VAT Rates in Mexico

Standard VAT rate

Exempt from VAT

• Residential land and buildings, along with specific construction services like hydraulic, sanitary, electrical, and metal installations, are exempt from VAT. This exemption applies if they are intended for residential use. Hotels are excluded, and if only part of a building is used for residential purposes, only that part is exempt. Compliance with certain reporting requirements is necessary for the construction services exemption.
• Publications such as books, newspapers, and magazines, along with copyright payments made to authors, are exempt from VAT.
• Personal property that is used and not sold by businesses is exempt from VAT.
• Lottery and gambling tickets, including vouchers for raffles and various contests, along with the prizes won, are exempt.
• Financial instruments such as Mexican and foreign currencies, coins previously used as currency, and troy ounce coins are exempt from VAT.
• Securities transactions including shares, equity quotas, accounts receivable, and other securities, with some exceptions, are exempt.
• Gold ingots with a purity of at least 99% gold, sold retail to the public, are exempt.
• Transactions involving goods physically located in Mexico but involved in temporary imports or exports under IMMEX or other qualified export programs between non-resident entities are VAT exempt.
• Goods produced by officially recognized charitable organizations are also exempt from VAT.

• Residential mortgage-related commissions and other fees charged by creditors.
• Management fees for statutory retirement funds.
• Free services, except those provided by entities to their owners or associates.
• Educational services from both public and private entities recognized by law.
• Urban, suburban, and metropolitan area public land transportation (excluding services offered through digital platforms).
• Non-resident international sea transport of goods without permanent establishments in Mexico, excluding cabotage.
• Services by authorized charitable entities.
• Certain life, home credit, and agricultural risk insurance types, including related commissions and reinsurance.
• Interest payments exempt from VAT include:
  • Interest from specific financial leasing not subject to VAT or taxed at 0%.
  • Interest by financial institutions on authorized financing or for receivable discounts, excluding certain commissions and scenarios involving individuals.
  • Interest by guarantor institutions and insurance companies in financing operations, excluding credits via credit cards or to non-business individuals.
  • Interest on home mortgages or guarantees.
  • Interest from workers’ and company-established savings funds meeting tax deductibility requirements.
  • Interest from debentures under the General Law of Securities and Credit Operations.
  • Interest from or paid by public institutions issuing bonds guaranteed by the federal government.
  • Interest from federal government or intermediary securities, when specific conditions are met.
  • Interest from publicly offered securities.
• Services related to derivative financial operations.
• Services to members of organizations in line with their legally recognized purposes, including political, labor, commerce, industry, professional, and scientific groups.
• Certain public entertainment admission tickets.
• Medical services requiring professional degrees, including those by private charities, as well as clinical and laboratory services provided by decentralized government agencies.

Zero rated

Supplies that are zero-rated are taxed at a rate of zero percent. Mexico assigns a zero rate of VAT to a range of goods and services, such as exports and medicines.

• Raw animals and vegetables, excluding rubber, dogs, cats, or small household pets.
• Patented medicines.
• Food products for human or animal consumption, with exceptions for items sold in restaurants or as prepared carry-out food, except for beverages such as juices, nectars, and concentrates (excluding milk), syrups, powders for soft drinks, caviar, smoked salmon, elvers, flavorings, microcapsules, additives, chewing gum, and processed pet foods.
• Ice and non-gaseous or unmixed water, unless in containers smaller than 10 liters.
• Ixtle, palm, and lechuguilla.
• Tractors without caterpillar tracks, other agricultural machinery sold whole, and tractor tires.
• Fertilizers, insecticides, fungicides, and herbicides for agricultural use.
• Hydroponic greenhouses and integrated equipment designed to control temperature and humidity, protect crops from environmental effects, and irrigation equipment.
• Gold, jewelry, silverware, artistic or decorative pieces, and gold ingots containing at least 80% gold, not sold at retail to the general public.
• Books, newspapers, and magazines, excluding periodicals, published by the taxpayer.
• Sanitary pads, tampons, and menstrual cups.

• Services provided to the agriculture, ranching, and fishing sectors.
• Grinding or crushing of corn or maize.
• Milk pasteurization.
• Operations within hydroponic greenhouses.
• Cotton ginning.
• Slaughtering of cattle or poultry.
• Reinsurance services.
• Domestic water supply.
• Temporary use or enjoyment of specific agricultural equipment and hydroponic greenhouses.