Mexico introduced a Value Added Tax regime in 1980. Locally, it is known as Impuesto al valor agregado (IVA). It is administered by the Ministry of Public Finance and Credit.
Mexican VAT rates
Mexico has a range of VAT rates, including:
- Standard VAT rate: 16%
- Borders Reduced VAT rate of 11% was dropped in 2014
- Zero Rated Supplies: foodstuffs; water; agricultural supplies; books and magazines
- VAT Exempt Supplies: immovable property, land, financial services, insurance, cultural exhibitions and events, imports
Should I register for Mexican VAT
Businesses which supply taxable services or goods must register for Mexican VAT. This includes foreign companies with a permanent establishment. Foreign companies without a permanent establishment may not register as a non-resident trader, and cannot reclaim Mexican VAT.
|Rate||Type||Which goods or services|
|16%||Standard||All other taxable goods and services|
|0%||Zero||Exports; certain basic foodstuffs such as milk, wheat, meat and corn; medicine; some agricultural services|
Mexican VAT returns
VAT returns, detailing sales and purchases, must be submitted on a monthly basis. The should be filed by the 17th of the month following the period end, and any tax due paid by this date too. Returns are filed electronically only.
VAT credits may be rolled over into future months, but may also be credited back.
Annual returns are also due. In addition, monthly purchase listings must be submitted (Declaración Informativa de Operaciones con terceros.
Mexican Invoice Requirements
Like a number of countries in South America, Mexican businesses are required to issue invoices on officially produced and endorsed invoices. Although since 2011, electronic invoices may be used for larger businesses, and special digital certificates must be obtained. When issuing invoices, companies must include the following information on any invoice:
- Name, address and tax ID number of the supplier
- Date and place of issue
- Description (including quantises) of products or services
- Customer details
- Detailer of customer documentation for imports
- Pricing and VAT details
- Central Bank of Mexico exchange rate if in a foreign currency
Credit notes, to revert claimed VAT, must contain all of the same information.