Understanding the corporate tax rate in Mexico is crucial for any firm already operating in or considering moving to this vibrant North American market. The corporate tax system in Mexico comprises a nationwide income tax, as well as state and local taxes, a value-added tax (IVA), withholding taxes, and various incentives. Getting the hang of filing, meeting corporate tax payment deadlines, and cashing in on those corporate tax incentives can make a big difference to your company’s profits.
Whether you run a global giant or a homegrown startup, this guide will help you trim your tax bill and keep the regulators happy.
What Is the Corporate Tax Rate in Mexico?
So, what is corporate tax rate in Mexico? The answer is simple: 30 percent of your taxable income. That federal rate kicks in for all profits earned in Mexico, whether the business is a local firm or a foreign player.
Standard Rate: 30% for all taxable entities.
Surtax: A 10% surtax on dividends paid to Mexican shareholders would raise the total tax on distributed profits to about 37 percent.
Minimum Tax (IETU): Mexico scrapped this levy in 2014. Nowadays, filers lean on the plain 30-percent base.
There is no special small-profit rate; companies face the same headline charge. Real tax pressure can still drift higher or lower after credits, perks, or local fees. When planners stack Mexico’s 30-percent rate against those of its neighbors, the mix of incentives stands out; they can slash the bill for qualifying projects.
Breakdown of Corporate Income Tax Components
Corporation tax in Mexico has two main pieces.
Federal Corporate Income Tax (ISR)
- Rate: 30 percent on taxable profits.
- Tax Base: Net income figured under Mexican Financial Reporting Standards (NIF) or IFRS, then tweaked for non-deductible costs and exempt earnings.
- Adjustments Include:
- Non-deductible items: fines, penalties, and some entertainment bills.
- Depreciation vs. tax depreciation: write-offs follow official schedules, not commercial life.
- Loss carry-forwards: net operating losses last up to ten years, but only 10 percent of taxable income can be claimed yearly.
Dividend Surtax
- Ten percent extra on dividends sent to resident shareholders. Corporations withhold it upfront to stop profits from escaping tax twice.
- International Treaties: Some agreements let foreign shareholders pay a lower or even zero surtax on dividends they receive.
State and Local Taxes
- Payroll Tax: Most states charge 1% to 3% on total payroll; companies can deduct this when calculating ISR.
- Real Property Tax: Towns tax land and buildings, but the rate differs by location, and the cost is usually non-deductible for ISR.
Value-Added Tax (IVA)
- Standard Rate: Most goods and services carry a 16% IVA.
- Border Rate: Regions near the U.S. pay a lowered 8% IVA on many items.
- Zero-Rate and Exempt Supplies: Exports and basic food items are zero-rated; some services, like most medical care and many financial fees, are tax-exempt.
- Input Tax Credit: Businesses can deduct the IVA they paid on purchases from the IVA they collect, so in effect, the tax often just passes through.
Special Business Taxes
- Flat Rate Business Tax (IETU): This levy was scrapped in 2014.
- Excise Taxes (IEPS): The federal government imposes extra duties on tobacco, alcohol, and gasoline, and firms that make or import those goods must register and pay.
By walking through each item, companies can spot what they owe and where deductions, credits, or smart structuring can push the final bill lower.
Corporate Tax Filing Requirements in Mexico
Meeting Mexico corporate tax payment deadlines keeps your business out of trouble and prevents extra costs.
Registration and Taxpayer Identification:
- RFC (Registro Federal de Contribuyentes): Before opening its doors, every company must sign up with the SAT (Servicio de Administración Tributaria) and get an RFC number.
- Digital Certificates: Firms also need an e.firma, or e-signature, plus a digital seal so they can file online and issue electronic invoices.
Annual ISR Return
- Deadline: The yearly corporation tax return has to land on the SAT’s desk by March 31 of the year after the books close, usually December 31 for most firms.
- Form: Use the Declaracin Anual de Personas Morales. It comes with schedules asking for revenues, expenses, credits, and any losses you plan to carry forward.
- Electronic Filing: Submit everything through the SATs e-filing site, logged in with your e.firma.
IVA Returns
- Frequency: Submit monthly IVA returns by the 17th day of the next month.
- Contents: Report the IVA you collected and what you paid on inputs; send the balance or apply for a refund.
Excise Tax (IEPS) Returns
- Frequency: File either monthly or quarterly, based on the product you sell.
- Requirements: List exact volumes and values of IEPS goods sold, and keep all sales and purchase slips as proof.
Penalties and Interest
- Late Filing: Delay may cost up to $3,000 MXN plus daily interest that climbs the longer you wait.
- Underpayment: Interest is the Bank of Mexico rate plus 1.47 percent on what you owe; surcharges can hit 20 percent.
