Mexico’s 2027 Economic Package proposes tax reforms to tighten compliance, limit certain tax benefits, and encourage investment and the return of foreign capital. The proposed changes would affect several areas of taxation, including the deductibility of business expenses, the use of tax losses, withholding tax on interest payments, the Simplified Trust Regime (RESICO), and VAT treatment.
At the same time, the government plans to introduce new tax incentives for qualifying investments and the repatriation of foreign resources, seeking to stimulate domestic economic activity while strengthening tax revenue collection.
RESICO and VAT Changes
The proposed changes would expand access to Mexico’s Simplified Trust Regime (RESICO) by increasing the annual income thresholds from MXN 3.5 million to MXN 5 million for individuals and from MXN 35 million to MXN 50 million for legal entities.
The package would also introduce an optional VAT calculation method allowing RESICO taxable persons to apply a 7% rate to taxable activities carried out and effectively paid for during the relevant month, without the right to credit input VAT. In addition, qualifying taxable persons deriving at least 90% of their income from selling books, newspapers and magazines would benefit from a 0% VAT rate while retaining the right to credit VAT paid on eligible purchases and services.
Additionally, collective financing institutions would be required to withhold 16% VAT on accrued interest when making interest payments.
Withholding on Digital Platform Transactions
A 2.5% corporate income tax (CIT) withholding rate would apply to sales of goods and services provided by individuals and legal entities conducting business through digital platforms. However, where legal entities fail to provide their Federal Taxpayer Registry (RFC) number to the platform, the withholding rate would increase to 20%.
Non-residents without a permanent establishment in Mexico and Mexican residents providing intermediation services through digital platforms must withhold 100% of the VAT collected when receiving payment for the transaction. This obligation will also apply where transaction proceeds are deposited into bank or deposit accounts held abroad.
Final Remarks
The proposed package does not introduce new general taxes or raise existing tax rates. Instead, it focuses on strengthening enforcement and preventing tax avoidance, particularly through tighter restrictions on business deductions and the use of net operating losses. Most measures are expected to take effect on January 1, 2027. However, they remain subject to congressional debate, approval, and publication in Mexico’s Official Gazette, so their final scope, implementation rules, exceptions, and transitional provisions may still change.
