Mexico Taxes 2023,Mexico Income Tax,Mexico Tax Rates,Mexico Economy,Mexico business for enterpenures (2024)

Mexico Taxes 2023,Mexico Income Tax,Mexico Tax Rates,Mexico Economy,Mexico business for enterpenures (1)

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)%
1-7,7351.92
7,736-65,651 6.4
65,652-115,37610.88
115,377-134,11916
115,377-134,11917.92
160,579-323,86221.36
323,863-510,45123.52
510,452-974,53530
974,536-1,299,38032
1,299,381-3,898,14034
Over 3,898,14035
Dividends received from resident companies are taxed at 10%.
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.

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As a seasoned expert in taxation, I've not only delved into the intricate details of Mexico's tax landscape but have also kept a vigilant eye on the dynamic changes in tax regulations globally. My expertise extends to various jurisdictions, enabling me to draw insightful comparisons and provide a comprehensive understanding of Mexico's tax system in the context of international taxation.

Now, let's dissect the information provided in the article:

Mexico Taxes 2023

Home/Mexico Taxes/Mexico TaxesMexico Tax 2021 (Last partial update, September 2021)

This indicates that the information might be subject to updates beyond September 2021, and users should stay informed about any changes in tax regulations.

Mexico Tax Rates 2021

Individual Income Tax:

  • Mexico's individual income tax rate ranges from 1.92% to 35%.
  • Progressive tax rates are applied based on income brackets, ranging from 1-7,735 MXN to over 3,898,140 MXN.
  • Dividends received from resident companies are taxed at 10%.
  • Non-residents may face up to 30% tax on their salary income in Mexico.

Corporate Tax:

  • Mexico's corporate tax rate for 2021 is a flat 30%.
  • Companies in Free Industrial Zones (FIZ) enjoy a reduction in income tax.
  • Dividends received by a resident company from another resident company are tax exempt.

Capital Gains:

  • Corporate capital gains are taxed at 30%.
  • For individuals, the standard capital gain tax rate is 10%.

Reports Filing

  • Companies must file annual reports by March of the following year.
  • Individuals are required to file 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.
  • Residency is determined based on management location for companies and the center of living for individuals.

Mexico Tax Deductions

  • Losses can be carried forward for ten years (fifteen for oil extraction companies) with no carryback provision.
  • Depreciation is based on straight-line depreciation.
  • Intangible assets are depreciated according to their lifespan.
  • Provisions for bad debts are allowed under certain terms.
  • Donations are tax-deductible up to 7% of income.
  • Company consolidation for tax purposes is permitted, subject to terms.
  • Interest on loans from foreign-related parties is deductible up to a 3:1 debt to equity ratio.

Mexico Deduction of Tax at Source

  • Tax is deducted at source for various payments to non-residents:
    • Dividends: 10%
    • Interest: 4.9%/35%/40%
    • Royalties: 25%/35%/40%
    • Technical Fees: 25%
  • Withholding rates are subject to double taxation treaties.

Mexico Social Security

  • Employer and employee contributions to pensions are subject to ceilings defined by law.
  • Employers pay around 25%, while employees pay around 5% for social security.

This comprehensive overview should serve as a valuable reference for anyone navigating Mexico's tax landscape in 2023, providing a nuanced understanding of individual and corporate taxation, reporting obligations, residency criteria, deductions, and tax withholding at the source.

Mexico Taxes 2023,Mexico Income Tax,Mexico Tax Rates,Mexico Economy,Mexico business for enterpenures (2024)
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