Annual tax return: How much should I pay if I have investments?

April 14, 2021 4 min read

This story originally appeared on Alto Nivel

The Tax Administration Service (SAT) announced that the deadline for submitting the annual return corresponding to 2020 extends until May 31, 2021, so you still have time to prepare it.

The tax return must present all the income that was obtained and are subject to paying a lien, these include the investments you have.

But how much must be paid in taxes ? Are they already being held? What if the returns I had are fixed or variable income? If you have financial investments or plan to invest, this is what you should know about the annual return.

Who Must File Investment Statement?

Generally, those who obtain returns on investments are individuals, and they must file their return if last year they obtained income from the interests (returns) they have obtained on financial instruments.

Those who have obtained real interest income over 100,000.00 pesos and withholding has been applied on said income, in accordance with Article 150 of the Income Tax Law.

^{The tax return must present all the income that was obtained and are subject to paying a tax, these include the investments you have / Image: Depositphotos.com}

How much must be paid in taxes?

It may vary depending on the type of investment. The Income Tax Law indicates that the withholding will be made at the rate of 20% on nominal interests (or returns).

For example, if you have investments in government debt instruments, such as CETES , the corresponding income tax is retained by the entity or institution itself.

In this market there are government debt instruments such as CETES, Bondes, Udibonos and BPAS. Each one with its own peculiarities.

If you have investments in the foreign exchange market, also known as Forex, the interests that imply exchange gains are classified as accumulative interest subject to tax.

In a statement, the venture capital fund Wortev indicates that there is an option under the law. As an investor, you can choose to take the initial balance of the investment at the beginning of the fiscal year together with the reinvested interests and the factor calculated by the SAT.

What if I have an investment portfolio?

The most advanced investors can have their portfolio diversified in fixed and variable income instruments. For the most part, the returns obtained from investments will pay the corresponding tax according to the values that compose it, such as a mixture of shares, debt, currencies, and so on.

And how much is paid for a dividend?

The gains obtained by the sale of shares of companies that are listed on the Mexican Stock Exchange do not pay taxes. However, dividend income is taxable.

Dividends are income from profits distributed by companies to their shareholders. These income are taxable for both legal entities (companies) and individuals.

In this case, calculating how much tax will be paid may be more complex. The maximum rate at which they can be taxed is 42%, including the tax levied on both the individual and the legal person.

It should be remembered that this tax is aimed at large investors who have additional income derived from other activities.