Country topic
Tax in Mexico
Under the Federal Tax Code you are a Mexican tax resident if you set up your home in Mexico. If you also have a home in another country, you are resident if your centre of vital interests is in Mexico, for example when more than 50% of your total income in the calendar year comes from Mexican sources or your main professional activities are there. Article 9 sets no day count. [T1] Resident individuals pay Mexican income tax on their worldwide income, whatever their nationality. Non-residents pay only on Mexican-source income. The Income Tax Law is the same on this point: residents are taxed on all income, wherever its source. [T2] [T3]
What we found
The research, with its sources.
Research information, not advice. Rules change, so check the source before you act on one.
- Under the Federal Tax Code you are a Mexican tax resident if you set up your home in Mexico. If you also have a home in another country, you are resident if your centre of vital interests is in Mexico, for example when more than 50% of your total income in the calendar year comes from Mexican sources or your main professional activities are there. Article 9 sets no day count. [T1]
- Resident individuals pay Mexican income tax on their worldwide income, whatever their nationality. Non-residents pay only on Mexican-source income. The Income Tax Law is the same on this point: residents are taxed on all income, wherever its source. [T2] [T3]
- PwC lists the resident tariff for calendar year 2026 with marginal rates rising from 1.92% on the first MXN 10,135 of taxable income to 6.40%, 10.88%, 16%, 17.92%, 21.36% and 23.52%, then 30% above MXN 668,840, 32% above MXN 1,276,926, 34% above MXN 1,702,568 and 35% above MXN 5,107,704. These are rates from a private adviser's summary, not your bill. [T3]
- Employees paid by someone who does not withhold Mexican tax, including income from abroad, work out their own monthly provisional payment and pay it by the 17th of each month; an annual return may also be due. The Income Tax Law copy we read was last reformed on 1 April 2024, so check the current rule. Freelancers have their own registration, invoicing and payment rules. [T2]
- The general value-added tax (IVA) rate is 16%. In PwC's summary, non-residents' employment income is taxed at 15% to 30% with the first MXN 125,900 in 12 months exempt, and non-residents' sales of shares through the Mexican stock exchange carry a flat 10% withholding on the profit. Exact treatment of your income is not assessed here. [T4] [T3]
- Mexico has income tax treaties with the four launch countries. The US convention (1992) settles dual residence by permanent home, then centre of vital interests, but its saving clause lets the US keep taxing its citizens, who file on worldwide income (2026 foreign earned income exclusion limit US$132,900; Mexican tax can usually be taken as a credit, but not on excluded income; foreign accounts together above US$10,000 need an FBAR). Canada's convention was signed in 2006. Mexico is not on the US list of social security agreements; Canada's CPP and OAS agreement has been in force since 1 May 1996. [T5] [T6] [T7] [T8] [T9] [T10] [T11] [T12]
- Australia's tax agreement with Mexico has applied since 31 December 2003: it looks first at a permanent home, then at closer personal and economic relations, and caps source-country tax at, for example, 15% on most dividends and 10% on royalties. New Zealand's has been in force since 16 June 2007 and generally limits withholding to 15% on dividends and 10% on interest and royalties. Neither country has a social security agreement with Mexico. [T13] [T14] [T15] [T16] [T17] [T18]
- Your home country's residence rules run separately. Canada looks at residential ties and treats emigrants as having sold certain property on the day they leave; Australia's tests include domicile and a permanent place of abode; New Zealand ends residence only after more than 325 days away with no permanent place of abode; a private adviser notes a US state may still treat you as a resident. Get a dated filing plan from an adviser who knows both systems. [T19] [T20] [T21] [T22] [T23] [T24]
The country
More on Mexico.
Topics
More about Mexico.
Questions about Tax in Mexico.
When am I a Mexican tax resident?
Under the Federal Tax Code you are resident if you set up your home in Mexico. If you also have a home abroad, you are resident if your centre of vital interests is in Mexico, for example more than 50% of your yearly income comes from Mexican sources or your main professional activity is there. No day count.
What are Mexico's income tax rates for residents?
