How vat / sales tax works in Mexico
Mexican VAT (IVA) defaults to 16% on goods, services, leases, and imports, with taxpayers charging output tax, crediting input tax, and filing monthly returns with SAT.
A 0% rate covers unprocessed food, medicines, books, and exports with credit recovery, while medical, education, and financial services are largely exempt without it, and border zones can access 8% under the stimulus decree.
CFDI 4.0 invoicing, monthly payments by the 17th, an annual informative return, and digital-platform withholding and collection rules complete the compliance stack.
Tax rates at a glance
- Standard VAT
- 16%
- Border rate
- 8%
- Zero-rated supplies
- 0%
- Exempt supplies
- Exempt
- Digital platforms
- Withholding
- Imports
- 16%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
E-commerce sellersManufacturersFreelancersExpatsCross-border traders
Watch out for
- The 8% border rate is a conditional stimulus benefit, not a geographic default: registration, location, and compliance conditions decide each taxpayer, not the map pin alone.
- Zero-rated versus exempt repeats the classic split: 0% food and exports preserve credits while exempt medical and financial supplies block them.
- CFDI 4.0 errors invalidate credits, so receptor details, payment method codes, and cancellation deadlines need controls before filing, not after.
- Digital-platform intermediation, foreign digital services, and import pedimentos each carry collection or withholding mechanics that differ from domestic sales.
Frequently asked questions
What is the VAT rate in Mexico?
Mexico applies 16% general VAT in 2026, with 8% available in border zones under stimulus conditions, 0% for defined basics and exports, and exemptions for medical, education, and finance.
How often are Mexican VAT returns filed?
Monthly, with payment generally by the 17th of the following month, plus an annual informative return. CFDI 4.0 invoicing supports every credit claimed.
Do digital platforms collect VAT in Mexico?
Yes. Intermediation platforms face withholding and collection duties on Mexican transactions, and foreign digital-service providers follow dedicated registration and remittance tracks.