Taxation in Mexico.

For individuals, those whose home is located in Mexican territory are tax residents in Mexico. If they have a home in Mexico and in another country, they are considered tax residents in Mexico if their "centre of vital interests" is in Mexican territory (more than 50% of income comes from a Mexican source, or when the main centre of their professional activities is in Mexico).

For legal entities, tax residents in Mexico are those incorporated under Mexican law or those whose main administration or place of effective management is in Mexican territory.

The RFC (Federal Taxpayer Registry) is the unique tax identifier in Mexico. It is mandatory for any individual or legal entity carrying out taxable transactions or subject to tax obligations in Mexico.

For foreigners without residence in Mexico but with taxable operations (rentals, sales, provision of services), the RFC is applied for through a specific procedure with the SAT, in person at a local administration or via a legal representative.

For foreign companies with a stable operational presence in Mexico, the RFC is linked to the permanent establishment and entails full tax obligations.

The CFDI (Digital Tax Receipt via Internet) is the mandatory e-invoicing system in Mexico. Every taxable transaction must be supported by a CFDI issued through a PAC (Authorised Certification Provider) and validated by the SAT.

For foreign companies: if they have a Mexican RFC and issue in Mexico, they must use CFDI. If they only import into Mexico (without a Mexican presence), they do not issue CFDI; the Mexican importer handles it on their side.

For clients with a subsidiary or branch in Mexico, we take care of CFDI issuance, validation and compliance as part of our bookkeeping services.

IMMEX (Manufacturing, Maquiladora and Export Services Industry) allows a company established in Mexico to temporarily import goods (raw materials, components, machinery) without paying VAT or tariffs, provided that those goods are used to produce goods or services destined for export.

Modalities: industrial (manufacturing), shelter (operation under a third party's umbrella), services (export services), holding.

Main benefits: cash flow savings by not advancing VAT, elimination of tariffs, the option to access Certified Company status with additional customs simplifications, basis for T-MEC access.

Requirements: annual export sales exceeding USD 500,000 or 10% of total turnover, inventory controls by origin, compliance with return deadlines.

The 1994 Spain-Mexico DTT (with 2015 protocol) establishes:

• Dividends: 0% if the receiving company holds at least 10% of the capital for 365 days, 10% otherwise.
• Interest: 4.9% for loans to banks, 10% in general.
• Royalties: 10%.
• Capital gains: generally taxed only in the State of residence of the transferor. Exceptions for real estate and real estate-related shareholdings.

To apply the reduced withholdings, the taxpayer must submit a tax residence certificate from the corresponding State and meet the formal requirements (in Mexico, the Residence Certificate Form for DTT Purposes).

RESICO is a simplified Mexican tax regime introduced in 2022 for small taxpayers. There are two modalities:

• RESICO individuals: for self-employed workers with income up to 3.5 million pesos per year. Progressive rate from 1% to 2.5% on gross income (no deductions).
• RESICO legal entities: for companies with income up to 35 million pesos per year and individual shareholders. Taxed at 30% on taxable profit but with cash flow benefits (recognition on collection, deduction on payment).

It is a very advantageous regime for small professionals and family businesses, but it does not apply to those with significant cross-border activity or a complex corporate structure.

Yes. Mexican operations are managed with knowledge of Mexican Spanish and the local idiosyncrasies: specific tax terminology (annual return, refund, condonation, tax audit report), use of "RFC" instead of "NIF", "CFDI" instead of "electronic invoice", among others. For European clients, we also translate documentation to be filed in Spain into Iberian Spanish.

Mexican operations are coordinated from Mexico City through an established professional network. Avenor's two own offices are in Spain (Toledo and Madrid). The client experiences local Mexican attention because coordination sits in CDMX, but matter direction is centralised from Spain, ensuring technical consistency with the same client's European operations.