Resident individuals are subject to Mexican income tax on their worldwide income, regardless of their nationality. Non-residents, including Mexican citizens who can prove residence for tax purposes in a foreign country, are taxed only on their Mexican-source income.
Personal income tax rates
The following tax rates are effective for resident individuals for calendar year 2023:
|Taxable income (MXN)||Basic tax|
|Over||Not over||Tax on column 1 (MXN)||Tax on excess (%)|
If the employee is considered a non-resident for Mexican tax purposes, the tax rate applicable to compensation will vary from 15% to 30%. The first MXN 125,900 of employment income received in a 12-month floating period will be tax exempt.
The following tax table is applicable to income tax with respect to income earned by non-residents for the calendar year 2023:
|Taxable income (MXN)||Tax rate (%)|
Non-residents are subject to withholding taxes (WHTs) on Mexican-source interest income at rates varying from 0% to 35%, depending on several factors. Non-residents are subject to Mexican tax on gains arising from sales of real property located in Mexico (including shares of foreign companies holding a significant amount of Mexican real property) as well as the sale of shares of Mexican companies. Generally, when a capital gain is subject to tax, the non-resident investor can elect to pay either a flat rate of 25% of the gross proceeds or 35% of the net gain. Sales of shares in the Mexican stock exchange are subject to a flat 10% tax withholding on the profit from said transaction.
Other types of Mexican-source income (including rents and royalties) are also subject to WHTs when paid to a non-resident. In the case of dividends and other corporate distributions from Mexican companies, since 2014, there is a 10% tax withholding on the dividends from corporate profits generated after 2013.