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Mexico Income Tax Rate for 2017, 2016, 2015, 2014, 2013

Mexico Personal Income Tax Rate 2016

Taxable income (MXN)

 

Tax Rate

0.01 to 5,952.84

1.92%

5,952.85 to 50,524.92

6.4%

50,524.93 to 88,793.04

10.88%

88,793.05 to 103,218

16%

103,218.01 to 123,58.20

17.92%

123,580.21 to 249,243.48

21.36%

249,243.49 to 392,841.96

23.52%

392,841.97 to 750,000.00

30%

750,000.01 to 1,000,000.00

32%

1,000,000.01 to 3,000,000.00

34%

3,000,000.01 and above

35%

 

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.

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.

Mexico Personal Income Tax Rate for Non Residents 2016

Taxable income (MXN)

 

Tax Rate

0 to 125,900

0%

125,900 to 1,000,000

15%

1,000,000 and above

30%

 

Non-residents are subject to tax withholding (WHTs) on Mexican-source interest income at rates varying from 0% to 30%, 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 outside the Mexican stock exchange. 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 30% of the net gain. Sales of shares in the Mexican stock exchange are subject to a flat 10% tax withholding. 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.

Mexico Income Tax Rates 2014 and Deductions

Mexico Income Tax Rate for Individual Tax Payers

Lowest Individual Tax Rate is 1.92 % and Highest Rate is 35%

Taxable income (MXN)

 

Tax Rate

0.01 to 5,952.84

1.92%

5,952.85 to 50,524.92

6.4%

50,524.93 to 88,793.04

10.88%

88,793.05 to 103,218

16%

103,218.01 to 123,58.20

17.92%

123,580.21 to 249,243.48

21.36%

249,243.49 to 392,841.96

23.52%

392,841.97 to 750,000.00

30%

750,000.01 to 1,000,000.00

32%

1,000,000.01 to 3,000,000.00

34%

3,000,000.01 and above

35%

 

In the case of split payroll arrangements, the portion of the compensation received directly from abroad is subject to monthly personal income tax payments. That is to say, the individual is the one obligated to file monthly tax returns. It is important to mention that when the cost of the compensation paid from abroad is charged back to a Mexican entity, as salaries paid on behalf of the Mexican entity, such Mexican entity is obligated to withhold and remit Mexican income taxes.

 

Monthly tax payments are due on or before the 17th day of the month following in which the compensation was received, using the monthly graduated rate scales. In case the individual is obligated to file monthly personal returns, additional days are granted depending on the individual?s taxpayer ID number.

An employment subsidy may be applied against monthly withholdings and the annual tax liability. Employees with a monthly salary income more than MXP7,382.34 are not allowed to receive such subsidy.

Tax-exempt income

The employee?s transportation costs incurred for a business trip, which has also been combined with home leave, is not taxable. However, the employee?s family transportation cost is taxable.

Moving expense reimbursements, which are claimed as a business expense, are non-taxable for the individual, but relocation allowances or unsubstantiated expenses are taxable.

Certain deferred compensation plans may result in non-taxable compensation, provided that the cost of the compensation is not borne by a Mexican employer.
Social welfare benefits granted to all employees, such as group life and medical insurance (without cap), as well as disability subsidies, educational scholarships, daycare center, cultural and sport activities, and other activities of similar nature (up to certain caps) are not subject to tax.

Taxation in Mexico for Non-residents

Non-residents are only taxed on Mexican-sourced income. Mexican tax legislation establishes that income derived from an employment relationship should be considered as Mexican-sourced income when the associated personal services are rendered in Mexico.

Mexican income taxes for non-residents are calculated as follows.

Annual compensation (MXP)

 Annual compensation (MXP)

 

 Income tax rate (Percent)

0

125,900

0%

125,900

1,000,000

15%

1,000,000

Over

30%


The tax should be paid within 15 days following the receipt of the income, unless a Mexican entity is obligated to withhold the tax or one of the earlier mentioned options to remit the tax is used, in which the due date will be the 17th day of the month following in which the compensation was received.

Corporate Tax Rates in Mexico

The rate reduction that was foreseen in the previous tax law was amended and the rate will remain at 30%. The Business Flat Tax has been abrogated starting January 2014 with some transitory rules applicable.

Capital Gains Tax in Mexico

Worldwide investment income and capital gains for resident individuals is subject to Mexican tax at ordinary graduated tax rates.

Non-residents are only taxed in Mexico when the income derives from Mexican sources.

Income from dividends, whether cash dividends, received by a resident individual is taxable regardless of the source of payment.

Any interest income received from Mexican or non-Mexican bank is taxable for resident individuals.

Non-residents should pay taxes on interest in case the income is derived from Mexican sources. (i.e. paid by a Mexican resident or a non-resident with a permanent establishment in Mexico or in case the capital is invested in Mexico).

Mexico Tax on Foreign exchange gains and losses

Foreign exchange gains are aggregated with other sources of income earned by the resident individual during the year and taxed at ordinary graduated tax rates.
Foreign exchange losses are allowed to reduce taxable interest from other non-Mexican interest, with certain limitations.

Mexico Due Dates for filing Returns / Reporting and Payment

Year End is 31st December. Last date to file Tax Return is 30th April. No Extension is allowed.

 

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