Country：墨西哥 · Tax & Audit
Mexico · Tax & Audit
Mexico's standard corporate income tax (ISR) rate is 30% (resident companies taxed on worldwide income), and the standard value-added tax (IVA) rate is 16% (8% in border regions); withholding tax is 10% on dividends, 4.9%–35% on interest and 5%–35% on royalties. State payroll tax (ISN) ranges 1%–4% by state. Electronic invoicing (CFDI) is mandatory with a cross-check system; late filing faces heavy penalties. Mexico has no national corporate minimum tax, but MNEs must watch Pillar Two.
Key points
- Corporate income tax (ISR) rate 30% (resident companies taxed on worldwide income); non-residents taxed only on Mexico-source income, mainly via withholding.
- Value-added tax (IVA) standard rate 16% (8% in border regions); exports 0%; monthly filing due by the 17th of the following month.
- Withholding tax: 10% on dividends, 4.9%–35% on interest, 5%–35% on royalties (reduced by tax treaties).
- State payroll tax (ISN): 1%–4% by state (e.g. Mexico City 3%, Nuevo León 2%–3%).
- CFDI e-invoicing is mandatory; the system cross-checks invoices against bank flows, and inconsistency is treated as fictitious transactions.
Procedure
- After incorporation, apply to SAT for RFC tax number and FIEL e-signature.
- Prepay ISR and file IVA monthly (by the 17th of the following month).
- Annual ISR return due by 31 March of the following year.
- Maintain electronic accounting (Contabilidad Electrónica) and file monthly.
- Financial statements of large companies (revenue over MXN 100 million or over 300 employees) must be audited.
Hard requirements
- RFC tax number; CFDI invoices; electronic accounting; transfer-pricing documentation (for related-party transactions).
Costs
ISR rate 30%; IVA rate 16%; ISN state tax; audit and tax advisor.⏱ ⏱ Timeline：Monthly filing deadline is the 17th of the following month; annual return deadline is 31 March.⚠ Common risks
- CFDI inconsistent with bank flows triggers tax audit.
- Wrong invoice XML causes inability to deduct input VAT.
- Profit sharing (PTU) is 10% of pre-tax profit, raising labour costs.
- Late filing accrues penalty interest and criminal risk (in malicious evasion cases).
Handbook
📘 Step-by-Step Handbook (with owner / timeline / cost / penalties)
Applies to：Day-to-day tax and audit compliance for companies registered and holding an RFC in Mexico; covers ISR, IVA, CFDI, electronic accounting, payroll tax and PTU.
Prerequisites
- RFC activated and e.firma/FIEL obtained.
- Local tax representative appointed or DeclaraNet filing used.
- Spanish accounting books and NIF standards can be implemented.
- Employees registered with IMSS, INFONAVIT, ISN (links to employment dimension).
| Step | Action | Owner | Timeline | Cost | Official form / system | Notes & penalties |
|---|---|---|---|---|---|---|
| 1 | Apply for RFC and FIEL upon incorporation. After incorporation, promptly apply to SAT for RFC and activate e.firma (FIEL); platforms (e.g. e-commerce) without activated RFC may withhold 16% IVA plus 20% income tax, raising the tax burden. | Legal representative / SAT | — | SAT fee low. | RFC registration / e.firma | RFC is the prerequisite for all tax operations. Penalty：Late application triggers 36% platform withholding and possible fines. |
| 2 | Monthly IVA and ISR provisional payment (by the 17th of the following month). Via DeclaraNet (signed with e.firma), file and pay monthly VAT (IVA: 16% domestic, 8% border, 0% export) and the ISR provisional prepayment (30%), by the 17th of the following month. | Tax representative / accountant | — | Tax due (ISR 30%, IVA 16%). | Monthly filing (DeclaraNet). | New companies are usually exempt from monthly ISR prepayment in the first year; input-VAT deduction requires the counterparty RFC to match. Penalty：Late filing accrues penalty interest and fines. |
| 3 | Annual ISR return (by 31 March of the following year). Submit the annual income-tax return and settle by 31 March of the following year; above a certain size, attach a certified-public-accountant audit report. | Accountant / auditor | — | Audit fee (if above threshold) | Annual ISR return | Size thresholds per SAT rules (commonly registration-capital or revenue above a threshold requires audit). Penalty：Late annual return fined and may trigger audit. |
