Union Misleads Workers on Tip Taxes in Mexico

Cancún, Quintana Roo – For the unfortunate working class dedicated to tourism, tips are indeed subject to taxation as part of salary, which contradicts the statement that Isaías González Cuevas, national leader of the Revolutionary Confederation of Workers and Peasants (CROC), disseminated this Wednesday among unionized workers in Quintana Roo.

In his effort to confuse public opinion and present it as an achievement by spreading a supposed opinion from the Mexican Social Security Institute (IMSS) that tips do not generate taxes, González Cuevas, who controls the millions of pesos in tips generated in the state, issued such information.

This is despite the fact that the IMSS is not a collection agency for federal taxes, only for social security fees and various charges, as established in its general law.

According to reviews conducted by Sol Quintana Roo on tax matters, valid throughout the national territory, the Tax Administration Service (SAT), a decentralized public agency of the federal public administration and the collection arm of the Government of Mexico, tips are indeed taxable, meaning subject to tax collection that workers in tourism sector establishments must pay, according to Criterion 35/ISR/N.

This is supported by the Federal Labor Law, in accordance with what is established in Article 346 and Article 96 of the Income Tax Law.

Furthermore, according to various jurisprudential-type criteria issued by the Collegiate Circuit Courts, the highest judicial bodies that can resolve this type of controversy, including those arising from the IMSS or the chambers of the Federal Court of Administrative Justice, which Isaías González Cuevas cited in the statement he issued.

Despite the union leader disguising this as a statement in favor of the working class, this has an underlying motive, which is the control of these millions of pesos entered as tips controlled by the CROC, economic fees that are used against the worker in case of refusal to labor or union subordination.