Resident individuals are subject to Mexican income tax on their worldwide income, regardless of their nationality. Non-residents, including Mexican citizens who can prove residence for tax purposes in a foreign country, are taxed only on their Mexican source income. The Federal Tax Code provides that a foreign individual will be considered a resident of Mexico for tax purposes when he has established his home in Mexico, unless he has been physically present in a foreign country for more than 183 days, consecutive or not, in one calendar year, and is able to prove residence for tax purposes in that other country.
Residents are required to include investment income in their annual returns, except for: (a) interest from the Mexican banking system and government obligations, which is either subject to a final withholding tax of 20% on gross interest (or a portion thereof) or is exempt; (b) dividend income from Mexican corporations or investment funds; and (c) capital gains on transactions carried out through the Mexican stock exchange, which are exempt.
Residents of Mexico are taxed on their worldwide capital gains, whereas non-residents are only subject to Mexican tax on gains arising from sales of real property located in Mexico or non-exempt sales of shares of Mexican companies, regardless of where the sale takes place.
U.S. expatriate residing abroad still owe U.S. taxes each year on their worldwide income. If you are an American living in Mexico, there are many different forums that discuss the best way to handle taxes and tax law in Mexico. one of the best is http://www.taxmeless.com/MEXICO.htm.
Sales tax in Mexico is known as IVA (Impuesto al Valor Agregado). Mexico has two sales tax rates: 10% in the border zones and 15% everywhere else. The current rate of sales tax on all goods and services classed for the application of IVA is 15% unless the transaction takes place inside the 'border zone' in which case the lower rate of 10% will apply.
Starting this month, foreign shoppers can get a refund on Mexico's 15 percent VAT (value added tax). Claim your refund by picking up a form at a VAT booth at one of the following airports: Cancún, Guadalajara, Los Cabos, Mexico City, and Puerto Vallarta. At Mexico City's main airport, for instance, there are currently nine booths. The program is still fairly new, but here are some of the details:
If you need help with taxes, Mexico City offers plenty of tax professionals:
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