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Tax Guide Mexico

Tax Guide Mexico

Personal Income Taxation in Mexico

For individuals that are resident in Mexico, the basis for calculating personal income tax tends to be their worldwide income. This is irrespective of their nationality status. On the other hand, non-residents, as well as citizens who have already paid tax in foreign countries are only supposed to be taxed on their Mexican-sourced income.

Personal Income Tax Rates in Mexico

  • For a taxable income between MXN (Mexican Peso) 0.01 and MXN (Mexican Peso) 7735: The flat tax rate is MXN 0. Furthermore, the tax on excess is 1.92%.
  • For a taxable income between MXN (Mexican Peso) 7735.01 and MXN (Mexican Peso) 65,651.07: The flat tax rate is MXN 148.51. Furthermore, the tax on excess is 6.40%.
  • For a taxable income between MXN (Mexican Peso) 65,651.08 and MXN (Mexican Peso) 115,375.90: The flat tax rate is MXN 3855.14. Furthermore, the tax on excess is 10.88%.
  • For a taxable income between MXN (Mexican Peso) 115,375.91 and MXN (Mexican Peso) 134,119.41: The flat tax rate is MXN 9265.20. Furthermore, the tax on excess is 16%.
  • For a taxable income between MXN (Mexican Peso) 134,119.42 and MXN (Mexican Peso) 160,577.66: The flat tax rate is MXN 12264.16. Furthermore, the tax on excess is 17.92%.
  • For a taxable income between MXN (Mexican Peso) 160,577.67 and MXN (Mexican Peso) 323,862.00: The flat tax rate is MXN 17,005.47. Furthermore, the tax on excess is 21.36%.
  • For a taxable income between MXN (Mexican Peso) 323,862.01 and MXN (Mexican Peso) 510,451.00: The flat tax rate is MXN 51,883.01. Furthermore, the tax on excess is 23.52%.
  • For a taxable income between MXN (Mexican Peso) 510,451.01 and MXN (Mexican Peso) 974,535.03: The flat tax rate is MXN 95,768.74. Furthermore, the tax on excess is 30%.
  • For a taxable income between MXN (Mexican Peso) 974,535.04 and MXN (Mexican Peso) 1,299,380.05: The flat tax rate is MXN 234,993.95. Furthermore, the tax on excess is 32%.
  • For a taxable income between MXN (Mexican Peso) 1,299,380.06 and MXN (Mexican Peso) 3,898,140.12: The flat tax rate is MXN 338,944.34. Furthermore, the tax on excess is 34%.
  • For a taxable income higher than MXN (Mexican Peso) 3,898,140.12: The flat tax rate is MXN 1,222,522.76. Furthermore, the tax on excess is 35%.

On the other hand, for income that is earned by non-residents in Mexico, the following tax rates are applicable:

  • For a taxable income between MXN (Mexican Peso) 0 and MXN (Mexican Peso) 125,900: PIT is exempt on this particular income slab.
  • For a taxable income between MXN (Mexican Peso) 125,900 and MXN (Mexican Peso) 1,000,000: PIT is levied at a rate of 15%.
  • For a taxable income higher than MXN (Mexican Peso) 1,000,000: PIT is levied at a rate of 30%.

Corporate Income Tax in Mexico

In order to calculate Corporate Income Tax, it is important to consider the residency status of the given taxpayer.

  • For Mexican resident corporate entities: Income from worldwide resources is accounted for.
  • For foreign entities residing in Mexico: Income derived from within Mexico is accounted for computing CIT.
  • For foreign entities residing in Mexico: Income derived from within Mexico is accounted for computing CIT.
  • Foreign resident companies with a Permanent Establishment in Mexico: Only income that is attributed to Permanent Establishment is used for computing PIT.

Corporate Income Tax Rate in Mexico

The federal rate of CIT applied across various entities is 30%.

This rate is applicable across all corporate entities, which includes associations of civil nature, as well as branches. However, for businesses that are involved in agriculture related business, there is a 30% reduction in tax liability that is offered.

Other than this, there are no Corporate Income Taxes that are applied on a local level in Mexico.

Other Taxation in Mexico

  • Value Added Tax: VAT is imposed as a consumption tax in Mexico at a rate of 16% on all goods and services. This is also levied on lease payments, as well as imported goods and services within Mexico. However, sale of live saving drugs, as well as medicines are zero-rated. Similarly, sale of books, magazines, as well as other educational related instruments are also considered zero-rated. In the same manner, sale of certain foodstuff is also regarded as zero-rated.
  • Custom Duties: General import duties that are levied in Mexico range from 0% to 35%. However, most imports fall within the range of 3% to 20%. However, different rates are applicable for certain food products, shoes, and textile related products.
  • Excise Taxes: In accordance to the Excise Tax Law, varying rates of excise duty are applied in Mexico on tobacco, alcohol, or food related services.
  • Property Taxes: Property Taxes are also applied varying on the underlying value of land.
  • Title Transfer Taxes: This tax is levied on the transfer of title ship of a given property. Under this premise, variable transfer tax is applied at average rates, varying from 2% to 5%.

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