Tax system in Mexico
Mexico is a full tax jurisdiction, not a territorial or zero-tax one. Resident individuals are generally taxed on worldwide income, while nonresidents are taxed on Mexican-source income only.
Companies generally face 30% corporate income tax, monthly provisional payments and an annual filing deadline in March. Dividends, interest, royalties and cross-border payments can add withholding tax exposure.
Mexico has no separate net wealth tax or inheritance tax, but 16% VAT, 8% border VAT in designated areas, payroll costs, social security, local property taxes and notarial charges still matter.
Tax rates at a glance
- Income tax
- 1.92% - 35%Progressive
- Wealth tax
- 0%
- Inheritance tax
- 0%
- Capital gains tax
- Up to 35%
- Corporate tax
- 30%
- Dividend tax
- 10%
- VAT
- 16%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
ExpatsFoundersInvestorsHolding companiesCross-border businesses
Watch out for
- Mexico is sensitive to tax residence, source of income and withholding mechanics. A move in or out of Mexico can change worldwide tax exposure quickly.
- 2026 compliance work still centers on CFDI invoicing, SAT reporting, digital platform withholding and payroll/social security administration.
- The real cost of hiring is not just income tax. IMSS, INFONAVIT, state payroll tax and employer contributions can materially increase the payroll burden.
Frequently asked questions
Is Mexico a high-tax country?
Mexico is not a zero-tax jurisdiction. Resident individuals can reach a 35% top income tax rate, companies generally pay 30% corporate tax, and VAT is 16%, although Mexico does not have a separate net wealth tax or inheritance tax.
Does Mexico have a wealth tax?
No. Mexico does not levy a general annual net wealth tax on individuals.
What should founders check first in Mexico?
Founders should first model 30% corporate tax, dividend withholding, VAT, payroll and social security costs, permanent establishment risk and the monthly SAT compliance calendar.