Navigating the Value-Added Tax

We've now been in Mexico City a week and still working on working through check-in procedures. This included submitting paperwork for diplomatic accreditation and a housing walk-through today.

One of the privileges of diplomatic status or "perks," if you will, is being able to recover some of the value-added tax paid each month. In Mexico, the value-added tax is applied to most services and products, but some things, like food and medicine, are currently exempted. Because the tax, called "IVA" (and pronounced a lot like the name Eva), is currently levied at a rate of 16%, this can add up to a lot of money. Of course, there are some restrictions, like you have to spend more than $50 on certain categories of purchases in order to be able to recover any of the tax for those purchases, but for some things, like gasoline and tolls, there is no minimum expense.

Part of the check-in process included an explanation on how to submit for IVA reimbursement. There is a good bit of paperwork that is involved; nevertheless, it sounds like the work will be worth it.

In order for a purchase's IVA to be reimbursable, the purchaser must obtain a factura for the purchase. Some people translate factura as "invoice," but I don't think the word translates well, so I'll just call them facturas. Although it is a fairly common practice for businesses to provide facturas as they are required by the Mexican government for routine tax deductions, like for businesses, this is not the standard receipt (comprobante or recibo) that you receive as a matter of course. You typically have to specifically request a factura. Interestingly, sometimes facturas are printed on the same "register tape" kind of paper that common receipts are, but sometimes they are much more official looking. Thankfully, the process of receiving a factura is not nearly as onerous as it was in years past thanks to advances in technology. No more waiting in line in most instances. Larger businesses, especially chains, allow you to facturar (issue a factura or comprobante fiscal digital) via their websites. In order to create the factura, you just need to input some values from your paper receipt and add a specific Mexican tax code registered to the embassy. And then, voila, factura!

Let the record keeping begin!

Setting Up Communications

We arrived in Mexico City on Wednesday as planned. Although it is impacting some friends and former colleagues back home, the government shutdown did not affect us -- good thing since there would be nothing worse than sitting at home without personal belongings or a car. As the situation wears on, it will assuredly have more and more of an impact. But, enough of that, back to Mexico...

The Apartment

The apartment is fairly spacious. It has a large room that the furniture arrangement divides into a dining room and living room, a large kitchen, two bathrooms, and two bedrooms. It even has a few ceiling fans and there is an underground parking space assigned to the apartment.

Electricity, water, and gas were already turned on when we arrived. The phone line has not been reconnected, but hopefully we'll get that taken care of shortly. As per standard, we are on our own to acquire television and Internet service if we want it and want it we do. Actually, as I write this entry on Saturday morning, the Totalplay technician is here working to get our service up and running. It's already involved a few trips up to the roof of the apartment complex.

There are various Internet/television services that you can get here in Mexico City. Some companies offer packages that include telephone (VoIP), television, and Internet service while some only offer one or two of the services. Some of the popular services are Telmex, Cablevision, Totalplay, and Sky; availability varies throughout the city. Totalplay is one of those companies like Comcast or Verizon Fios that offers all three. Like Verizon Fios, which is what we have back home, Totalplay provides service via fiber optic cables. I'm sure I'll comment on the service in the future and, of course, feel free to ask, but one thing I liked about this was that the advertising and services felt familiar. Some others have also reported good things about it, so hopefully it will work out well.

Mobile Communications

Like with television and Internet, there are also several cellular service options in Mexico City. The company with the greatest market share is TelCel. Another popular option is MoviStar, and yet a third option is iUSACell, which I know very little about. After looking at the TelCel and MoviStar websites, it looks like MoviStar is significantly cheaper than TelCel for prepaid plans. Ideally, we would be able to put a Mexican SIM card in our unlocked U.S. phones, put money on the account, and use away! Unfortunately, things haven't worked out that smoothly so far.

