Our BPO Solutions

From daily financial operations to specialized financial challenges, Prodensa helps you access the expertise your business needs in Mexico.

Accounting, Bookkeeping & Financial Reporting Transaction registration, accounting records, financial reporting, and fixed asset management to support accurate, timely financial information.

Accounts Payable & Receivable Scalable management of payment and collection processes, with experience across international ERP systems and complex manufacturing operations.

Treasury, Cash Flow & Banking Cash management, bank administration, payment execution and coordination, and treasury support to improve financial control and visibility.

Payroll Administration & Labor Compliance Payroll processing and coordination, social security compliance, and employee benefits administration aligned with Mexican regulatory requirements.

Tax Compliance & Reporting Tax calculations, filing coordination, payment management, and compliance support for applicable Mexican tax obligations, including manufacturing and IMMEX operations.

VAT Administration & Recovery VAT diagnostics, CFDI reconciliation, balance monitoring, recovery applications, refund processing, and compliance verification support.

Audit & Internal Control Support Financial audit preparation, internal control reviews, and coordination with independent external audit specialists when required.

Cross-Border Payments & Currency Operations Coordination of international payments, currency exchange transactions, and operational FX processes to support efficient cross-border financial activity.

Financial Managed Services Financial partners to provide a multi-disciplinary and flexible approach to fiscal suppliers in Mexico.

Our BPO Solutions

Access fully trained and experienced staff without the cost of hiring full-time personnel.

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Accounts Payable & Receivable

Accounts Payable & Receivable Scalable support staff with adaptability and multiple systems and ERPs.

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Payroll Execution & Coordination

Payroll Execution & Coordination End-to-end administration, with experience in complex environments like manufacturing.

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Internal & External Audit

Internal & External Audit Preparation, strategy and implementation of compliance standards.

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Tax Reporting & VAT

Tax Reporting & VAT Tax compliance for manufacturing environments, specializing in IMMEX.

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Treasury & Bank Management

Treasury & Bank Management Optimize your talent pipeline with dual education programs and connectivity to local institutions.

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Bookkeeping & Transactions

Bookkeeping & Transactions Scalable accounting services for growing, international business in Mexico.

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VAT Reimbursement Management

VAT Reimbursement Management Reconstruction of systems and management VAT Refunds from the tax authorities.

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Cross-Border Payments

Cross-Border Payments Managing cross-border payments and currency exchanges to optimize costs and time.

PRODENSA INSIGHTS

Finance & Tax Advisory

As your business evolves, Prodensa can help you navigate more specialized financial needs by evaluating available alternatives and connecting you with appropriate financial institutions and professional service providers.

Operational Model Analysis From a deep financial perspective, the identification of the possible operational models from an international tax perspective.

Transfer Pricing Analysis Annual compliance for Mexican transfer pricing studies for transactions between related parties.

Financing & Credit

Credit lines, factoring, and financing alternatives.

Foreign Exchange Solutions

Currency exchange, hedging alternatives, and early-payment arrangements.

Investment & Treasury Solutions

Surplus investment alternatives, liquidity management, and financial planning support.

Leasing & Capitalization

Financial leasing, pure leasing, and sale-and-leaseback solutions.

Insurance, Bonds & Trusts

Analysis and coordination of appropriate financial protection and structuring alternatives.

Employee Financial Solutions

Payroll loans, savings and pension funds, and employee financial education.

Income Tax in Mexico is a federal tax payable at a flat 30% rate for corporations, like a direct tax on the profit obtained. Residents in Mexico, residents abroad with a permanent establishment in Mexico or sources of wealth in Mexico, are compelled to do monthly prepayments under certain business conditions to the Mexican SAT authority. Transfer pricing regulations in Mexico are ruled by the Income Tax Law and control transactions between related companies at local and international level. Maquila (IMMEX) operations are specifically ruled by the Safe Harbor methodology which is to determine the taxable profit out of the higher amount between 6.9% of the total value of assets and inventories or 6.5% of the total amount of cost and expenses of the operations must be considered.

