Mexico Tax Guide

Who Has to File

Annual declaration for 2025, filed in April 2026

Mexican tax residents generally file an annual declaration covering worldwide income. Employees with a single employer and salary below 400,000 pesos in the year are generally covered by employer withholding and may not need to file, though many still choose to in order to claim deductions and refunds.

Individuals with business or professional income, rental income, or income from more than one employer generally must file, and most business-type regimes also involve monthly provisional payments.

Residency Tests

A person is generally a Mexican tax resident when:

• Home in Mexico. They have established a home (casa habitacion) in Mexico. If they also keep a home in another country, residency turns on the center of vital interests.
• Center of vital interests. Mexico is treated as the center of vital interests when more than 50% of the year's income is Mexican-source, or when Mexico is the main base of professional activities.
• Mexican nationals. Mexican nationals are presumed tax resident unless they prove residence elsewhere, and special rules can extend residency when moving to a low-tax jurisdiction.

Unlike many countries, Mexico has no general 183-day test for individuals: the analysis is about homes and economic ties. That surprises many remote workers who assume day counting is all that matters.

Income Tax Rates (2025)

Resident individuals pay ISR on a progressive scale. Indicative annual brackets:

Brackets are adjusted for inflation periodically. Employment income is withheld monthly by the employer under a matching monthly tariff.

Investment income

Gains on listed Mexican shares sold on the stock exchange are generally taxed at a flat 10%. Dividends from Mexican companies carry an additional 10% withholding on top of corporate tax. Interest and other gains generally flow through the regular system with specific withholding rules.

Key 2026 Deadlines

RESICO, the Simplified Regime

Individuals with business, professional, or rental receipts up to 3.5 million pesos a year can generally opt into the Regimen Simplificado de Confianza (RESICO), paying ISR at flat rates from 1% to 2.5% of gross receipts, with minimal deductions.

RESICO excludes some situations (certain partners and shareholders, some foreign income patterns), and switching regimes has consequences, so the choice between RESICO and the general regime with deductions is a classic question for a Mexican accountant.

Non-Residents

Non-residents are taxed only on Mexican-source income, generally through final withholdings. For employment income paid for work performed in Mexico, the first roughly 125,900 pesos in a 12-month period are generally exempt, the next slice up to 1,000,000 pesos is taxed at 15%, and the excess at 30%.

Rental income from Mexican property and gains on Mexican real estate are generally taxable in Mexico regardless of where the owner lives, with specific withholding and notary mechanics on sales.

Foreign Income and Reporting

Residents owe Mexican tax on worldwide income, with a foreign tax credit for income tax paid abroad, capped at the Mexican tax on the same income. Income kept in preferential (low-tax) regimes abroad can fall under Mexico's REFIPRE anti-deferral rules, which carry their own annual informative return in February.

Mexico participates in CRS information exchange, and foreign banks routinely report accounts held by Mexican residents to the SAT.

Tax Treaties

Mexico has around 60 double tax treaties in force, including with the United States, Canada, Spain, France, Germany, and the United Kingdom. Treaties generally determine which country may tax employment income, pensions, dividends, and gains, and they include tie-breaker rules for dual residents.

Treaty tie-breakers

When a person qualifies as a tax resident of both Mexico and another country, the treaty tie-breaker typically checks: permanent home, center of vital interests, habitual abode, and nationality, in that order.

Leaving Mexico

When residency ends, notifying the SAT and being able to prove the new residence matters. Mexican nationals moving to a listed low-tax jurisdiction can remain treated as Mexican residents for an extended period under conditional rules, a point worth checking with a professional before a move.

Frequently Asked Questions

Does spending 183 days in Mexico make me a tax resident?

Not by itself. Mexican residency for individuals turns on having a home in Mexico and, when there are homes in two countries, on the center of vital interests: where most income comes from or where the main professional base is. Day counts matter for treaties and for other countries' tests, but Mexican law itself looks at homes and ties.

I work remotely from Mexico for a foreign employer. Is that taxed in Mexico?

If you are a Mexican tax resident, worldwide income including foreign salary is generally taxable in Mexico, with credits for foreign tax paid. If you are a non-resident working physically in Mexico, the work performed in Mexico can generate Mexican-source income once exemption thresholds are passed. The outcome depends on residency and treaties, a classic question for a professional.

What is RESICO and who can use it?

A simplified regime for individuals with business, professional, or rental receipts up to 3.5 million pesos a year, taxed at 1% to 2.5% of gross receipts instead of the progressive scale, with limited deductions and some exclusions.

When is the Mexican annual return due?

For individuals, the annual declaration for 2025 is generally due by April 30, 2026. Most business-type regimes also make monthly provisional payments by the 17th of each month.