Mexico's taxes at a glance
Structure used: Resident self-employed professional under RESICO (LISR article 113-E), billing foreign clients: 1% to 2.5% of gross monthly income with no deductions, up to MXN 3,500,000 a year. Above the ceiling ($250k profile), the general business and professional regime at the progressive rates up to 35% on profit. Bands are the effective tax on profit for a remote worker using this structure, with clients abroad and costs of 15% of revenue.
Mexico tax residency: the home test, not a day count
Under the Federal Tax Code you are a Mexican tax resident once you establish a home in Mexico. If you also keep a home in another country, you are resident when your center of vital interests is in Mexico: more than 50% of your income in the calendar year comes from Mexican sources, or Mexico is the main place of your professional activities.
There is no 183-day rule for residents. A long lease in Mexico City can make you resident in your first month, and staying under half the year does not undo it if the apartment is your home. The 183-day count in Mexican law belongs to non-residents: salaries for work done in Mexico become taxable once the stay passes 183 days in a floating 12-month period.
Your migration status does not decide tax residence either. Temporary and permanent residence cards let you live in Mexico, but none of them is a tax test; in every case the home and vital-interests test is what the tax authority, the SAT, applies.
Moving to Mexico as a freelancer: the version that holds up
Works
You take a year's lease in Oaxaca, accept that it makes you resident, register with the SAT, and put your freelance income for foreign clients into RESICO at 1% to 2.5% of gross income, paying monthly by the 17th. Before you leave, you file the notice that ends your residence.
Fails
You keep a long-term apartment in Mexico City, spend 150 days a year there and the rest traveling, and file nothing because you never passed 183 days. The apartment is a home, so you are likely resident and taxable on worldwide income at up to 35%, and without registering you have no RESICO to fall back on.
Mexico income tax rates for 2026
A self-employed resident outside RESICO pays the general progressive rates on profit, after deducting business costs. The 2026 annual scale runs from 1.92% on the first MXN 10,135.11 (about $571) to 35% above MXN 5,107,703.92 (about $288,000).
Mexico annual income tax for resident individuals, 2026 (general regime)
| Taxable income from (MXN) | About (USD) | Tax on the lower limit (MXN) | Rate on the excess |
|---|---|---|---|
| 0.01 | $0 | 0 | 1.92% |
| 10,135.12 | $570 | 194.59 | 6.40% |
| 86,022.12 | $4,840 | 5,051.36 | 10.88% |
| 151,176.20 | $8,510 | 12,140.13 | 16.00% |
| 175,735.67 | $9,890 | 16,069.64 | 17.92% |
| 210,403.70 | $11,840 | 22,282.15 | 21.36% |
| 424,353.98 | $23,890 | 67,981.93 | 23.52% |
| 668,840.15 | $37,650 | 125,485.08 | 30.00% |
| 1,276,925.99 | $71,880 | 307,910.83 | 32.00% |
| 1,702,567.98 | $95,840 | 444,116.27 | 34.00% |
| 5,107,703.93 | $287,510 | 1,601,862.49 | 35.00% |
RESICO: 1% to 2.5% of gross income
RESICO, the Simplified Trust Regime, replaces that scale for residents with business, professional or rental income, including those who also earn a salary or interest, whose combined income last year was MXN 3,500,000 (about $197,000) or less, under article 113-E of the income tax law. You pay each month on the income you collected and invoiced with digital tax receipts (CFDI), before VAT and with no deductions at all, by the 17th of the following month.
RESICO monthly rates for individuals (the rate applies to the whole month's income)
| Income collected in the month (MXN) | About (USD) | Rate on all of it |
|---|---|---|
| Up to 25,000 | Up to $1,410 | 1.0% |
| 25,000 to 50,000 | $1,410 to $2,810 | 1.1% |
| 50,000 to 83,333.33 | $2,810 to $4,690 | 1.5% |
| 83,333.33 to 208,333.33 | $4,690 to $11,730 | 2.0% |
| 208,333.33 to 3,500,000 | $11,730 to $197,010 | 2.5% |
RESICO stays open to you only while 3 rules hold. Partners, shareholders and members of legal entities are excluded, and article 113-E draws no line between Mexican and foreign entities. Income above MXN 3,500,000 (about $197,000) in the year moves you to the general rates from the following month. And people with income under preferential tax regimes cannot use it.
| Revenue | MXN 1,776,520 ($100,000) |
|---|---|
| Average monthly incomein the 2% RESICO band | MXN 148,043 |
| RESICO at 2% of gross income2.35% of a profit of MXN 1,510,042 | MXN 35,530 (about $2,000) |
| General regime: profit after 15% costs | MXN 1,510,042 ($85,000) |
| Tax on the first MXN 1,276,925.98 | MXN 307,911 |
| 32% on the remaining MXN 233,116 | MXN 74,597 |
| General regime income tax25.3% of profit | MXN 382,508 (about $21,500) |
Exchange rate $1 = MXN 17.7652 (ECB reference rates of September 28, 2026). RESICO rates from LISR article 113-E; general rates from the 2026 annual table. Assumes income spread evenly across the year. VAT is not included, and no IMSS social security is due, because article 13(I) of the Social Security Law makes it voluntary for independent workers.
Foreign income and remote work in Mexico
Once you are resident, where the work happens stops mattering: Mexico taxes residents on worldwide income from the start of residence, whatever their nationality, with no relief for newcomers. Fees from foreign clients are simply business income, which is what lets them into RESICO.