Thursday evening we went to the large MoviStar store on Presidente Masaryk, one of the larger, ritzier streets in Polanco. We informed the associate who greeted us that we wanted to purchase a SIM card for our phone. They issued us a number and we waited all of about 20 seconds before an associate was available to help us. We explained to her what we wanted to do. She said that the "chip" (micro SIM card) itself would be 80 pesos and gave us a prepaid plan brochure. For 200 pesos, we could get 500 minutes and 250 MB of data for general navigation that we would have 30 days to use or lose. Beyond the 250 MB of general data, data for some apps, like Facebook, would be unlimited. Beyond this, we could purchase additional minutes or data. To put this price in context, this is about $17 for 30 days of service or about a fourth of what I pay at home. At home, however, I get unlimited data, of which I use at most 1 GB since most of the time I am at a place that has Wifi.

Back to Thursday evening... The associate suggested that we try the SIM card in the phone before paying anything. They put the card in the phone. It readily received a phone signal but we were unable to get the data to work. We're looking into what the issue might have been, but we're also going to try TelCel.
Out of curiosity, we looked at the cost of the Samsung S4 and S3 phones under a prepaid service arrangement (i.e., not under a plan that would subsidize the cost of the phone somewhat). The S4 was 12,000+ pesos, which is about $1,000. The S3 was 3,000-some pesos ($300+), much more reasonable, but still a lot of money to spend for a new phone when you have a perfectly good phone already.

Internet Installation

It took nearly 6 hours, but Internet service and telephone service are up and running. Television service was a bit trickier. The technician swore it was not working due to a service outage, but after looking on the company's website, we found a guide that allowed us to correct program the remote for the TV signal decoder. Voila! All three services are working.

Getting There from Here

Today is filled with last-minute tidying, packing, figuring out some odds and ends, and catching up on what the government shutdown means in terms of work.

One of the odds and ends I am working to figure out is planning commuting options. I am assigned to housing in Polanco, which is about 3 miles from the embassy itself. Among the options I am considering are walking, biking, busing, and driving (which isn't an option for at least the first few weeks since my car will be in transit). For the first month after arrival, taking a shuttle is also an option. Commuting by subway might be an option, but the closest station to home is a 5-10-minute walk, followed by a train in the wrong direction, a transfer, a few stations more, and another 5-10-minute walk.

Walking - Google Maps tells me that it should take about 50 minutes to walk. This seems viable during peak weather conditions only.

Biking - I'm not sure what to expect in terms of time. It'll be faster than walking but slower than driving (except for those really bad days when traffic doesn't move). I know there are some, but few, bike lanes in Mexico City, but I will have to check on what is valid in terms of riding on sidewalks versus riding on roads. Even so, sidewalks in Mexico City are very uneven, so I'm not sure that riding on the sidewalks, if permitted, would even be a reasonable option. Safety is also a concern.

Busing - Cars are expensive, so relatively few people own them. Accordingly, many people commute by bus or subway. The buses typically have their origins, destinations, and popular waypoints painted onto their windshields. It's always been a hard system to navigate and others have reported that the routes aren't posted anywhere. In doing my own research, I came across ViaDF, a website that lets you put in an origin (street and cross street) and destination (street and cross street). Only time will tell whether the information pans out.

Below is a sample of a return commute by bus. It provides four options, each of which is about 30 minutes in duration. The cost for the one shown is 4 pesos ($.30). This would be about an hour commute per day (30 minutes each way) at a cost of $.60, depending on conversation rates.

Driving - This is easy the costliest of the choices but, in general, like the fastest. Because of congestion and environmental issues, Mexico City limits what days of the week you can drive. The good news is that you can be exempted from the restrictions if your car passes emissions testing; however, this is, of course, an added cost. Another detracting factor is that driving in the confines of comfort, away from everyone else, robs you a bit of the culture and robs you a bit of exploring your surroundings. Still, if I got home quicker, that would be more time to walk and get to know my neighborhood.

All in all, I'll be mixing modes of transportation depending on the weather, what's on my plate for the day, and mood.

And on the note of commuting, tomorrow is the biggest commute of them all. Tomorrow, we arrive!