- Electronic Invoice Non-Compliance: Big fines land if you fail to issue or validate a CFDI through SAT.
Keeping these Mexican corporate tax compliance services, e-filing, and early provisional payments saves money on penalties and shows the SAT you mean business.
Tax Year and Payment Deadlines in Mexico
Sticking to corporate tax payment deadlines in Mexico keeps cash flow steady and helps you stay out of the auditor’s spotlight:
Fiscal Year
- Default Period: Most corporations follow the calendar year from January 1 to December 31.
- Alternate Year-Ends: If needed, request approval from SAT for a different closing date; the period must stay 12 months, and you must notify SAT at least 30 days before the change.
Provisional ISR Payments
| Period Covered | Due Date |
| January | Feb 17 |
| February | Mar 17 |
| March | Apr 17 |
| … | … |
| December | Jan 17 |
Penalty Avoidance: To steer clear of fines, each payment must follow the ISR formula that ties it to cumulative income.
Annual ISR Return
- Due Date: File by March 31 after the end of your fiscal year.
- Extension: An automatic one-time extension moves the deadline to April 30 when you e-file with approved software.
IVA & IEPS
- Monthly IVA Return: Hand it in by the 17th of the month that follows the reporting period.
- Quarterly Option: Small taxpayers enrolled in REPECO can choose to file IVA returns every three months if they stay below set limits.
- IEPS Return: File either monthly or quarterly, depending on the type of product you sell.
Payroll and Social Security
- IMSS and INFONAVIT: Employers send their social security contributions by the 17th of the month after the wages are paid.
- Withholding on Salaries: The monthly ISR withheld from workers’ salaries is also due by the same 17th-day rule.
Keeping an internal calendar of all these corporate tax payment deadlines helps your company avoid missed filings, late penalties, and growing interest charges.
Withholding Taxes and Other Business Taxes in Mexico
In addition to the corporate income tax rate in Mexico, firms face extra withholding and business taxes that can surprise newcomers:
Withholding Tax Regime
| Income Type | Resident Rate | Non‑Resident Rate | Notes |
| Dividends | 10 percent | 10 percent | May be reduced to 5 percent under some treaties. |
| Interest | Exempt | 15 percent | Exempt if paid to government branches or qualifying banks. |
| Royalties | 10 percent | 25 percent | Treaty rates often 10 percent or lower. |
| Services (Tech, etc.) | — | 25 percent | Withholding required on certain technical service fees. |
Employer Obligations: Companies must hold the tax at source, pay it by the 17th of the month after payment, and file a withholding return.
Value-Added Tax (IVA)
- Most goods and services sold in Mexico carry a basic 16 percent IVA.
- Exports, many farm items, and select services sit at a zero rate.
- Businesses can reclaim the tax they paid on supplies by subtracting it from the IVA they collect.
Capital Gains Tax
- For companies, capital gains fall under the income tax system and face a 30 percent rate.
- A lighter charge may apply to profits from some share sales linked to Mexican real estate.
Social Security Taxes
- Employers hand over roughly 15 percent of wages to IMSS, covering pensions, health care, and more.
- Another 5 percent goes to INFONAVIT, the fund that helps workers afford homes.
Local Taxes
- Payroll Tax: Cities slap a payroll tax of 1 to 3 percent on total salary bills; firms can deduct it when paying ISR.
- Property tax: Property taxes vary by municipality and are usually based on the value of land and buildings; payments are not deductible.
By folding these charges into their budgets, businesses can size up their full tax load and keep cash flow steadier.
Corporate Tax Incentives, Deductions, and Exemptions
To spark investment, creativity, and regional growth, Mexico dangles several perks for companies.
Maquiladora (IMMEX) Program
- Firms that import raw materials or parts for export production can either defer or escape duties.
- Maquiladoras that meet set rules pay only 20 percent on profits, plus they may use faster depreciation.
Research & Development (R&D) Credit
- Firms get a 30 percent tax refund on R&D costs over a fixed floor, with a ceiling of 7 percent of payroll and investment.
- Eligible work includes tech upgrades, applied studies, and prototype testing.
Energy‑Related Deductions
- Companies can write off green or efficiency gear much sooner.
- They may deduct up to 100 percent of the purchase price right away.
Regional Incentives
- In border areas, buyers pay 8 percent IVA and can join extra growth programs.
- In Special Economic Zones, select ports and southern sites charge a 20 percent ISR and waive the dividend surcharge during the early years.
Free Trade Zone Perks
- In the Southern Isthmus SEZ, the 20 percent ISR lasts 10 years and climbs slowly toward the usual 30 percent.
- Firms also receive extra credits for hiring local workers or upgrading zone infrastructure.
By using these corporate tax incentives, businesses can cut their real tax bill well below 30 percent, which boosts returns and gives them an edge.
