Mexico tax system in 2026: every tax, rate and rule on one page

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You're thinking of living, freelancing or running a business from Mexico. Before you sign a lease, you want the whole tax picture on one page. This hub explains how the system works in 2026, the main taxes, what changed this year, and where to go deeper.

Mexico tax landscape in 2026: the key figures

What changed for 2026

• New Federal Tax Code rules from 1 January 2026. The decree published on 7 November 2025 says invoices must back real transactions, or they are treated as false. Digital platforms must give SAT real-time online access from 1 April 2026 (art. 30-B CFF).
• Excise tax (IEPS) widened from 1 January 2026. The IEPS reform raises the levy on drinks with added sugar to MXN 3.0818 per litre, adds MXN 1.50 per litre on drinks with sweeteners, and creates an 8% tax on violent video games. Platforms must withhold the IEPS on services they intermediate.
• Income tax and VAT laws were not amended. The LISR consolidated text shows its last reform on 1 April 2024. The VAT Law's last reform dates from 12 November 2021. The personal tariff thresholds rose for 2026 through Annex 8 of the 2026 Miscellaneous Tax Resolution: the 30% band now starts at MXN 668,840.15, up from MXN 590,796.00.

Is this guide for you?

Read on if you…

• are moving to Mexico, or already live there, and want the full picture;
• freelance, work remotely or run a company with a link to Mexico;
• are comparing Mexico with other Latin American bases.

Probably not your case if you…

• need a detailed calculation on one tax (use the in-depth guides linked below);
• only visit Mexico as a tourist, with no home, income or assets there.

How does the Mexican tax system work?

Residence decides almost everything

Mexico doesn't count days. Under art. 9 of the Federal Tax Code (CFF), you're resident once you set up a home in Mexico. A lasting lease or a place you own usually does it.

If you also keep a home abroad, Mexico looks at your centre of vital interests, meaning where your life and money sit. It's in Mexico if more than 50% of your total income is Mexican-source, or your main professional activity is there.

Mexican nationals are presumed resident. When two countries both claim you, a tax treaty tie-breaker decides. The full tests are in the guide on obtaining tax residency in Mexico.

Worldwide for residents, source-based for everyone else

Residents pay Mexican tax on worldwide income, whatever their nationality. Non-residents pay only on Mexican-source income, usually through withholding. There's no remittance basis and no territorial option for individuals.

Companies are resident where they're run

A company is Mexican resident if its principal administration or its place of effective management (sede de dirección efectiva) is in Mexico. That's art. 9(II) CFF. It matters a lot for founders, as you'll see below.

Everything runs on e-invoices

Every sale and every deductible cost needs a CFDI, an electronic invoice certified for SAT, the tax authority. You need an RFC (tax ID) and an e.firma (digital signature) to issue them and file returns. From 2026, an invoice that doesn't back a real operation is treated as false.

What are the main taxes in Mexico?

The resident tariff climbs fast. You hit 30% on income above MXN 668,840.15, and 35% above MXN 5,107,703.93. Those are the 2026 thresholds in the annual tariff published in the Official Gazette on 28 December 2025.

Gains on property, crypto and unlisted shares go into your normal income at progressive rates. Listed Mexican shares sit in the 10% bucket. See capital gains tax in Mexico and cryptocurrency taxes in Mexico. Excise, payroll and property taxes are covered in specific taxes in Mexico.

Good news: Mexico has no net wealth tax and no separate inheritance or gift tax. Inheritances received by residents are exempt from income tax. Gifts from a spouse, parents or children are exempt too. Other gifts are exempt up to three annual UMAs, MXN 128,383.92 with the 2026 UMA in force from 1 February. Gifts between siblings aren't exempt.

Is there a special regime for newcomers?

Not really. Mexico has no flat tax for new residents and no lump-sum expat regime. What you can actually use:

• RESICO for individuals. Under art. 113-E LISR, you pay 1% to 2.5% of income collected, with no deductions. It's open to residents with business, professional or rental income if last year's income stayed within MXN 3.5 million.
• Who's excluded from RESICO. Shareholders or partners of companies, related parties, non-residents with a permanent establishment, and income under preferential tax regimes.
• Personal deductions for medical costs, insurance, mortgage interest and retirement savings, within an overall cap. See personal tax deductions in Mexico.
• Tax treaties that remove double taxation on income you still earn abroad.

Here's the catch with RESICO. If your income passes MXN 3.5 million during the year, you move to the ordinary regime from the following month. From 2026, skipping three or more monthly payments in a calendar year lets SAT restrict your digital seal (art. 17-H Bis CFF).

The full picture, including visas, is in tax incentives for expats and digital nomads in Mexico.

What happens when you move in or out?

Moving in

1. Get your residence permit. Usually temporary residence, applied for at a Mexican consulate.
2. Sign a lease or buy a home. From then on, you're probably tax resident under art. 9 CFF.
3. Register with SAT. Get your RFC and e.firma.
4. Pick your regime. RESICO, ordinary business or professional activity, salary, or a mix.
5. Close the loop at home. Make sure your old country stops treating you as resident, or use the treaty tie-breaker.

Moving out

You must file a change-of-residence notice with SAT at the latest 15 days before you leave. Without it, your Mexican residence doesn't end.

Can't prove your new residence, or moving to a country where your income gets a preferential tax regime? Under art. 9 CFF, you stay Mexican resident for the notice year and the five following tax years. The exception is a country with a broad information exchange agreement plus mutual collection assistance. Details in ceasing your tax residency in Mexico.

How is running a business in Mexico taxed?

