Mexico Tax 2021
(Last partial update, September 2021)Mexico Tax Rates 2021
Individual Income Tax:
Mexico's individual income tax rate for 2021 is 1.92%-35%.Personal Tax Rates 2021
| Income (MXN) | % |
|---|---|
| 1-7,735 | 1.92 |
| 7,736-65,651 | 6.4 |
| 65,652-115,376 | 10.88 |
| 115,377-134,119 | 16 |
| 115,377-134,119 | 17.92 |
| 160,579-323,862 | 21.36 |
| 323,863-510,451 | 23.52 |
| 510,452-974,535 | 30 |
| 974,536-1,299,380 | 32 |
| 1,299,381-3,898,140 | 34 |
| Over 3,898,140 | 35 |
Non residents pay up to 30% on their salary income in Mexico.
Corporate Tax:
Mexico's corporate tax rate for 2021 is 30%.Companies in FIZ, free industrial zonesget reduction from income tax.
Dividends received by a resident company from another resident company are tax exempt.
Capital Gains:
Capital gains of companies are taxed at 30%.For individuals the standard capital gain tax rate is 10%.
Reports Filing
Companies have to file their annual reports by March of the following year.Individuals have to file the reports by April of the following year.
Residence
Mexican companies pay tax on their Mexican and worldwide income.Non -residents companies and individuals pay tax only on Mexican source income.
A foreign company is resident if the management is in Mexico
. An individual is resident if the center of living is in Mexico.
Mexico Tax Deductions
- Losses are carried forward for ten years. Fifteen years in case of oil extraction companies.
- There is no carryback for losses.
- Depreciation is deducted using the straight line depreciation.
- Intangible assets are depreciated according to the life length.
- Provisions for bad debts are allowed under certain terms.
- Donations are tax deductible up to 7% of the income.
- There is company consolidation for tax purpose, subject to terms.
- Interest paid on loans from a foreign related party is deductible only up to 3:1 debt to equity ratio.
Mexico Deduction of Tax at Source
In Mexico tax is deducted at source from the following payments to non-residents:Dividend- 10%.
Interest- 4.9%/35%/40%.
Royalties- 25%/35%/40%.
Technical Fees – 25%.
Note: The tax withholding rates are subject to double taxation treaties.
Mexico Social Security
The contributions by the employer and the employee to pensions are subject to ceiling defined by law.Emploers - Pay around 25% for social security.
Employees Pay around 5% for social security.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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