Mexico Value Added Tax (VAT)

The VAT in Mexico on Border Zones will be increasing from 11% to 16% effective Jan 1, 2014.

I purchased a timeshare back in July of 2013. The VAT of 11% was charged at the time of purchase.

The resort is now trying to increase my monthly membership fees by the 5%.

Can they do this? I believe the VAT is charged at the time of purchase and has nothing to do with the timing or billing of payments and they are just trying to take advantage of its members and trying to pass along the additional tax.

troyj34 wrote:

The VAT in Mexico on Border Zones will be increasing from 11% to 16% effective Jan 1, 2014.

I purchased a timeshare back in July of 2013. The VAT of 11% was charged at the time of purchase.

The resort is now trying to increase my monthly membership fees by the 5%.

Can they do this? I believe the VAT is charged at the time of purchase and has nothing to do with the timing or billing of payments and they are just trying to take advantage of its members and trying to pass along the additional tax.

What does your contract state regarding this fee?

The purchase and sale agreement makes no mention of the VAT. Everything I have read says it is charged at the time of purchase, not when payments are made. I would assume they record the sale as income when I purchased (2013) and should have remitted the 11% tax income at that time

"Effective January 1, 2014, Members/Owners and exchange guests will be charged daily, at time of stay, the State of Quintana Roo hospitality tax of $2.12 for a one-bedroom studio, $3.59 for a one-bedroom premium and $5.71 for a two-bedroom lockoff.

The 2014 maintenance fee for a 2 bedroom at this resort is $1332; 2% of that would be $26.64/week or $3.81/day."

I understand them charging the additional tax on maintenance fees and to guests at time of stay...but to charge me on my monthly loan payment when it was purchased prior to the new law doesn't seem to make sense to me.

troyj34 wrote:

I understand them charging the additional tax on maintenance fees and to guests at time of stay...but to charge me on my monthly loan payment when it was purchased prior to the new law doesn't seem to make sense to me.

You might contact PROFECO ..... the consumer advocacy agency in Mexico with your concern ..... you can search for contact info.

Please tell me if a Timeshare Co. can legally charge a 19% VIT each year on my maintenance fee when I keep reading that the tax is 16%. Please let me know ASAP. Thank you so much!