Mexico (MX)

🌍 Special Expat Tax Rules

Mexican tax residents are generally taxed on worldwide income. Residence arises when Mexico is the taxpayer's home or centre of vital interests; foreigners spending long periods, working remotely, buying property or moving family should assess residency with a licensed Mexican contador. Digital nomads should not assume visitor status equals no Mexican tax risk — if Mexico becomes the economic base, residency can arise even without a formal immigration status change. 2026 personal deductions (deducibles personales): most are capped at the lesser of 5 annual UMA ($213,973 MXN; 1 UMA = $42,794 MXN from February 2026) or 15% of total annual income. Allowable items: (1) Medical, dental, psychology and nutrition fees — must be paid by electronic transfer, card or nominative cheque; cash is rejected by SAT regardless of CFDI; covers taxpayer, spouse, parents, grandparents, children and grandchildren whose income is below the annual minimum wage. (2) Real mortgage interest on primary residence only from a financial institution, INFONAVIT or FOVISSSTE; loan principal cap 750,000 UDIS (≈ MXN 5.8 million). (3) Voluntary AFORE or personal retirement plan (PPR) contributions — capped separately at 10% of annual income up to $213,973 MXN, stacking on top of the general 5 UMA/15% cap. (4) Mandatory school transport if compulsory per institutional policy and itemised separately on the school invoice. (5) Donations to authorised donee institutions — up to 7% of prior-year income for private donees plus 4% for federal agencies; donations have their own separate cap outside the 5 UMA/15% general cap. (6) Funeral expenses for direct family members — up to 1 annual UMA ($42,794 MXN). School tuition (colegiaturas) carries additional level-specific annual caps (MXN 14,200–24,500 by level) outside the 5 UMA/15% cap. Taxpayers in RESICO cannot apply personal deductions. Get RFC (tax ID) and e.firma (advanced electronic signature) early if you will invoice, work, buy property, file taxes or open financial products. RESICO (Simplified Trust Regime) can be attractive for smaller income but is strict; foreign income and overseas ownership can affect eligibility. US citizens remain subject to US tax filing obligations; coordinate SAT and IRS records to avoid double taxation.