23.60° N · 102.50° W
Mexico Tax Guide
North AmericaLast verified June 2026Worldwide system
- Top income tax
- 35%
- Capital gains
- 35%
- Corporate
- 30%
- VAT / GST
- 16%
- Residency test
- 183 days
Progressive 1.92-35% across 11 brackets
In short
- Mexico City offers great food, culture and a large expat community at moderate cost, in a US-friendly time zone.
- No newcomer tax regime: the standard rates above apply to new residents.
- Watch out: Safety varies sharply by neighbourhood and state, and income-based residency thresholds have risen steeply since 2025.
Verified June 2026 · 3 sources
Recent changes
No changes logged since the last full verification.
Full change logBest for
- Special regime available
RESICO (Simplified Tax Regime) — Simplified regime for individuals with annual revenue up to MXN 3.5M (~$195,000). Effective tax rate…
Personal Income Tax
Residency, rates, foreign income, capital gains, wealth and inheritance, special regimes+
Personal Income Tax
Residency, rates, foreign income, capital gains, wealth and inheritance, special regimesTax Residency
Income Tax Rates
Foreign Income Treatment
Investment Income
Capital gains generally taxed as regular income at progressive rates up to 35%. Securities traded on Mexican stock exchange: 10% flat.
Wealth & Inheritance
Special Regimes
Practical Notes
Popular with US expats due to proximity and low cost of living. RESICO regime offers extremely low rates for qualifying small taxpayers. Mexico's SAT is modernizing rapidly — mandatory electronic invoicing (CFDI) for everything. Don't assume foreign income goes unnoticed. US-Mexico tax treaty prevents double taxation.
Business & Corporate Tax
Corporate rate, withholding, VAT, substance, Pillar Two and treaties+
Business & Corporate Tax
Corporate rate, withholding, VAT, substance, Pillar Two and treatiesCorporate Income Tax
Withholding Taxes
VAT / GST
Compliance & Substance
Notable Regimes
- RESICO simplified regime
- IMMEX maquiladora program
- Northern border zone incentives
OECD Pillar Two (15% global minimum tax)
No Pillar Two legislation enacted. The 2026 tax reform initiative did not include GloBE rules.
See full implementation trackerTax Treaty Network
US-Mexico treaty critical for cross-border US-citizen planning. No US totalization, despite the size of the bilateral migration corridor.
See full treaty matrixBeyond tax
Living in Mexico
Mexico City offers great food, culture and a large expat community at moderate cost, in a US-friendly time zone.
- Expat hub
- Mexico City
- Monthly budget
- ~$2,200
- Climate
- Temperate, 17°C
- Time zone
- UTC-6
- Tax48
- Cost of living$$
- Safety42
- Healthcare70
- English45
- Internet95 Mbps
- Warm climate60
- Residency access70
- Scores 0-100, higher is better. Editorial composite ratings; see method.
Ways to get residency
- Temporary residence (economic solvency)About US$4,300/month income or about US$74,000 in savings (UMA-based, varies by consulate)
- Permanent residence (retiree)Pension income above the higher permanent-residence threshold (varies by consulate)
Watch out: Safety varies sharply by neighbourhood and state, and income-based residency thresholds have risen steeply since 2025.
See how Mexico ranks for remote workers, retirees and familiesData Sources
Last verified: June 2026. Always check official sources before making a decision.
FAQ
What is the personal income tax rate in Mexico?
+
Mexico has a top personal income tax rate of 35%. The tax structure is: Progressive 1.92-35% across 11 brackets. See the detailed breakdown above and verify with official sources.
Do I need to pay tax on foreign income in Mexico?
+
Mexico uses a worldwide system for foreign income. Mexican tax residents are taxed on worldwide income. Non-residents taxed only on Mexican-source income at 25% flat on gross (or progressive rates on net if they elect).
What are the residency requirements for Mexico?
+
Tax residency in Mexico generally requires 183 days of physical presence. 183 days in Mexico, or if center of vital interests (primary income source or principal residence) is in Mexico. Always verify current rules with official sources.
Is there a wealth tax in Mexico?
+
No, Mexico does not have a wealth tax. No wealth tax
What is the corporate tax rate in Mexico?
+
The corporate tax rate in Mexico is 30%. 30% corporate income tax. 10% additional tax on profit distributions.
US citizen moving to Mexico? Read this first.
Mexico's top personal rate of 35% means the Foreign Tax Credit (FTC) usually wins over FEIE for US citizens.
- •FTC (Form 1116) credits Mexico tax against US tax dollar-for-dollar. Because Mexico tax exceeds US tax on the same income, you typically owe zero US tax and accumulate carryforward credits (10-year carry).
- •Self-employment tax is owed in full to the US — no totalization agreement with Mexico.
- •For earned income near the FEIE cap (~$130k), FEIE is sometimes simpler administratively. Above the cap, FTC strategy almost always wins given Mexico's rates.
- •Mexico residency days threshold: 183. Treaty tie-breaker rules (where applicable) help with double-tax avoidance.
The Atlas · membership by intake
Is Mexico right for you? Get a plan built around you.
Answer 12 quick questions and the Atlas builds your personal dossier: whether Mexico actually fits you, where your company should sit, the regimes you could qualify for and the traps for your situation.
Want Mexico rate alerts?
Get the 2026 cheat sheet (all jurisdictions, one page) plus an email when Mexico changes its tax rates or residency rules.
No spam. One email when rates materially change. Unsubscribe in one click.
Related on TaxAtlas
- Is this the right country for you?4-question quiz scores 53 countries against your situation
- 2026 Global Tax Cheat SheetSide-by-side comparison of all 53 jurisdictions
- 2026 international tax changesRecent updates affecting jurisdictions like this one
- Get help with a Mexico moveRequest a response within 1–2 business days