Withholding tax in Mexico 2026

Mexico's default border rate is 25% on gross income — services, rents, property sales, most royalties — with elections to pay 35% on the net where a Mexican representative or notary formalizes the deal.

Interest is a ladder: 4.9% for publicly traded and treaty-bank paper, 10%, 15%, 21%, 35% — and 40% for related parties in preferential regimes.

At a glance

top rate: 40% (related-party payments to preferential regimes)
entry band: 0% on the first MXN 125,900 of non-resident salaries
tax year basis: Withheld when paid; self-remitted within 15 days when the payer is foreign
filing deadline: Final withholdings need no return
residency basis: Mexican-source payments to non-residents
regime flag: Bond-interest decree: 100% credit for treaty-country bondholders

Rates

Withholding on non-residents (2026)

Rate	Base	Applies to
0% / 15% / 30%	Annual salary bands (0 to 125,900 / to 1,000,000 / above)	Employment performed in Mexico — 183-day exemption for foreign-paid staff
25%	Gross	Professional services, rents, and property or share sales (electable 35% on net with a representative)
10%	Gross	Dividends — final, treaty-reducible
4.9% – 35%	Gross	Interest by type: 4.9% listed/treaty-bank securities, 10% non-treaty listed, 15% reinsurers, 21% bank and supplier credit, 35% other
5% / 25% / 35%	Gross	Royalties: railcars 5%, technical assistance 25%, patents and trademarks 35% (40% to preferential-regime related parties)
10%	Net gain	Stock-exchange share sales — same flat rate as residents

Thresholds & allowances

Salary exemptionMXN 125,900 a year
Non-residents' first slice of Mexican employment income is tax-free; 15% to MXN 1 million, 30% above
183-day ruleExempt
Pay from a foreign employer without a Mexican establishment escapes tax below 183 days of presence in 12 months

Residency

Residency trigger

Mexican payers withhold at source; when both parties are foreign, the recipient must self-remit within 15 days of receiving Mexican-source income.

Non-resident treatment

Treaty rates prevail; no deductions of any kind apply to gross-basis withholding, which is why the net elections (35%) matter for property.

Notes

A standing decree credits 100% of the withholding on bond interest paid to residents of treaty or information-exchange countries — effectively 0% on qualifying corporate bonds.
Pension income of non-residents uses the same 0/15/30% salary bands.
Equalization tax at company level covers dividends paid from profits that never bore corporate tax.

FAQ

What does Mexico withhold on payments abroad?

Generally 25% on gross income (services, rents, sales), 10% on dividends, 4.9–35% on interest by type and 5–35% on royalties — treaties routinely cut these.

How are non-resident property sellers taxed?

25% of the gross price withheld — or an election to pay 35% on the actual net gain when the sale is notarized and a Mexican representative is appointed.

Figures: tax year 2026, compiled from public sources. Not tax advice.

See withholding tax in other countries

Full ranking →