Expatriate tax ebook - Mexico

Facts and figures
Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates

Pre arrival procedures
Every person who intends to work in Mexico needs an employment visa duly authorized by the Mexican Immigration Institute (INM by its initials in Spanish), prior to their entrance into the country.

In case that the employer is residing abroad, and the individual is considered as a Mexican resident for income tax purposes, it would be needed to obtain a Mexican tax ID number.

Employment visas
In order to obtain an employment visa, the Mexican entity that intends to employ an expatriate must request his/her entry into the country to the INM, whether the labor activity will be paid or unpaid.

There are different types of employment visas:

• Employment Visa: Issued in order to attend professional, scientific, or business activities, whether lucrative or not. Said employment visa must be requested to the INM by the Mexican entity that intends to employ the expatriate. The expatriate must prove capacity, abilities and experience to the INM with due documentation, such as diplomas, certificates, degrees; in some cases medical examinations might be required. The employment visa may be issued as an:

a) FM3 visa: valid for a one-year period, with the feasibility to be renewed four consecutive times.

b) FM2 visa: valid for a five-year period, the expatriate must remain in the country for at least 3.5 years, during this five-year period.

In case the expatriate is entering the country with family, spouse and/or children, they will require FM3 or FM2 visas if they intend to be residents.

• Derived from the international free trade agreements, the Mexican immigration authorities grant European, Canadian and American citizens an automatic 180 days renewable business visa (“FMN”).

Tax returns and compliance
Mexican or foreign residents are requested to file monthly tax returns. In case the employer is a Mexican resident, such employer is requested to withhold and pay the respective tax.

If the employer is a legal entity residing abroad, the individual is requested to pay the tax directly to the Mexican authorities.

In case of Mexican residents, the tax will be paid on or before the 17th day of the following month in which the income was received and, in case of foreign residents, the payment would be done within 15 days following the date in which the income was received.

Mexican residents are compelled to submit an annual tax return at latest on April of the following tax year in which the income was received. Late filings generate surcharges and fines.

Tax year
Mexico's Tax year begins on January 1st and ends on December 31st. Annual tax returns for individuals are due for filing on or before April the 30th of the following tax year in which the income was received.

Income Tax Rates

In case of foreign residents for income tax purposes, the first 125,900.00 pesos obtained in the year are exempt of tax; from such amount to 1,000,000.00 pesos the tax rate is 15%; and any income that exceeds this amount, the tax rate is 30%.

In case of Mexican residents, the individuals are requested to apply a progressive rate with rates that range between 1.92% and 28% (30% for the period 2010 - 2012), any income that exceeds in monthly basis $32,736 pesos or in annual basis $392,841 pesos, would be taxed at the 28 % tax rate (30% for the period 2010 - 2012).

Information about Mexico:

• introduction
• facts and figures
• basis of taxation
• what taxes?


Last updated June 25 2010

Please be aware that the data included in this expatriate tax e-book is correct at the time of publication. Please do not act on the information contained within this e-book without first seeking expert, professional advice.
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