Information on Taxes in Mexico

As an expat in Mexico, the taxes you’ll pay depend in part on your situation. If you own property in Mexico you’ll have real estate taxes. If you rent out that property or own a business, have a job, or have interest-bear­ing bank accounts, you’ll owe income tax. Even if you have none of these, you’ll still pay sales tax at shops and value-added tax when you eat out at restaurants.

It’s a good idea to meet with an international tax specialist before you move to Mexico; he or she can advise you on how to best minimize your tax obligations, especially if you have significant assets in both Mexico and your home country. If you do business in Mexico, you’ll also want a good tax advi­sor there.

Income tax in Mexico:

You will owe income tax in Mexico if you hold a job, run a business, rent out a property you own, or hold an interest-bearing bank account or security in Mexico. In most cases you will need to file a Mexican tax return.

Property taxes in Mexico:

There are three types of tax that you’ll have for residential property over the years that you own it:

1. A 2% acquisition tax when you buy the property

2. Annual property taxes (known as predial)

3. Capital gains tax when you sell the property

Value-added tax in Mexico:

In Mexico a value-added tax is applied to most goods and services. This tax is 16% in most of the country and 11% in border areas.

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