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Q: Mexican Income Tax ( Answered 5 out of 5 stars,   1 Comment )
Subject: Mexican Income Tax
Category: Miscellaneous
Asked by: regino-ga
List Price: $10.00
Posted: 26 Oct 2006 15:28 PDT
Expires: 25 Nov 2006 14:28 PST
Question ID: 777262
I would like to know what the Mexican Income Taxes are derived from
investments i.e., (Capital Gains, Interest and dividends) for a
retired Mexican senior citizen and, would he be liable for payment of
those taxes if he lived abroad such as Costa Rica on a permanent
Subject: Re: Mexican Income Tax
Answered By: keystroke-ga on 26 Oct 2006 19:12 PDT
Rated:5 out of 5 stars
Hello regino,

Thank you for your question.  The Mexican non-resident would only be
taxed on income that is sourced from Mexico.

Mexico Connect "TAXES IN MEXICO"

"Non-residents are taxed only on their Mexican source income, usually
at flat rates applied separately to different types of gross income
without deductions. However, under special rules they may elect to be
taxed at higher rates on net taxable profits from sales of real
property or shares or on short-term construction, installation,
erection and similar work. No overall annual return is required of

"Taxes in Mexico"

"Resident individuals are subject to Mexican income tax on their
worldwide income, regardless of their nationality. Non-residents,
including Mexican citizens who can prove residence for tax purposes in
a foreign country, are taxed only on their Mexican source income.

The Federal Tax Code provides that a foreign individual will be
considered a resident of Mexico for tax purposes when he has
established his home in Mexico, unless he has been physically present
in a foreign country for more than 183 days, consecutive or not, in
one calendar year, and is able to prove residence for tax purposes in
that other country."

Capital Gains--

"Residents of Mexico are taxed on their worldwide capital gains,
whereas non-residents are only subject to Mexican tax on gains arising
from sales of real property located in Mexico or non-exempt sales of
shares of Mexican companies, regardless of where the sale takes

Investment taxes on dividends, etc., would only be taxed if they are from Mexico.

"Investment income
Residents are required to include investment income in their annual
returns, except for: (a) interest from the Mexican banking system and
government obligations, which is either subject to a final withholding
tax of 20% on gross interest (or a portion thereof) or is exempt; (b)
dividend income from Mexican corporations or investment funds; and (c)
capital gains on transactions carried out through the Mexican stock
exchange, which are exempt."

Search terms:
mexican income tax

If you need any additional clarification, let me know and I'll be glad
to assist you.

regino-ga rated this answer:5 out of 5 stars and gave an additional tip of: $5.00
Excellent work.  Thank you very much.

Subject: Re: Mexican Income Tax
From: keystroke-ga on 28 Oct 2006 06:47 PDT
Thank you for the five stars and the tip! :)


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