Important notes to consider for the Income Tax:

Annual Income Tax reports need to be submitted to the SAT tax authority no later than March 31st
A positive balance of federal tax can be offset only against the same federal tax (in the second year of operation)
If the company has surplus Income Tax at the end of the year, they can request the surplus amount to SAT
If the company has Income Tax to pay at the end of the year they must pay this tax amount no later than March 31st

Safe Harbor

In order to determine the income tax base in the Safe Harbor calculation, the higher amount between 6.9% of the total value of the assets and inventories, or 6.5% of the total amount of costs and expenses of the operation must be considered.

First Methodology:

6.9% of the total value of the assets and inventories use in the maquila (IMMEX) operation during the fiscal year, including those owned by the person residing in the country, or residents abroad or any of its related parties, even when they have been granted in use or temporary enjoyment to said IMMEX.

Second Methodology:

6.5% of the total amount of operating costs and expenses of the operation in question, incurred by the person residing in the country, determined in accordance with the regulations of financial information, including those incurred by residents abroad, except for the following:

the value corresponding to the acquisition of merchandise, as well as of raw materials, semi-finished or finished products, used in the operation of IMMEX, carried out on their own account by residents abroad
The deduction of investments from fixed assets, expenses and deferred charges owned by the IMMEX company, destined to the IMMEX operation, will be calculated by applying the provisions of this law
The effects of inflation determined in the rules of financial information
Financial expenses should not be considered
Extraordinary or non-recurring expenses of the operation should not be considered in accordance with financial reporting standards

Value-Added tax is payable at a general rate of 16% on sales of goods and services, import of goods and lease payments. Some exemptions apply such as the sale of medicines, food products, and related, primary sector activities such as agriculture and livestock, sale of land, residential construction and rentals, medical services, salaries and wages.

Declarations must be done monthly, and taxpayers can apply for a credit on the VAT paid on purchases and expenses versus VAT collected from clients on sales. Refunds of VAT are available for companies showing higher credits than collections.

The VAT law also taxes sales in Mexico of temporarily imported goods by non-residents to

(a) other non-residents,
(b) maquiladoras, or
(c) companies in the automotive industry.

VAT is calculated for each calendar month as a final tax. Additionally, VAT overpayments may be used to offset the tax liabilities arising from other federal taxes.

Payroll Tax is a state fee that is paid when carrying out transactions in the company’s labor relations. For example, the payment of wages and salaries, amount paid for overtime, seniority bonuses, are considered remuneration for the payment of this tax.

It is declared monthly to the Finance Secretary of the corresponding state, and ranges from 2-3%. The application of the tax starts from the first payment made to the workers. It varies according to the state, as well as the laws that support it, which are found within the Financial Code of each of them.

Profit-Sharing is more like a benefit to workers than it is an additional tax.

Employers in Mexico are obligated to pay workers a share of the profits based on their annual tax declaration. The amount to be distributed among the workforce is 10% of the profits before income tax. It must be paid within 60 days of the annual declaration of taxes to the authorities.

Profit-sharing must be paid within 60 days after the payment or submission of the annual tax declaration even if there is an objection of the union or the employees. Also the employer has 10 labor days to deliver a copy of the annual tax declaration to the union or to the representative of the employees.

For profit-sharing calculation, the following are considered:

The number of days worked by each one during the year
Proportional wages paid during the year

The profit distribution of each employee will be capped to the highest average of the profit-sharing received by the employees in the past 3 fiscal years or 3 months of its regular salary.

Companies operating in their first year of operation can be exempt from profit-sharing. Directors, General Managers, and Administrators do not participate in profit-sharing of the company.

Property / Real Estate Tax in Mexico, the acquisition is between 2-4% of assessed value of the property at the moment of the purchase. Then it will be paid annually and is calculated at a fraction of the value of the property.

