Corporate Taxes in Mexico

Corporate taxes in Mexico include a flat income tax rate of 30% on taxable profits for resident companies. Additionally, companies may be subject to a Value Added Tax (VAT) of 16% on most goods and services, as well as withholding taxes on payments like dividends, royalties, and interest to foreign entities. Businesses must also comply with annual reporting obligations, including financial statements and tax returns, to avoid penalties.

Mexico Border Zone Incentives

Mexico’s Northern and Southern borders receive a benefit that consists of a tax credit equivalent to 50% of VAT, thus an 8% tax. The taxpayer must reside in said regions. These regions also enjoy an Income Tax credit, allowing these companies to be subject to only 2/3 of the tax caused by the income carried out from activity in these regions.

Import / Export in Mexico

Mexico's strategic location and free trade agreements, including USMCA, make it a global hub for importing and exporting goods. Businesses engaged in trade must register with Mexico’s Importers Registry and comply with customs regulations, tariffs, and documentation requirements to ensure smooth cross-border operations.

Maquiladora Program

The Maquiladora Program in Mexico, now called IMMEX, allows foreign companies to import raw materials and components duty-free for manufacturing and subsequent export. This program supports cost-efficient production while providing tax incentives, making Mexico a key player in global supply chains. Many maquiladoras en Mexico are run by operational partners, called shelter service providers.

Mexico Free Trade Zone

In 2019, Mexico's Free Trade Zone came into effect for 43 municipalities through 6 states along Mexico's northern border. Components of the program include:

• Encourage economic growth in the area
• Reduction of VAT & Income Tax rates
• Promote the well-being of the population
• Improvements in fuel competition
• Establishment of tax incentives for fuel