In Mexico, the corporate tax rate is 30%, which exceeds the average of OECD countries at 23.60%. On the other hand, the maximum personal income tax rate in Mexico is 35%, lower than the OECD average of 42.5%. However, there are situations, such as when a person receives dividends from abroad, where the percentage can exceed 35% or even 42.5%.
When filing the annual tax return, Mexican residents receiving dividends from abroad may encounter different levels of taxation. For example, if a U.S. company pays dividends to a Mexican investor, it withholds 10%. Subsequently, Mexican tax law requires the investor to pay another 10% to the SAT, which is non-refundable. Additionally, when declaring, the investor must consider the total dividend received, including the taxes withheld abroad.
This aspect can lead to a scenario where the investor ends up paying between 38.50% and 48.50% in taxes. It is crucial for those planning to invest abroad to carefully analyze the legal structure of their investments to avoid overpayment of taxes. It is expected that lawmakers will make modifications to benefit entrepreneurs and investors, avoiding excessive tax burdens in such transactions.