A cadastral appraisal has to be performed, which is a calculation that takes into account characteristics of a property, such as the unit values of the land and construction, multiplies them by the surface of the land, and the result determines the cadastral value, which is used to determine the amount of taxes that a person must pay for owning the property. The predial fee may vary according the location of the property.

These values are compared with a maximum and minimum range of the property price. Based on this result, and on the result of the cadastral appraisal, the value of the taxes that the owner of the property must pay is determined. This payment normally has to be performed in January and the municipalities may offer incentives or discounts for early payments, for example 20% discount of the fee.

MANUFACTURING

Taxes in Mexico

INCOME TAX

Income Tax in Mexico is a federal tax payable at a flat 30% rate for corporations, like a direct tax on the profit obtained. Residents in Mexico, residents abroad with a permanent establishment in Mexico or sources of wealth in Mexico, are compelled to do monthly prepayments under certain business conditions to the Mexican SAT authority. Transfer pricing regulations in Mexico are ruled by the Income Tax Law and control transactions between related companies at local and international level. Maquila (IMMEX) operations are specifically ruled by the Safe Harbor methodology which is to determine the taxable profit out of the higher amount between 6.9% of the total value of assets and

inventories or 6.5% of the total amount of cost and expenses of the operations must be considered.

PERMANENT ESTABLISHMENT – (PE)

Any foreign resident, person or company, that is generating wealth through operations in Mexico, by itself or through others must tribute ISR upon the generated wealth that is attributed to the Operation in Mexico. The 2020 tax reform in Mexico nsolidifies the requirement for all foreign residents to obtain a tax ID in Mexico, even despite previous exemptions for Shelter service providers.

The primary exemptions of VAT:

the sale of land transactions
credit instruments
residential construction
interest paid by banks
medical services
education
salary and wages
rentals of residential property
the sale of non-amortisable certificates on real estate investment trusts (REITs).

The VAT law also taxes sales in Mexico of temporarily imported goods by non-residents to (a) other non-residents, (b) maquiladoras, or (c) companies in the automotive industry.

VAT paid by companies on their purchases and expenses related to VAT-added activities may usually be credited against their liability for VAT they collect from customers on their own sales, services rendered, etc. VAT is calculated for each calendar month as a final tax. Additionally, VAT overpayments may be used to offset the tax liabilities arising from other federal taxes.

PROFIT-SHARING

Profit-Sharing is more like a benefit to workers than it is an additional tax.

For profit-sharing calculation, the following are considered:

The number of days worked by each one during the year
Proportional wages paid during the year

The profit distribution of each employee will be capped to the highest average of the profit-sharing received by the employees in the past 3 fiscal years or 3 months of its regular salary.

Companies operating in their first year of operation can be exempt from profit-sharing. Directors, General Managers, and Administrators do not participate in profit-sharing of the company.

PROPERTY / REAL ESTATE

Municipalities use the predial collections to improve or change some aspects of the city or the municipality.

How is the property tax calculated?

To calculate the property tax, the authorities take into account the following values:

Location of the property
Land value
Construction value
Property type
Property characteristics (number of floors, age, state of materials)
The land’s surface
Construction surface

MANUFACTURING

Taxes in Mexico

INCOME TAX

The INCOME TAX in Mexico is a federal tax payable at a flat 30% rate for corporations, like a direct tax on the profit obtained. Residents in Mexico, residents abroad with a permanent establishment in Mexico or sources of wealth in Mexico, are compelled to do monthly prepayments under certain business conditions to the Mexican SAT authority. Transfer pricing regulations in Mexico are ruled by the Income Tax Law and control transactions between related companies at local and international level. Maquila operations are specifically ruled by the Safe Harbor methodology which is to determine the taxable profit out of the higher amount between 6.9% of the total value of assets and inventories or 6.5% of the total amount of cost and expenses of the operations must be considered.

PERMANENT ESTABLISHMENT – (PE) Any foreign resident, person or company, that is generating wealth through operations in Mexico, by itself or through others must tribute ISR upon the generated wealth that is attributed to the Operation in Mexico. The 2020 tax reform in Mexico nsolidifies the requirement for all foreign residents to obtain a tax ID in Mexico, even despite previous exemptions for Shelter service providers.