| 4 | CFDI electronic invoice (mandatory). All revenue-related transactions must issue CFDI e-invoices through the SAT-certified system, stating both parties' RFC and SAT verification code; CFDI data is directly linked to monthly filings and cross-checked by SAT. | Finance | — | — | CFDI e-invoice | From 2025 CFDI 4.0 applies; the time gap between invoice and bank flow must be minimal; wrong XML or counterparty RFC prevents deduction. Penalty：No CFDI or fictitious invoice, fine up to 20% of annual revenue. |
| 5 | Electronic accounting (Contabilidad Electrónica) monthly filing. Maintain Spanish electronic books under Mexican accounting standards (NIF) and file the general ledger, trial balance and journal entries to SAT monthly. | Accountant | — | — | Electronic accounting filing | Books and vouchers must be kept at least 5 years (recommend 10). Penalty：Missing or inconsistent filing triggers audit. |
| 6 | Payroll tax and social security (IMSS/INFONAVIT/ISN). Register employees with IMSS and INFONAVIT and pay monthly; employer social security about 25%–35% of wages, INFONAVIT 5% of wages, state payroll tax (ISN) 1%–4% (e.g. Mexico City 3%, Nuevo León about 2%–3%). | Payroll / accountant | — | Employer about 25%–35% of wages + INFONAVIT 5% + ISN 1%–4% | Payroll tax / social-security filing | Links to employment dimension; misclassifying employees (as outsourced) is high-risk. Penalty：Non-payment of social security / payroll tax fined |
| 7 | PTU profit sharing (by 31 May of the following year). Distribute 10% of the prior year's taxable profit (utilidad fiscal) to employees, calculated and paid within 60 days after the annual ISR return (usually no later than 31 May of the following year). | Accountant | — | 10% of pre-tax profit | PTU calculation sheet | Per-person cap (no more than 3 months' wages or the 3-year average PTU, whichever lower); companies operating less than one year usually exempt. Penalty：Non-distribution may trigger employee litigation |
| 8 | Transfer pricing and audit (related parties / MNE). Prepare transfer-pricing (TP) documentation for related-party transactions; large companies (above a revenue threshold) must have financial statements externally audited; MNEs must watch Pillar Two (GloBE) compliance. | Tax / auditor | — | Audit and advisor fees | TP documentation / audit report | Without TP documentation, taxable income may be adjusted and penalised. Penalty：Missing transfer pricing adjusted and fined |
✅ Self-check list
⚠ Common pitfalls
CFDI inconsistent with bank flows影响：SAT treats as fictitious transactions, triggering audit and back tax规避：Build real-time invoice/bank-flow reconciliation, minimise the time gap
Wrong invoice XML/counterparty RFC影响：Input VAT not deductible, raising tax burden规避：Verify counterparty RFC and XML format before issuing, use the certified system
No PTU accrual影响：Employee litigation and back payment规避：Accrue PTU reserve of 10% of pre-tax profit in the annual budget
Employee/contractor misclassification影响：Fine up to 200% of wages规避：Strictly distinguish employees from independent contractors, use an EOR if needed
Missing transfer-pricing documentation影响：Related-party transactions adjusted and penalised规避：Prepare TP documentation whenever related-party transactions exist, retain pricing basis
Late filing影响：Penalty interest accrues, malicious evasion involves criminal risk规避：Build a filing calendar, submit even zero-filings.
📅 Ongoing post-incorporation obligations
- Monthly CFDI/IVA/ISR filing (17th of following month)
- Annual ISR return (31 March) and audit
- Electronic accounting monthly filing
- PTU distribution (by 31 May)
- Transfer-pricing documentation updates (related-party transactions)
- Address, capital or legal-representative changes updated at SAT promptly.
🔗 Official portals
📎 Source：Mexico Tax Administration Service (SAT); PwC Tax Summaries – Mexico; CFDI e-invoicing system
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