SAT Income Tax Brackets in Mexico for 2024

There are several categories of tax in Mexico, and the main ones are income tax, value-added tax (VAT), tariffs (or customs duties), a Special Tax on Production and Services (known locally as IEPS) and social security. Additionally, local taxes include real estate tax and payroll tax. 

The official tax body charged with administering the taxation system in Mexico is Servicio de Administración Tributaria (SAT).

The main law on income tax, Ley del Impuesto sobre la Renta, provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with Mexican tax laws.

Here you will learn about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates 
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates 

Headline Tax Rates in Mexico

Personal Income Tax (PIT) Brackets in Mexico for 2024

It is important that you understand who constitutes a resident for tax purposes in Mexico:

• an individual who has a home in Mexico is considered a tax resident regardless of whether they are a Mexican citizen or a foreigner
• a resident individual is subject to income tax on their worldwide income, regardless of their nationality
• a non-resident, including a Mexican citizen, who can prove residence for tax purposes in a foreign country is taxed only on Mexican-sourced income

Personal Income Tax for Resident Individuals

Personal Income Tax for Non-Resident Individuals

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Mexico for 2024

A legal entity incorporated in Mexico is regarded as a tax resident. A foreign entity that maintains its main place of business or corporate address in Mexico is also regarded as a tax resident. Residents are subject to CIT on worldwide income.

Corporations that engage exclusively in agriculture, livestock, fishing and forestry activities are subject to a reduction of 30% of their tax liability.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Mexico

Individuals

An individual who is tax resident in Mexico is subject to worldwide capital gains tax (CGT). However, gains from the sale of a taxpayer’s principal residence are exempt if certain requirements are met and this exemption applies to only one sale every three years.

Gains on the sale of securities are subject to a 10% CGT on the net gain for the year.

Corporations

A corporation is taxed on capital gains on: 

• securities – the tax basis may be adjusted for inflation
• shares sold through the stock market – this includes the sale of shares issued by Mexican companies, securities representing such shares, shares issued by foreign companies and derivative financial operations referenced to stock indexes 
• real estate – calculations may be adjusted for the cost basis of land and buildings
• machinery and equipment – gains or losses may also be calculated after adjusting for inflation

Withholding Tax Rates for Residents and Non-Residents in Mexico

Payments to Mexican residents

In general, payments to resident corporations are not subject to withholding tax (WHT).

Payments by resident corporations to resident individuals are subject to WHT. 

Payments to non-residents

Payments to non-resident corporations and individuals are usually withheld. However, as Mexico is a signatory to certain double taxation treaties (DTTs), the WHT varies, depending on whether the individual or corporation is in a treaty country or not.

Payments by resident corporations to resident individuals are subject to WHT rates as tabulated below:

Non-residents’ wages and salaries are taxed on the basis of a 12-month earnings period following the WHT rates tabulated below:

Value-Added Tax Rates in Mexico