VALUE-ADDED TAX

The VALUE-ADDED tax is payable at a general rate of 16% on sales of goods and services, import of goods and lease payments. Some exemptions apply such as the sale of medicines, food products, and related, primary sector activities such as agriculture and livestock, sale of land, residential construction and rentals, medical services, salaries and wages.

VAT must be withheld in the following cases:

Commissions paid to individuals
Services provided by individuals
Tangible goods leased by individuals
Ground transportations of goods services (4% retention rate)
Outsourcing services (6% retention rate)
Waste purchases to be used in your industrial activity or for sales
Purchases to residents abroad without permanent establishment in the country

PAYROLL TAX

Mexico's PAYROLL TAX is a state fee that is paid when carrying out transactions in the company’s labor relations. For example, the payment of wages and salaries, amount paid for overtime, seniority bonuses, are considered remuneration for the payment of this tax.

For the payroll tax calculation, the following premiums are declared:

Monthly, biweekly or weekly wages and salaries
Overtime work
Awards, bonuses, and incentives given to employees
Commissions
Compensations
Seniority premiums
Employer participation in savings fund
Payments made to administrators, managers or other workers of the company

PROFIT-SHARING

PROFIT-SHARING Employers in Mexico are obligated to pay workers a share of the profits based on their annual tax declaration. The amount to be distributed among the workforce is 10% of the profits before income tax. It must be paid within 60 days of the annual declaration of taxes to the authorities.

For profit-sharing calculation, the following are considered:

The number of days worked by each one during the year
Proportional wages paid during the year

The profit distribution of each employee will be capped to the highest average of the profit-sharing received by the employees in the past 3 fiscal years or 3 months of its regular salary.

Companies operating in their first year of operation can be exempt from profit-sharing. Directors, General Managers, and Administrators do not participate in profit-sharing of the company.

INTEREST, ROYALTIES, ETC.

Interests, Royalties and Technical Assistance Fees interests paid to a resident abroad with permanent establishment in Mexico are subject to a withholding tax rate of 4.9% to 35%. Royalties paid to a resident abroad are subject to a withholding tax of 35% and the rate may be reduced with a tax treaty. Technical Assistance paid fees are subject to a 25% withholding tax, unless the tax is reduced with a treaty.

PROPERTY / REAL ESTATE TAX

The PROPERTY / REAL ESTATE TAX in Mexico, the acquisition is between 2-4% of assessed value of the property at the moment of the purchase. Then it will be paid annually and is calculated at a fraction of the value of the property.

How is the property tax calculated?

To calculate the property tax, the authorities take into account the following values:

Location of the property
Land value
Construction value
Property type
Property characteristics (number of floors, age, state of materials)
The land’s surface
Construction surface

Municipalities use the predial collections to improve or change some aspects of the city or the municipality.

OUR SERVICES

Our shared resource structure allows you to access fully trained and experienced staff without the cost of hiring full-time personnel.

Bookkeeping & Transaction Registration

Accounts Payable & Receivable

Payroll Execution & Coordination

Internal & External Audit

Tax Reporting & VAT Administration

Treasury & Bank Management

Income Tax in Mexico is a federal tax payable at a flat 30% rate for corporations, like a direct tax on the profit obtained. Residents in Mexico, residents abroad with a permanent establishment in Mexico or sources of wealth in Mexico, are compelled to do monthly prepayments under certain business conditions to the Mexican SAT authority. Transfer pricing regulations in Mexico are ruled by the Income Tax Law and control transactions between related companies at local and international level. Maquila operations are specifically ruled by the Safe Harbor methodology which is to determine the taxable profit out of the higher amount between 6.9% of the total value of assets and inventories or 6.5% of the total amount of cost and expenses of the operations must be considered.