International Tax Treaties and Double Taxation Avoidance
Mexico has signed over 50 double-tax treaties (DTTs), so firms usually pay tax on cross-border earnings only once.
Scope and Benefits
- Withholding Tax Reductions
- Dividends held by firms with at least 10% ownership are usually taxed at 5% instead of the normal 10%.
- Interest income between banks can drop to 0% or 10%, easing cross-border loans and investment.
- Royalty payments often sit in the 5-10% band under most agreements.
- Methods to Eliminate Double Taxation
- With the credit method, any foreign tax paid counts against Mexico’s ISR, up to the local bill on that income.
- Under the exemption route, some receipts, like branch profits, stay out of Mexican tax if already taxed abroad.
Treaty Highlights
- USA: 5% on big dividends, 0% on bank loans.
- Canada: Mirrors U.S. rates on dividends and interest.
- Spain, Germany, UK: Lower levies on royalties and service fees, sparking fresh projects.
Transfer Pricing Regulations
- Mexico uses the OECD arm’s-length rule; companies must back related-party prices with solid documents and market comparables.
- Master and Local Files: Companies with global sales above €750 million must draft a master file; a local file is also needed for their work in Mexico.
- Penalties: Firms face penalties of up to 10 percent on tax adjustments if their transfer pricing paperwork is missing, late, or plainly wrong.
Controlled Foreign Company (CFC) Rules
- Mexico’s CFC rule taxes the untaxed profits of foreign firms owned by Mexican residents whenever those profits face a foreign tax below 22.5 percent.
- Put another way: a local parent cannot store passive income abroad forever without writing a local check.
Yet smart treaty planning and careful use of double-tax credits still let groups build overseas structures that save money.
How Commenda Supports Corporate Tax Compliance in Mexico
Mexico’s tax rules move fast and change often. To stay on track, local firms need strong in-house controls and trusted advisers. Commenda’s corporate tax compliance services team delivers:
- Registration & RFC Support
- Walks new companies through SAT sign-up, secures RFC numbers, and files to get e.firma keys.
- ISR & IVA Filing Automation
- Makes monthly ISR prepayment and IVA returns painless by calculating figures and building ready-to-submit e-files.
- Incentive Identification & Claims
- Screens projects for maquiladora breaks, R&D credits, SEZ perks, and other deductions, then drafts bulletproof claims.
- Transfer Pricing Documentation
- Builds master and local files, runs benchmark studies, and aligns with OECD rules so audits stay simple.
- Withholding Tax Management
- We create paying schedules for dividends, interest, and royalties, then prepare and file the monthly returns.
- Multijurisdictional Compliance Tracking
- Our team keeps an eye on state payroll taxes, property taxes, and SEZ reports, sending timely reminders for every deadline.
- Audit Defense & Representation
- Should SAT begin an audit, we stand in for you, gather the needed papers, and talk directly with the tax office.
- Real‑Time Dashboards & Alerts
- All tax due dates and filing statuses in Mexico sit in one online dashboard, and the system pings your team before something is late.
By pairing local know-how with tech that works around the clock, Commenda keeps your firm compliant, unlocks every eligible incentive, and cuts legal and money risks. Reach out to Commenda today and put expert tax support in Mexico on your side.
Common FAQs About Corporate Tax in Mexico
Q. What is the current corporate tax rate in Mexico?
Mexico charges a flat 30 percent on taxable profits, plus a 10 percent surtax on any dividends paid to local shareholders.
Q. How is the corporate income tax calculated in Mexico?
Start with the profit shown in your accounts, trim non-deductible costs, add back tax depreciation, use the loss carry-forward, then multiply the final number by 30 percent.
Q. Does Mexico charge a different corporate tax rate for small firms?
No, every corporation pays the same 30 percent ISR, regardless of size. However, tiny businesses might join easier IVA filing plans.
Q. When do Mexican companies file corporate tax returns?
The yearly ISR return is due by March 31 after the fiscal year. Monthly prepayments are due by the 17th for the previous month’s income.
Q. What happens if a Mexican company files taxes late?
Late filers face fixed fines up to MXN 3,000, interest at Banxico plus 1.47 percent, and surcharges that can climb to 20 percent on what is owed.
Q. What tax breaks or write-offs do Mexican firms get?
Major incentives include the IMMEX plan, which cuts ISR to 20 percent, gets 30 percent back for R&D spending, and special economic zone benefits that also drop the rate to 20 percent.
Q. Is there a minimum corporate tax in Mexico?
There is no minimum tax; firms simply pay the standard 30 percent ISR on their taxable income.
Q. Are foreign companies taxed differently in Mexico?
Yes and no. Foreign firms earning money in Mexico pay the same 30 percent corporate tax, but they also deal with extra withholding on dividends, interest, and royalties; tax treaties can slash those rates.
