Mexico main taxes

Understand Mexico main taxes

Mexico’s Tax System Made Simple

If you’re expanding your business to Mexico, understanding Mexican main taxes is crucial. Whether you’re a foreign entrepreneur, investor, or company, knowing the key taxes in Mexico can help you stay compliant and avoid penalties.

At Impuestum, we make taxation easy and stress-free. Here’s a simple breakdown of the main taxes in Mexico and how they may affect your business.

1. Income Tax (ISR – Impuesto Sobre la Renta)

This is the tax on profits (net income).

• For businesses: A flat 30% corporate tax rate applies.
• For individuals: Progressive rates from 1.92% to 35%, depending on income.
• Companies must file monthly tax returns and an annual declaration.

💡 Example: If your company earns $1,000,000 MXN in profit, you’ll pay $300,000 MXN in income tax.

---

2. Value Added Tax (IVA – Impuesto al Valor Agregado)

A 16% VAT applies to most sales of goods and services.

• Some essential products, like basic food and medicines, have a 0% rate.
• Businesses collect IVA from customers and pay it to the tax authority (SAT) monthly.

💡 Example: If you sell a product for $1,000 MXN, you must add $160 MXN IVA, making the final price $1,160 MXN.

---

3. Payroll Tax (ISN – Impuesto Sobre Nómina)

Employers must pay a state payroll tax on employee salaries.

• The rate varies between 2% and 3%, depending on the state.
• This tax is paid monthly.

💡 Example: If you pay $100,000 MXN in salaries, the payroll tax could be around $2,500 MXN.

---

4. Special Tax on Production and Services (IEPS – Impuesto Especial sobre Producción y Servicios)

This applies to specific goods like:

• Alcoholic beverages
• Tobacco products
• Sugary drinks
• Gasoline and diesel

Rates vary by product, and businesses must include IEPS in the final price.

---

5. Import Tax (Impuesto de Importación)

If you import products into Mexico, an import tax may apply.

• The tax rate depends on the product and Mexico’s free trade agreements (e.g., USMCA for U.S. and Canadian businesses).
• Some goods qualify for 0% import tax if imported from partner countries.

💡 Example: Importing electronics may result in a 15% to 20% tax.

---

Why Work with a Tax Expert in Mexico?

• Avoid costly fines – Ensure full compliance with Mexico’s tax laws.
• Save time – We handle tax filings and reporting so you can focus on growing your business.
• Get expert guidance – Our team helps you optimize taxes and reduce liabilities.

At Impuestum, we help foreign businesses navigate Mexico’s tax system. Whether you need company registration, tax compliance, or accounting services, we’ve got you covered.

📅 Book a Free Call today and let’s make your business in Mexico a success!

Do you need help with your taxes in Mexico? Don’t worry! Our network of accounting firms is ready to assist you.

Schedule a free 30-minute consultation to get all your questions answered. Don’t miss this opportunity to receive expert support. Contact us today and book your free session!

---