Mexico
Top Income Tax
35%
Marginal rate
Corporate Tax
30%
Standard rate
VAT / Sales Tax
16%
Standard rate
Capital Gains
10%
Standard rate
Overview
Mexico offers a low cost of living with proximity to the US market. The RESICO regime provides very low tax rates for small businesses and freelancers. Mexico City, Playa del Carmen, and Merida are popular digital nomad destinations with growing coworking scenes.
Income Tax Brackets
| Income Range (MXN) | Tax Rate |
|---|---|
| 0 - 8,952 | 1.92% |
| 8,952 - 75,984 | 6.4% |
| 75,984 - 133,536 | 10.88% |
| 133,536 - 155,229 | 16% |
| 155,229 - 185,852 | 17.92% |
| 185,852 - 374,837 | 21.36% |
| 374,837 - 590,795 | 23.52% |
| 590,795 - 1,127,926 | 30% |
| 1,127,926 - 1,503,902 | 32% |
| 1,503,902 - 4,511,707 | 34% |
| 4,511,707+ | 35% |
MXN annual amounts. Complex bracket system with credits at each level.
Corporate Tax
Standard Rate
30%
30% flat rate. Plus 10% on profit distributions. Employee profit sharing (PTU) of 10%.
VAT / Sales Tax
Standard Rate
16%
Reduced Rates
0%
16% standard. 0% on food, medicines, books.
Capital Gains Tax
Standard Rate
10%
10% on stock market gains. Real estate gains taxed at progressive rates.
Social Security Contributions
Employee
2.78%
Employer
26.5%
Self-Employed
2.78%
IMSS covers health, disability, retirement. Employer bears majority.
Special Tax Regimes
RESICO (Simplified Trust Regime)
1-2.5% monthly ISR on income for individuals with annual income under 3.5M MXN.
Eligibility: Individuals with business/professional income under 3.5M MXN/year (~USD 200k).
Digital Nomad Visa
Temporary Resident Visa allows remote work. No specific income requirement but must prove economic solvency.
Pros & Cons
Pros
- Very low cost of living
- RESICO 1-2.5% for small earners
- Proximity to US market
- Vibrant digital nomad scene
- Rich culture
Cons
- 30% corporate tax
- Complex tax system
- Security concerns in some areas
- PTU profit sharing obligation
- Bureaucratic challenges
Living Indicators
Cost of Living Index
Very affordable
Quality of Life Index
Average
Best For
Data Sources
Tax rate data for Mexico is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Mexico government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.