# How do Mexican taxes work?



## Tiwaz (11 mo ago)

I'm not sure this is the right place to post this. If I am in error, please let me know and let me know where is the better place. 

I'm interested in retiring or potentially retiring in Mexico. 

I'm curious how taxes work in Mexico. How are they paid? They would not be deducted directly from my pay as that would be sent to me directly I'm outside the country. 

Is there any way of organizing my affairs to pay as little as possible. I am happy to pay what is needed. Just looking for how to structure things as efficiently as possible.


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## tomwins (Dec 27, 2014)

You would not pay income taxes unless you have earnings from work or investments. Taxes on earnings are deducted from your pay. Taxes on investments are deducted by the bank or investment firm. If you own a car or home you would pay the appropriate tax at the local authority. I have an investment account with Actinver and they deduct the taxes annually. It is easy, I don't have to do anything.


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## eastwind (Jun 18, 2016)

Do read through the other threads on this same topic. You can probably find some of them simply by scrolling down to 'recommended reading' but the search function always works too.


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## Tiwaz (11 mo ago)

tomwins said:


> You would not pay income taxes unless you have earnings from work or investments. Taxes on earnings are deducted from your pay. Taxes on investments are deducted by the bank or investment firm. If you own a car or home you would pay the appropriate tax at the local authority. I have an investment account with Actinver and they deduct the taxes annually. It is easy, I don't have to do anything.


Is retirement pay not considered earnings? It would be great if it's not. But I can't imagine that being retired would make it so that no taxes are owed.


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## eastwind (Jun 18, 2016)

I believe retirement pay is considered as a different category than regular income, and some different rules apply. Depending on your citizenship, Mexico may have an agreement with your home country not to tax retirement income or to not double-tax it.

For US citizens, you pay your US liability on your retirement income first, and hopefully the double-taxation treaty and exemptions on retirement income will mean you have no additional Mexican liability. Depending on the type and level of payments you receive, it might be different. You'll need to consult a Mexican tax accountant to understand your individual situation thoroughly and correctly.


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## Tiwaz (11 mo ago)

eastwind said:


> I believe retirement pay is considered as a different category than regular income, and some different rules apply. Depending on your citizenship, Mexico may have an agreement with your home country not to tax retirement income or to not double-tax it.
> 
> For US citizens, you pay your US liability on your retirement income first, and hopefully the double-taxation treaty and exemptions on retirement income will mean you have no additional Mexican liability. Depending on the type and level of payments you receive, it might be different. You'll need to consult a Mexican tax accountant to understand your individual situation thoroughly and correctly.


Fantastic. That's exactly what I'm trying to figure out. I am a citizen of Nicaragua. There is no tax treaty as far as I'm aware of between Nicaragua and anywhere. 

By the way, you mentioned to read through other threads on this topic. I might be just a bit slow or something, but I don't seem to be able to find much about taxes and Mexico or retirement and taxes and Mexico. If you happen to have a search term that works for you, would you mind sharing? Or any threads that you think are particularly useful. 

I appreciate your help and insight here.


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## MangoTango (Feb 8, 2020)

Tiwaz said:


> Fantastic. That's exactly what I'm trying to figure out. I am a citizen of Nicaragua. There is no tax treaty as far as I'm aware of between Nicaragua and anywhere.
> 
> By the way, you mentioned to read through other threads on this topic. I might be just a bit slow or something, but I don't seem to be able to find much about taxes and Mexico or retirement and taxes and Mexico. If you happen to have a search term that works for you, would you mind sharing? Or any threads that you think are particularly useful.
> 
> I appreciate your help and insight here.


There is a wealth of knowledge (and people) at this link :
Expat Tax


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