Investment income has no such shortcut. Dividends paid by foreign companies are taxable in the annual return at the progressive rates, and article 142, section V of the income tax law adds a separate final tax of 10% on the dividend the foreign company actually pays, due by the 17th of the following month. RESICO does not cover dividends or interest, only business, professional and rental income. RESICO is why Mexico sits among the low-tax countries for remote workers on freelance income, while a portfolio investor there faces the full scale.
David's note
I would register for RESICO before the first invoice and keep the business in my own name for as long as I stay under the ceiling. The regime's value is that it taxes gross income at a flat low rate, and the quickest way to lose it is to put the same work through a company, which excludes you as a shareholder.
Filing a tax return in Mexico
The general annual return is filed in April: the SAT's notice on the 2025 annual return set the window from April 1 to April 30, 2026. The same SAT notice says people taxed under RESICO can be relieved of the annual return, since their monthly payments carry the tax, while salaried people must file once salary income passes MXN 400,000 (about $22,500).
Registering and filing as a freelancer in Mexico
- Treat the day you set up a home in Mexico as the day you become tax resident, whatever your visa.
- Register with the SAT and choose RESICO if your income last year was MXN 3,500,000 (about $197,000) or less and you hold no stake in a company.
- Issue a CFDI digital invoice for every fee, including fees from foreign clients.
- Pay RESICO tax by the 17th of each following month on the income collected that month.
- Watch the running total: above MXN 3,500,000 (about $197,000) in a year you move to the general rates from the next month.
- Outside RESICO, file the annual return in April and report foreign dividends and interest in it.
- Before you leave Mexico, file the notice ending tax residence in the 15 days before the change.
Ways to move to Mexico
Special tax regimes in Mexico
Simplified Trust Regime (RESICO) for individuals
Resident individuals with business, professional or rental income, including those who also earn a salary or interest, whose combined income for the previous year was MXN 3,500,000 (about $197,000) or less can pay income tax at 1% to 2.5% on the gross business, professional or rental income. No expenses are deducted, and salary and interest are still taxed under their own rules. The rate for each month is set by that month's invoiced income collected.
Open to new applicants. Source: wwwmat.sat.gob.mx, checked September 29, 2026
Running your own company from Mexico
A company is the most expensive way to run a small freelance business from Mexico, because owning one closes RESICO. Article 113-E excludes partners, shareholders and members of legal entities, so a freelancer who moves the work into a company, Mexican or foreign, gives up 1% to 2.5% of gross income and falls back to the general rates on everything else they earn.
Foreign companies also meet Mexico's anti-deferral rules. Residents must report income earned through investments in preferential tax regimes, meaning low-tax jurisdictions, in proportion to their ownership even when nothing is distributed.
How each structure is taxed for a resident of Mexico
| Structure | Fees from foreign clients | Foreign dividends and interest | Effect on RESICO |
|---|---|---|---|
| You, under RESICO | 1% to 2.5% of gross income | Progressive rates in the annual return, plus 10% on foreign dividends | Available up to MXN 3,500,000 a year |
| You, general regime | 1.92% to 35% on profit | Progressive rates in the annual return, plus 10% on foreign dividends | Not used |
| Company you own, Mexican or foreign | Taxed in the company, then as dividends | Low-tax income attributed to you | Closed to you as a shareholder |
Above the RESICO ceiling the comparison changes, and a company can make sense on its own terms. Below it, keeping the business in your own name is almost always cheaper.
US citizens living in Mexico
The US and Mexico have an income tax treaty in force, but a US citizen still files a US return on worldwide income. Under RESICO, Mexican tax is small, so the foreign earned income exclusion does most of the work, up to $132,900 for 2026; under the general rates, a credit for Mexican tax paid can do more.
The US and Mexico signed a totalization agreement in 2004, but it is not among the agreements in force, so self-employment tax of 15.3% still applies to all net profit even when the exclusion is claimed.
Mexico tax mistakes: the 183-day myth and the shareholder trap
Staying under 183 days does not keep you out of Mexican tax
The expensive version is a remote worker with a long lease in Mexico City who counts days, stays under 183 and files nothing. Residence follows the home, so a resident's worldwide income is taxable at up to 35% from the first month, and RESICO's 1% to 2.5% is an option you take up by registering for it, not a rate applied to years you never declared.
Leaving has its own paperwork. A resident who moves away has to file a notice of suspension of activities for termination of tax residence in the 15 days before the change, and a person who omits it does not lose Mexican residence.
The shareholder trap catches people who set up a company for liability or banking and keep invoicing personally under RESICO. Holding the stake is enough to exclude you, and leaving RESICO for breaking its rules is permanent.
Who Mexico suits, and who it does not
Good fit
- Freelancers and consultants billing foreign clients under MXN 3,500,000 (about $197,000) a year, who can pay 1% to 2.5% of gross income under RESICO.
- People who want long-term residence without a digital nomad visa and can show about MXN 79,800 (about $4,490) a month of income.
Poor fit
- Anyone earning above MXN 3,500,000 (about $197,000) a year: the general regime taxes profit at up to 35%.
- Founders who hold their business through a company: partners and shareholders of legal entities cannot use RESICO.
- Investors with foreign portfolios: foreign dividends and interest are taxed at up to 35%, and income in low-tax jurisdictions is attributed.
Recent tax and visa changes in Mexico
The UMA rose to MXN 117.31 a day, which lifts every visa income and savings threshold expressed in UMA days. kpmg.com
New general visa guidelines (DOF) set the solvency thresholds for temporary and permanent residence in UMA days: 680 days a month of income or 11,460 days of savings for temporary residence. consulmex.sre.gob.mx
