Taxes in Mexico

Taxes in Mexico are collected by federal, state, and local authorities. The exact duty depends on the person's income, work, business activity, property, and transactions. The SAT, or Servicio de Administración Tributaria, manages many federal tax matters. The RFC, or Registro Federal de Contribuyentes, is a taxpayer identification record used in formal work, invoicing, declarations, and other procedures. ISR is the income tax applied to taxable income under the relevant rules. Employees may have tax withheld through payroll, while independent workers and businesses may need to issue invoices, keep records, and handle their own filings. IVA is a value-added tax that commonly appears in the price of taxable goods and services. A seller may collect it, while the final economic burden can depend on the transaction and applicable rules. A factura electrónica is a digital tax invoice known as a CFDI. It records a formal transaction and may be important for business accounting, deductions, reimbursements, or proof of purchase. Mexico has different tax regimes and obligations for employees, professionals, businesses, landlords, and other taxpayers. The same payment can have different treatment depending on who receives it and why it was made. Good tax administration means separating personal and business money, keeping invoices and receipts, recording income and expenses, and checking official notices. Missing a duty can create interest, penalties, blocked procedures, or problems proving a transaction. When a situation is complex, use a qualified Mexican tax professional or an official SAT help channel. Do not invent deductions, use another person's RFC, issue false invoices, or assume that a tax duty disappears because income was paid in cash.