Accounting & Tax in Mexico
Stay current on SAT's ISR, IVA, and electronic accounting requirements year-round, so your Mexican entity never loses its ability to invoice or claim deductions.
Annual Return Deadline
March 31
Tax ID
RFC
Primary Registry
SAT
Accounting & Tax in Mexico: What You Need to Know
A standard foreign-owned subsidiary in Mexico pays a flat 30% ISR corporate income tax under the regular T铆tulo II regime, since the simplified RESICO regime is limited to individuals and does not apply to a typical subsidiary. Monthly provisional ISR payments are due by the 17th of the following month, calculated using the prior year's profit coefficient, and the annual return is due March 31. IVA runs at 16% nationally (8% in the northern and southern border zones), filed monthly alongside the DIOT informative return, both due the 17th. Every transaction, including payroll, must carry a CFDI 4.0 electronic invoice stamped in real time by an authorized PAC. SAT also requires monthly electronic accounting submissions of the chart of accounts and trial balance, with records kept in Spanish and pesos and retained for five years. Related-party transactions with the foreign parent need transfer pricing documentation, with a Local File, Master File, and Country-by-Country Report required above applicable size thresholds.
Key Requirements
Flat 30% ISR corporate income tax rate under T铆tulo II, with no simplified regime available to a standard foreign-owned subsidiary
Monthly provisional ISR payments due by the 17th of the following month, calculated using the prior year's profit coefficient (coeficiente de utilidad)
16% IVA (8% in the northern and southern border zones), filed monthly alongside the DIOT informative return, both due the 17th of the following month
CFDI 4.0 electronic invoicing required for virtually every transaction, including payroll and payment complements, stamped in real time by an authorized PAC
Monthly electronic accounting (contabilidad electr贸nica) submission to SAT of the chart of accounts and trial balance, with records kept in Spanish and Mexican pesos and retained for 5 years
Transfer pricing documentation (Local File, and Master File and Country-by-Country Report above applicable thresholds) required for related-party transactions with the foreign parent
Common Challenges
Beneficial-owner disclosure is a recurring obligation, not a one-time filing
Every Mexican legal entity must identify, document, and keep updated its ultimate beneficial owner information for SAT, disclosable on request. Treating this as a formation-only step is a common and costly mistake, since penalties run into the millions of pesos per unidentified or inaccurate owner.
DIOT cross-matching is a common audit trigger
SAT reconciles supplier-reported IVA collected against buyer-reported IVA paid every month. Mismatches on intercompany or related-party invoices are one of the most common triggers for a clarification request or audit.
Cross-border related-party payments draw the closest scrutiny
Royalties, management fees, intercompany services, and financing between the Mexican entity and its foreign parent are a top SAT audit focus, especially where the related party sits in a jurisdiction SAT treats as low-tax. Deductions can be denied outright.
How NavviPal Helps
Monthly ISR provisional payment and IVA/DIOT filing, handled on the 17th-of-month deadline every cycle
Preparation and submission of electronic accounting records (contabilidad electr贸nica) in the format and language SAT requires
Beneficial-owner documentation kept current and ready to disclose, so a routine SAT request never turns into a penalty
Transfer pricing documentation for related-party transactions with the foreign parent, prepared ahead of the Local File and Master File deadlines
Frequently Asked Questions
Why does DIOT cross-matching increase Mexico's audit risk for related-party transactions?
SAT reconciles supplier-reported IVA collected against buyer-reported IVA paid every month through the DIOT informative return. Mismatches on intercompany or related-party invoices are one of the most common triggers for a clarification request or audit, so intercompany invoicing needs to reconcile exactly between the Mexican entity and its counterparties before filing.
Is beneficial-owner disclosure a one-time filing in Mexico?
No. Every Mexican legal entity must identify, document, and keep updated its ultimate beneficial owner information for SAT, disclosable on request at any time. Treating this as a formation-only step is a common and costly mistake, since penalties run into the millions of pesos per unidentified or inaccurate owner.
Why do cross-border related-party payments draw closer scrutiny from SAT?
Royalties, management fees, intercompany services, and financing between a Mexican entity and its foreign parent are a top SAT audit focus, especially where the related party sits in a jurisdiction SAT treats as low-tax. Deductions on these payments can be denied outright if the transfer pricing documentation doesn't hold up.
Does Mexico have a simplified tax regime for a foreign-owned subsidiary?
No. A standard foreign-owned subsidiary pays the flat 30% ISR corporate income tax under the regular T铆tulo II regime. The simplified RESICO regime is limited to individuals and does not apply to a typical subsidiary.
What does Mexico's monthly electronic accounting submission actually require?
SAT requires monthly electronic accounting (contabilidad electr贸nica) submission of the chart of accounts and trial balance, with records kept in Spanish and Mexican pesos and retained for five years. This is separate from CFDI invoicing and from the DIOT informative return, and it's a recurring monthly obligation, not an annual one.
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