PERMANENT ESTABLISHMENT – (PE)

VAT must be withheld in the following cases:

Commissions paid to individuals
Services provided by individuals
Tangible goods leased by individuals
Ground transportations of goods services (4% retention rate)
Outsourcing services (6% retention rate)
Waste purchases to be used in your industrial activity or for sales
Purchases to residents abroad without permanent establishment in the country

For the payroll tax calculation, the following premiums are declared:

Monthly, biweekly or weekly wages and salaries
Overtime work
Awards, bonuses, and incentives given to employees
Commissions
Compensations
Seniority premiums
Employer participation in savings fund
Payments made to administrators, managers or other workers of the company

Profit-Sharing Employers in Mexico are obligated to pay workers a share of the profits based on their annual tax declaration. The amount to be distributed among the workforce is 10% of the profits before income tax. It must be paid within 60 days of the annual declaration of taxes to the authorities.

For profit-sharing calculation, the following are considered:

The number of days worked by each one during the year
Proportional wages paid during the year

The profit distribution of each employee will be capped to the highest average of the profit-sharing received by the employees in the past 3 fiscal years or 3 months of its regular salary.

Companies operating in their first year of operation can be exempt from profit-sharing. Directors, General Managers, and Administrators do not participate in profit-sharing of the company.

Interests, Royalties and Technical Assistance Fees interests paid to a resident abroad with permanent establishment in Mexico are subject to a withholding tax rate of 4.9% to 35%. Royalties paid to a resident abroad are subject to a withholding tax of 35% and the rate may be reduced with a tax treaty. Technical Assistance paid fees are subject to a 25% withholding tax, unless the tax is reduced with a treaty.

How is the property tax calculated?

To calculate the property tax, the authorities take into account the following values:

Location of the property
Land value
Construction value
Property type
Property characteristics (number of floors, age, state of materials)
The land’s surface
Construction surface

Municipalities use the predial collections to improve or change some aspects of the city or the municipality.

Ebook Gated

The Mexico Tax Guide

Focused on cross-border manufacturing operations.

Download

Ebook Gated

The Mexico Payroll Guide

For attracting and retaining top talent in Mexico.

Download

Guide Free

The Safe Harbor Calculation

Paying income tax in Mexico's IMMEX Program.

Read It

Guide Free

The VAT Reimbursement Handbook

How cross-border manufacturers manage VAT.

Read It

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Ebook Gated

The IMMEX eBook

A deep dive into manufacturing-for-export.

Download

Guide Free

Permanent Establishment in Mexico

The rules and what to watch out for.

Read It

FINANCE, TAX & TREASURY SERVICES IN MEXICO

Our BPO Solutions

Our BPO Solutions

Finance & Tax Advisory

Taxes in Mexico

INCOME TAX

PERMANENT ESTABLISHMENT – (PE)

WANT TO KNOW MORE ABOUT THE IMMEX PROGRAM IN MEXICO?

Safe Harbor

VALUE-ADDED TAX

What is VAT Certification?

PAYROLL TAX

PROFIT-SHARING

WANT TO KNOW MORE ABOUT EMPLOYMENT COSTS IN MEXICO?

MISCELLANEOUS

PROPERTY / REAL ESTATE TAX

VALUE-ADDED TAX

PAYROLL TAX

Taxes in Mexico

INCOME TAX

PAYROLL TAX

PROFIT-SHARING

PROPERTY / REAL ESTATE

Taxes in Mexico

INCOME TAX

VALUE-ADDED TAX

PAYROLL TAX

PROFIT-SHARING

INTEREST, ROYALTIES, ETC.

PROPERTY / REAL ESTATE TAX

OUR SERVICES

Taxes in Mexico

ROYALTIES

Why Prodensa?

EXPERTS IN MEXICO

OUR INSIGNIA SOLUTION

DOING BUSINESS IN MEXICO

Resource Library

The Mexico Tax Guide

The Mexico Payroll Guide

The Safe Harbor Calculation

The VAT Reimbursement Handbook

The IMMEX eBook

Permanent Establishment in Mexico

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