Mexico

Individual - Foreign tax relief and tax treaties

Last reviewed - 12 February 2020

Foreign tax relief

An individual resident may derive income from another country, which is subject to tax in that country. The individual may credit the foreign income tax paid against the Mexican income tax liability. However, the credit is limited to the lesser of (i) the amount of foreign tax paid with respect to foreign-source income that is taxable in Mexico and (ii) the amount of Mexican tax corresponding to that income. In addition, no credit is allowed for foreign taxes imposed on income that is exempt from Mexican taxation.

Tax treaties

Tax treaties may reduce or eliminate tax withholding from non-residents, and the treaty provisions should be analysed accordingly, depending on the country of residence of the individual receiving Mexican-source income.

Mexico has concluded double-taxation agreements (DTAs) with the following countries:

Argentina Hong Kong Peru
Australia Hungary Philippines
Austria Iceland Poland
Bahrain India Portugal
Barbados Indonesia Qatar
Belgium Ireland, Republic of Romania
Brazil Israel Russia
Canada Italy Saudi Arabia
Chile Jamaica Singapore
China Japan Slovak Republic
Colombia Korea, Republic of South Africa
Costa Rica Kuwait Spain
Czech Republic Latvia Sweden
Denmark Lithuania Switzerland
Ecuador Luxembourg Turkey
Estonia Malta Ukraine
Finland Netherlands United Arab Emirates
France New Zealand United Kingdom
Germany Norway United States
Greece Panama Uruguay

Mexico has social security totalisation agreements in effect with Canada and Spain. An agreement with the United States has been signed, but it has not completed the entire approval process.