Taxes in Mexico

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Mexico's Taxes for Retirees, Expats and Digital Nomads

Taxes in Mexico

Taxes for expats in Mexico can often be a source of confusion and stress for those new to the country. Taxes are an important part of understanding your rights and responsibilities as a resident or visitor in Mexico, so it’s important to understand how they work.

Mexico is a “federal republic” which means that taxes are implemented both at the federal level, by the national government, and at the state level, by all the individual states. Taxes collected at the federal level go towards funding services such as health care, education, infrastructure and security. Taxes collected at the state level go towards funding local services such as public safety and transportation.

The tax system in Mexico is based on a progressive rate: meaning that those earning higher incomes pay higher rates of income tax than those earning lower incomes. The marginal tax rate on earnings can range from 1-35%, depending on income levels and other factors such as marital status or number of dependents. For expats living in Mexico, this means their income tax rate may change from year to year if their salary or circumstances change.

In addition to income taxes, there are other types of taxes that you may need to pay as an expat in Mexico including property taxes (Impuesto Sobre Bienes Inmuebles), sales and value added taxes (IVA) which are applied when purchasing goods or services from retailers or businesses; vehicle taxes (Impuesto Sobre Automóviles); tourist fees for stays longer than seven days; inheritance taxes; gift taxes; and capital gains tax on investments or transfers of assets abroad.

It’s important to know what duties you have according to the law when it comes to paying your taxes while living in Mexico – whether it’s filing your annual income tax return with authorities, registering yourself with local authorities or simply staying up-to-date with changes to taxation rules – because failure to do so could result in fines or even criminal charges. To ensure compliance with all relevant laws regarding taxation, it’s recommended that you consult with a qualified Mexican accountant who understands current taxation rules and regulations. Doing so can help you understand your obligations as an expat and ensure that you’re paying the right amount of taxes at the right time.

By understanding Taxes for Expats in Mexico, you will be able to ensure that you are a responsible expatriate and also take advantage of any deductions or incentives available to make sure that you aren’t overpaying. With the right knowledge and guidance, Taxes for Expats in Mexico can be a manageable part of your life as an expat!

Traveling to 🇲🇽 Mexico soon?

I recommend these travel resources for Mexico that I personally use:

🏨 Hotels: I have found that Expedia and consistently have the best deals on hotels and resorts in Mexico. If you prefer to stay at a vacation rental, check VRBO that is usually cheaper than AirBnB’s added fees!

✈️ Flights: To find the best flight deals to Mexico, I always use Kayak. Remember to subscribe to their price alerts for the travel dates you want. Another great alternative for flight deals is Expedia.

🚗 Rental Cars: I always use and highly recommend Discover Cars because it allows me to compare several car rental companies and view ratings on various factors such as overall value, pick-up procedure, agent efficiency, car condition, and total time taken.

🚙 Cancun Airport Transportation: For the fastest and easiest way to travel, I suggest arranging a private transfer with Cancun Airport Transportation. Honestly, no better way to travel from the airport to your hotel or resort.

🤿 Tours & Activities: For tours and activities in Mexico, I highly recommend using either Viator or GetYourGuide. These websites offer a full refund if you cancel your booking 24 hours before the start of the tour, and they also provide excellent customer service in case of any issues.

🚨 Travel Insurance: I always suggest purchasing travel insurance as a precaution before traveling, especially after a recent accident in a taxi in Mexico. For short trips, I recommend Travel Insurance Master, whereas for digital nomads, Safety Wing is a better option.

📷 Best Camera for your trip: I always carry with me a GoPro, It’s light, compact, takes great video and pictures, and most importantly, it’s waterproof! You just can’t go wrong with one. If you are interested in higher quality video and photography, I always carry with me on my trips and highly recommend the Sony A7IV which I think is the best travel DSLR Camera out there.

☀️ Biodegradable Sunscreen: Remember to include a good sunscreen to protect yourself from the summer sun. I always use and suggest Sun Bum Sunscreen, which is vegan, reef-friendly, and cruelty-free.