You can trade as an individual, under RESICO or the ordinary regime, or through a company. The S.A. de C.V., S. de R.L. de C.V. and the online S.A.S. are the usual choices. Compare them in legal forms of business in Mexico.

Companies pay 30% on taxable profit, under art. 9 LISR. Resident companies owned only by individuals, with prior-year income up to MXN 35 million, can use RESICO for companies (art. 206 LISR). They are taxed on a cash basis and, if yearly investments stay within MXN 3 million, get faster depreciation.

Expenses must be strictly necessary and backed by a CFDI. Above MXN 2,000, they must be paid electronically. Cars, meals and travel have specific caps. See business expenses in Mexico.

VAT at 16% applies to most sales. Exports of goods and services under art. 29 LIVA can be zero-rated, as art. 2-A of the VAT Law confirms. That lets exporters recover input VAT.

Here's the catch for founders. Run a foreign company from your flat in Mexico and SAT can argue its effective management is in Mexico. The company then becomes Mexican resident and owes 30% on its profits.

Compliance is strict, with monthly provisional payments usually due by the 17th. Fake invoices now carry heavier consequences. See tax fraud regulations of Mexico.

Common mistakes (and what they cost)

• Assuming no tax without 183 days. Mexico uses the home test → you can be resident from your first lasting lease, taxed on worldwide income up to 35%.
• Using invoices for operations that didn't happen. From 2026 they're treated as false → deduction lost and your invoicing can be suspended.
• Running a foreign company from Mexico. SAT places its effective management in Mexico → 30% Mexican corporate tax on its profits.
• Leaving without the SAT notice. Your residence doesn't end → worldwide income stays taxable in Mexico.
• Missing RESICO payments. Three or more missed monthly payments in a year → SAT can restrict your digital seal and you can't invoice.

Frequently asked questions

What are the main taxes in Mexico?

Residents pay income tax (ISR) at 1.92% to 35% on worldwide income. Companies pay 30% corporate tax, and dividends to individuals carry a 10% withholding. VAT is 16%, with 0% on exports and listed basics. There are also excise taxes, state payroll taxes and local property taxes. There's no federal wealth or estate tax.

How do you become a tax resident in Mexico?

You become resident when you set up a home in Mexico, such as a long lease or a property you own. If you also keep a home abroad, Mexico wins when your centre of vital interests is there. That's the case when over 50% of your income is Mexican-source. Domestic law has no 183-day rule.

Is Mexico a tax haven?

No. Mexico taxes residents on worldwide income at up to 35% and companies at 30%. Its e-invoicing system gives SAT a live view of most transactions. It can still be competitive for freelancers who qualify for RESICO at 1% to 2.5% of gross, and it has no wealth tax.

Do expats pay tax on foreign income in Mexico?

Yes, if they're Mexican tax residents. Residents are taxed on worldwide income, with relief for foreign tax under domestic rules and tax treaties. Non-residents pay only on Mexican-source income. So the real question is whether you have a home in Mexico, and where your vital interests sit.

What is the corporate tax rate in Mexico in 2026?

The corporate income tax rate is 30% of taxable profit, under art. 9 LISR. Dividends paid to individuals and foreign residents carry a further 10% withholding on profits generated after 2013. Resident companies owned only by individuals, with prior-year income up to MXN 35 million, can opt for RESICO's cash-basis rules.

When is the tax return due in Mexico?

Individuals file the annual return by 30 April of the following year, so by 30 April 2027 for tax year 2026. Companies file by 31 March. Businesses and self-employed people also make monthly provisional payments, generally due by the 17th of the following month, filed electronically.

Mexico tax guides

Every in-depth Mexico guide, in one place:

• Practical guide to obtaining your tax residency in Mexico – the home test, vital interests and your move plan.
• Practical guide to ceasing your tax residency in Mexico – the SAT notice, the five-year rule and non-resident tax.
• Tax incentives for expats and digital nomads in Mexico – what newcomers can really use.
• Personal tax deductions and benefits of Mexico – medical, school, mortgage and retirement deductions.
• Capital gains tax in Mexico – the 10% and progressive buckets.
• Cryptocurrency taxes in Mexico – sales, swaps, staking and crypto pay.
• Specific taxes in Mexico – VAT, IEPS, payroll and property taxes.
• Legal forms of business in Mexico – sole trader, S.A., S. de R.L. and S.A.S. compared.
• Business expenses in Mexico – what you can deduct, the caps and CFDI rules.
• Tax fraud regulations of Mexico – penalties, fake invoices and how to correct errors.

Related guides

• How to become a Mexican tax resident
• Capital gains tax in Mexico: 10% or up to 35%
• Legal forms of business in Mexico compared
• Business expenses in Mexico: rules and caps
• Tax landscape overview of Paraguay
• Tax landscape overview of Brazil
• All country tax guides

Sources

• Código Fiscal de la Federación (Federal Tax Code), consolidated text – Cámara de Diputados
• LISR reform of 12 November 2021, RESICO – Cámara de Diputados
• Ley del Impuesto al Valor Agregado (VAT Law) – Cámara de Diputados
• IEPS reform decree of 7 November 2025 – Cámara de Diputados
• Annexes 5 and 8 of the 2026 Miscellaneous Tax Resolution, 2026 tariff – Diario Oficial de la Federación
• UMA values for 2026 – INEGI
• Mexico – Taxes on personal income – PwC Worldwide Tax Summaries (secondary)
• Mexico – Other taxes – PwC Worldwide Tax Summaries (secondary)

This guide is general information, not personalised tax advice. See how we research and review.