For Mexicans

How tax residency works

Under article 9 of the Federal Tax Code (Código Fiscal de la Federación), you are a Mexican tax resident if you have established your home (casa habitación) in Mexico. If you also have a home in another country, you are resident in Mexico when your centre of vital interests (centro de intereses vitales) is there.

Your centre of vital interests is in Mexico, among other cases, when more than 50% of your income in the calendar year comes from Mexican sources, or when Mexico is the main centre of your professional activities. Mexican nationals are presumed resident unless they prove otherwise, so the burden of showing you have left falls on you.

Residents pay tax on worldwide income to the SAT (Servicio de Administración Tributaria, the federal tax authority). Non residents pay only on Mexican source income, usually through withholding at source.

• A home in Mexico, owned or rented, that remains available to you.
• More than half of your income in the year coming from Mexican sources.
• Mexico as the main base of your work or business.
• Being a Mexican national who works for the Mexican state, which keeps you resident even with your vital interests abroad.

Leaving properly

The law sets a formal step. If you stop being resident, you must file a notice of change of tax residence (aviso de cambio de residencia fiscal) with the SAT at the latest within the 15 days before the change. If you do not file it, you remain a Mexican tax resident, whatever your actual circumstances.

Since 2022 a second rule applies to everyone, not only Mexican nationals. If you do not prove your new tax residence, or your new country taxes your income under a preferential tax regime, you stay resident in Mexico for the year of the notice and the following five years. A preferential regime (régimen fiscal preferente, often called REFIPRE) is one where your income is untaxed or taxed at less than 75% of the Mexican income tax.

The rule does not apply if the new country has a broad tax information exchange agreement with Mexico and also a treaty for mutual assistance in notifying and collecting taxes. This matters for territorial and zero tax countries, where foreign income is untaxed. Whether a destination meets the exception depends on the agreements in force with Mexico and any reservations made under them, so our team confirms the position for your destination before you file.

1. 01

   Settle your home

   Sell your home in Mexico or lease it to a third party, and set up a genuine home in your new country.

2. 02

   Move your income base

   Arrange your work and business so that most of your income and your main professional activity are no longer in Mexico.

3. 03

   Get proof of your new residence

   Obtain your residence permit and, where available, a tax residence certificate from your new country, because you must prove your new tax residence.

4. 04

   File the notice on time

   File the aviso with the SAT within the 15 days before your change of residence, usually through the SAT portal with your e.firma (the SAT’s advanced electronic signature). Keep the acknowledgement.

5. 05

   Close out the resident period

   Your accountant files any annual return due for the period you were resident and confirms your status in the RFC (Registro Federal de Contribuyentes, the federal taxpayer register). From then on, Mexican payers withhold tax as for a non resident.

Exit tax, property and investments

Mexico has no general exit tax for individuals: moving abroad does not trigger a deemed sale of your assets. What changes is how your Mexican income is taxed afterwards.

Residents can sell their casa habitación free of income tax up to 700,000 UDIs (investment units, an inflation indexed unit; approx. MXN 6 million) when the sale is formalised before a notary. Non residents cannot use this exemption: they pay 25% of the gross price, or can opt for 35% of the gain when the sale is made in a public deed. If you plan to sell, the timing relative to your change of residence matters.

As a non resident, rent from Mexican property is taxed at 25% of the gross amount with no deductions, and dividends from a Mexican company carry an extra 10% withholding unless a treaty lowers it. Wages, interest and other Mexican income have their own non resident rates.

While you remain a Mexican resident, the REFIPRE rules also reach income earned through foreign companies, trusts and arrangements in low tax jurisdictions. You can be taxed on that income as it arises, even if nothing is distributed, and you must file an information return each February. Setting up a company abroad before your residence has actually changed does not take that income out of Mexican tax.

Pensions and social security

Your Afore account (Administradora de Fondos para el Retiro, your individual retirement savings account) stays in your name when you move abroad and keeps earning returns. You generally cannot cash it out simply because you leave. At retirement age you claim a pension through IMSS (Instituto Mexicano del Seguro Social, the social security institute), or, if you lack the required weeks of contributions, a refusal of pension (negativa de pensión) lets you withdraw the balance from age 60.

People who first registered with IMSS before July 1997 fall under the 1973 law (Ley 73) and may be able to keep building their pension through voluntary continuation (Modalidad 40), if they meet its conditions. Mexico has social security agreements with Canada and Spain, which can combine contribution periods in those countries.

IMSS medical coverage depends on active contributions and on care delivered in Mexico, so arrange private international health insurance for your new home before you go.

Dual nationality

Mexico allows dual nationality. Under article 37 of the Constitution, no Mexican by birth can be deprived of their nationality, so taking a second citizenship has no effect on it.

Two points to know. Mexicans who hold another nationality must enter and leave Mexico as Mexicans, on a Mexican passport. And Mexicans by naturalisation are treated differently: they can lose Mexican nationality by voluntarily acquiring another one.

Children born abroad to a Mexican parent are Mexican by birth and can be registered at a Mexican consulate.