PwC lists 2026 marginal rates for residents rising from 1.92% to 35%: 30% above MXN 668,840, 32% above MXN 1,276,926, 34% above MXN 1,702,568 and 35% above MXN 5,107,704. The general VAT rate is 16%. Residents are taxed on income from anywhere. Rates aren't your bill.
Does an employee paid from abroad pay Mexican tax each month?
If you are resident, the Income Tax Law has employees paid by people who don't withhold, including income from abroad, work out a provisional payment and pay it by the 17th of each month. The copy we read was last reformed in April 2024, so check the current rule. Freelancers have their own rules.
Does Mexico have a tax treaty with the US, Canada, Australia or New Zealand?
Yes, with all four. The US convention dates from 1992, Canada's was signed in 2006, Australia's has applied since 31 December 2003 and New Zealand's since 16 June 2007. The US keeps its claim on citizens. The Australian and New Zealand treaties cap source-country tax on dividends at 15%. Check how they apply to you.
Do I stop being a tax resident at home if I move?
Not automatically. Canada looks at residential ties, Australia at domicile and a permanent place of abode, and New Zealand at a 325-day absence with no permanent place of abode. The US taxes citizens on worldwide income wherever they live. Treaty tie-breakers and your own facts decide; get advice.
Sources
Where each figure comes from.
Every figure on this page links to the page we read, with the date we checked it.
- [T1] Federal Tax Code (Código Fiscal de la Federación), article 9 (archived copy of 21 September 2026), Chamber of Deputies of Mexico (Internet Archive copy). Checked 15 October 2026.
- [T2] Income Tax Law (Ley del Impuesto sobre la Renta), articles 1 and 96 (archived copy of 17 September 2026), Chamber of Deputies of Mexico (Internet Archive copy). Checked 15 October 2026.
- [T3] Mexico: taxes on personal income, PwC Worldwide Tax Summaries (private adviser, not official). Checked 15 October 2026.
- [T4] Value added tax (IVA), Servicio de Administración Tributaria (SAT). Checked 30 May 2026.
- [T5] US–Mexico income tax convention (1992), text, Internal Revenue Service. Checked 4 October 2026.
- [T6] US citizens abroad: filing requirements, Internal Revenue Service. Checked 4 October 2026.
- [T7] Foreign earned income exclusion limit, Internal Revenue Service. Checked 4 October 2026.
- [T8] Foreign tax credit, Internal Revenue Service. Checked 4 October 2026.
- [T9] Report of Foreign Bank and Financial Accounts (FBAR), Financial Crimes Enforcement Network (FinCEN). Checked 4 October 2026.
- [T10] US international Social Security agreements, US Social Security Administration. Checked 4 October 2026.
- [T11] Tax treaties in force, Department of Finance Canada. Checked 4 October 2026.
- [T12] Canada–Mexico social security agreement, Government of Canada. Checked 4 October 2026.
- [T13] Treaties in force, Australian Treasury. Checked 4 October 2026.
- [T14] Australia–Mexico tax agreement (2002), text, Embassy of Mexico in Australia (copy of the Australian Treaty Series text, [2004] ATS 4). Checked 4 October 2026.
- [T15] New Zealand–Mexico tax agreement, Inland Revenue (New Zealand), Tax Policy. Checked 4 October 2026.
- [T16] National interest analysis: New Zealand–Mexico double tax agreement, Inland Revenue (New Zealand), Tax Policy. Checked 4 October 2026.
- [T17] International social security agreements (archived copy of 9 September 2026), Australian Government, Department of Social Services (Internet Archive copy). Checked 4 October 2026.
- [T18] Social security agreements, Work and Income (Ministry of Social Development, New Zealand). Checked 4 October 2026.
- [T19] Leaving Canada (emigrants), Canada Revenue Agency. Checked 4 October 2026.
- [T20] Deemed disposition on departure, Canada Revenue Agency. Checked 4 October 2026.
- [T21] Australian residence tests, PwC Worldwide Tax Summaries (private adviser, not official). Checked 4 October 2026.
- [T22] Australian resident for tax purposes, Australian Taxation Office. Checked 4 October 2026.
- [T23] New Zealand tax residence, Inland Revenue (New Zealand). Checked 4 October 2026.
- [T24] State taxes after moving abroad, Expatriate Tax Returns (private adviser, not official). Checked 4 October 2026.