESICO regime.
– Régimen de Plataformas Digitales (Digital Platforms Regime): Designed for individuals earning income through mobile applications or websites. This regime provides specific tax rules for those generating income via technological platforms.
– Régimen Simplificado de Confianza (RESICO) (Simplified Trust Regime): An attractive option for individuals with annual incomes below $3.5 million MXN. It offers lower tax rates and simplified declaration processes.
RESICO is often the most convenient for content creators, as tax rates can be as low as 1%, depending on your income.
Invoicing OnlyFans Income
Once registered, you must issue invoices for the income received through OnlyFans. Given that OnlyFans is a foreign platform, consider the following:
– Invoicing to the General Public: Since your subscribers make payments and are often anonymous or located outside Mexico, you can issue global invoices to the “Público en General.” These invoices summarize the income received over a specific period (e.g., weekly or monthly).
– Invoicing Individual Earnings: For more detailed control, you can issue an invoice for each income received. While more labor-intensive, this is a valid option.
– Type of Invoice: Select a CFDI of type “Ingreso,” the fiscal document that supports sales or income obtained.
Tax Declarations
As an OnlyFans content creator, you must file tax declarations according to your registered tax regime:
– Monthly Declarations: Include the calculation and payment of Income Tax (ISR) and, in some cases, Value Added Tax (IVA). Under RESICO, ISR can be as low as 1%, provided you meet the requirements.
– Annual Declaration: Every April, you must file an annual declaration summarizing all your income, deductions, and tax payments.
Do You Need to Pay IVA on OnlyFans Income?
If you do not register your RFC with digital platforms, you could face significant withholdings ranging from 20% to 36% for ISR, plus 16% for IVA. However, for those who do register their tax information, withholdings vary depending on the activity performed. For services like real estate, transportation, and sales of goods or services, ISR withholdings are 4.00%, 2.10%, and 1.00%, respectively.
Regarding IVA, a withholding tax of 8.00% is applied to all these activities. A withholding tax of 50% of the total VAT of 16% is applied to all these activities (8%).
Importance of Tracking Income and Expenses
Maintaining a clear record of income received from OnlyFans and expenses related to your activity (equipment, internet, software, etc.) is essential. These expenses can be deductible and help reduce the taxable base for calculating your taxes.
How Mextax Can Assist You
Navigating the complexities of tax obligations as a digital content creator can be challenging. Mextax offers tailored solutions to help you comply with your tax responsibilities efficiently. Their services include obtaining your RFC, managing accounting records, and ensuring timely tax declarations, allowing you to focus on creating content while staying compliant with Mexican tax laws.
By understanding and fulfilling your fiscal obligations, you can continue to thrive as a content creator on platforms like OnlyFans, ensuring your operations are both legal and profitable.
Contact Mextax today for a consultation and let our experts handle your taxes.
