Mexican Income Tax Law
Mexico taxes income---including employment income, income from investments and capital gains---at the federal and state levels but provides for several deductions.
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Earned Income
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Earned income includes income from salaries, commissions and employee-derived benefits allowances for housing, living expenses, education and employee profit sharing. Taxes for these are calculated at a graduated rate, starting at 3 percent and reaching 28 percent of total income for top earners. Many states levy taxes on salaried income but not other income.
Investment Income
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With some exceptions, investment returns are included in personal income for taxation purposes. Capital gains, domestic interest and dividend income are assessed at a graduated scale of rates, reaching 35 percent depending on an individual's total income.
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Deductions
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Federal tax provisions allow for deductions that include minimum wage salaries, dental and medical expenses, funeral expenses and charitable donations.
Residency Requirements
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Non-Mexicans are considered residents of Mexico---and, therefore, subject to standard Mexican income taxes---if they physically reside in Mexico 183 days or more in a given calendar year.
Corporate Income
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Businesses are assessed a corporate income tax at a maximum rate of 35 percent.
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References
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