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Mexico Tax Guide

North America
Last verified June 2026
Sources & verification

Figures on this page were last verified against the cited sources in June 2026. Always check official sources before making a relocation or incorporation decision.

PwC Worldwide Tax Summaries — MexicoSAT (Mexican Tax Authority)Forvis Mazars — Mexico 2026 tax reform initiative
Special Regime

Best 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 Tax Score
48/100
High Tax
Business Tax Score
55/100
Mixed

Personal Income Tax

Tax Residency

Day Threshold
183 days
Note
183 days in Mexico, or if center of vital interests (primary income source or principal residence) is in Mexico

Income Tax Rates

Top Marginal Rate
35%
Structure
Progressive 1.92-35% across 11 brackets

Foreign Income Treatment

System
Worldwide
Details
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).

Investment Income

Capital Gains
35%
Dividends
10%
Interest
0-35%%

Capital gains generally taxed as regular income at progressive rates up to 35%. Securities traded on Mexican stock exchange: 10% flat.

Wealth & Inheritance

Wealth Tax
No - No wealth tax
Inheritance Tax
No - No inheritance tax. Gifts above annual exemption taxed as income.

Special Regimes

RESICO (Simplified Tax Regime)
Simplified regime for individuals with annual revenue up to MXN 3.5M (~$195,000). Effective tax rates of 1-2.5% on gross revenue. Must issue invoices (CFDI) for all income. Available for self-employed individuals and small business owners.

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 Income Tax

Headline Rate
30%
Effective Rate Note
30% corporate income tax. 10% additional tax on profit distributions.
Free Zone / Incentives
IMMEX (maquiladora) program for manufacturers; some incentives in special economic zones

Withholding Taxes

Dividends
10%
Interest
4.9-35%%
Royalties
25-35%%

VAT / GST

Rate
16%
Note
16% standard VAT nationwide (0% on food, medicine, and border region rate discontinued)

Compliance & Substance

Substance Requirements
Moderate - transfer pricing rules apply
Compliance Friction
High - mandatory electronic invoicing (CFDI), monthly VAT returns, complex reporting

Notable Regimes

  • RESICO simplified regime
  • IMMEX maquiladora program
  • Northern border zone incentives

OECD Pillar Two (15% global minimum tax)

No implementation

No Pillar Two legislation enacted. The 2026 tax reform initiative did not include GloBE rules.

See full implementation tracker

Tax Treaty Network

US treatyYes
UK treatyYes
US totalizationNo
Total treaties~60

US-Mexico treaty critical for cross-border US-citizen planning. No US totalization, despite the size of the bilateral migration corridor.

See full treaty matrix

Data Sources

PwC Worldwide Tax Summaries — MexicoSAT (Mexican Tax Authority)Forvis Mazars — Mexico 2026 tax reform initiative

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.
Read the full US-citizen moving-abroad guide

Need someone to actually plan Mexico for you?

TaxAtlas covers the rates and rules. For the personal side — exit planning, residency strategy, business structure, or filings — request a response and we'll point you to relevant research or a specialist who handles Mexico cases.

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