Mexico Tax Rates
Mexico operates a progressive tax system administered by the Servicio de Administración Tributaria (SAT). The federal government levies personal income tax through 11 brackets ranging from 1.92% to 35%, along with a flat 30% corporate income tax and a 16% value-added tax. Mexico taxes its residents on worldwide income and non-residents only on Mexican-source income, with an extensive network of tax treaties to prevent double taxation.
Top Income Tax Rate
35%
Corporate Tax Rate
30%
VAT / Sales Tax
16%
Capital Gains Tax
35%
Detailed Tax Information
Income Tax Brackets
Mexico imposes a progressive federal income tax with 11 brackets ranging from 1.92% to 35%. Tax residents are taxed on worldwide income while non-residents are taxed only on Mexican-source income at varying withholding rates. Employment income is subject to withholding by employers, while self-employed individuals must file monthly provisional payments and an annual return. Personal deductions are limited and include medical expenses, mortgage interest, school tuition, and retirement savings contributions, subject to an overall cap of the lesser of 15% of gross income or approximately 5 times the annual UMA (Unit of Measurement).
| Income Range | Tax Rate |
|---|---|
| MX$0 – MX$9K | 1.9% |
| MX$9K – MX$76K | 6.4% |
| MX$76K – MX$134K | 10.9% |
| MX$134K – MX$155K | 16% |
| MX$155K – MX$186K | 17.9% |
| MX$186K – MX$375K | 21.4% |
| MX$375K – MX$591K | 23.5% |
| MX$591K – MX$1.1M | 30% |
| MX$1.1M – MX$1.5M | 32% |
| MX$1.5M – MX$4.5M | 34% |
| MX$4.5M+ | 35% |
Corporate Tax
Mexico imposes a flat 30% corporate income tax (ISR) on all resident companies on their worldwide income. Non-resident companies are taxed on Mexican-source income only. There is no reduced rate for small businesses, although certain simplified tax regimes exist for smaller taxpayers with lower gross income thresholds. Companies must make monthly provisional tax payments and file an annual return by March 31. Mexico also imposes a 10% withholding tax on profit distributions to shareholders. Transfer pricing rules follow OECD guidelines, and thin capitalization rules limit interest deductions on loans from related parties.
Standard Rate
30%
Capital Gains Tax
Capital gains in Mexico are generally treated as ordinary income and taxed at the individual's marginal rate, up to 35%. For residents, gains from the sale of shares listed on the Mexican stock exchange are subject to a 10% definitive tax on net gains. Real estate capital gains are taxed under a special regime allowing deductions for acquisition cost (adjusted for inflation), improvements, and transaction costs. Non-residents disposing of Mexican real estate or shares are subject to withholding taxes at rates of up to 25% of gross proceeds or 35% of net gains.
Short-Term Rate
35%
Long-Term Rate
35%
Rate
35%
VAT / Sales Tax
Mexico levies a 16% value-added tax (IVA) on most goods and services. Essential items such as basic food, medicines, and educational services are zero-rated. A reduced 8% IVA rate applies in the Northern Border Zone and the Southern Border Free Zone as a stimulus measure. Exports are zero-rated. Exempt activities include residential rental, medical services, education, and certain financial services. Businesses must charge IVA on taxable transactions and file monthly returns. The digital economy is also subject to IVA, with foreign digital service providers required to register and collect tax.
Standard Rate
16%
Cryptocurrency Tax
Mexico does not have specific cryptocurrency legislation, but the SAT treats crypto transactions under existing income tax rules. Gains from selling or exchanging cryptocurrency are subject to income tax at the individual's marginal rate (up to 35%) as they are considered a form of income from the alienation of goods. Businesses that accept crypto payments must recognize income at the fair market value at the time of the transaction. Mexico's Fintech Law regulates virtual assets at the institutional level but does not provide specific tax guidance. Taxpayers are required to report all crypto transactions in their annual tax returns.
Tax Treaties
Mexico has over 60 double taxation agreements in force, covering major trading partners worldwide. The Mexico-US tax treaty is particularly significant given the extensive economic relationship between the two countries. These treaties typically reduce withholding rates on dividends (often to 5-15%), interest (4.9-15%), and royalties (10%). Mexico is a member of the OECD and participates in the Inclusive Framework on BEPS. The country also exchanges information under the Common Reporting Standard (CRS) and has Tax Information Exchange Agreements with numerous jurisdictions.
Treaty Network
60
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Mexico
See how much you could save by moving here from your current country.
+$15K
Tax in United States
$24K
24.4% effective
Tax in Mexico
$10K
9.8% effective
You Save
59.6%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
