Dividend and Investment Tax in Mexico

How are dividends from Mexican corporations taxed?

When a Mexican-resident company distributes profits to an individual shareholder, two layers of ISR (Impuesto Sobre la Renta) apply. The first is the corporate-level tax: if the dividend comes from earnings not recorded in the CUFIN (Cuenta de Utilidad Fiscal Neta, the net after-tax-profit account), the company pays an additional 30% ISR at entity level before distribution. The second layer, established in Article 140 of the LISR, is a 10% definitive withholding retained by the distributing company at the time of payment and remitted to the SAT by the 17th of the following month.[1] This 10% withholding cannot be credited or recovered in the shareholder's annual return -- it is a final, non-refundable tax cost.

For the integration calculation in the annual Declaracion Anual, the resident individual grosses up the dividend received by a factor of 1.4286 to arrive at the pre-corporate-tax equivalent, then applies personal marginal rates (ranging from 1.92% to 35%) and credits the corporate ISR already paid at 30% (equal to dividend x 0.4286). Shareholders whose personal marginal rate falls below 30% may receive a credit balance; those above 30% pay the difference. The 10% Article 140 withholding is charged on top of this integration calculation regardless of the outcome.[2]

Dividends paid from CUFIN balances representing earnings that already bore corporate ISR escape the additional entity-level tax, but the 10% individual-level withholding still applies to post-2013 CUFIN distributions. The Mexican Supreme Court upheld the constitutionality of this additional 10% levy in a landmark ruling, ending years of constitutional challenges by shareholders.[3]

How is bank-deposit interest income taxed?

Interest paid by Mexican financial institutions to resident individuals is governed by Articles 54 and 135 of the LISR. Banks, stockbrokers, SOFIPOs, and other financial intermediaries act as withholding agents, retaining a provisional ISR amount calculated by applying an annual rate to the average daily principal balance of the account -- not to the interest earned. For fiscal year 2026, this provisional rate is 0.90% annually (up from 0.50% in 2025), as set by Article 24 of the Ley de Ingresos de la Federacion (LIF) 2026, published in the Diario Oficial de la Federacion on 7 November 2025.[4]

For traditional banks, the 0.90% applies to all qualifying balances with no UMA-based exemption. SOFIPOs (Sociedades Financieras Populares) apply the exemption threshold of five UMAs (approximately MXN 213,973 annually in 2026) before withholding begins. This distinction is frequently misapplied -- the SOFIPO exemption does not extend to bank products.

The bank withholding is a provisional advance, not a final tax. In the annual ISR return (Declaracion Anual), the individual accumulates real interest income -- that is, nominal interest adjusted downward by the inflation factor for the period (intereses reales, LISR Article 133) -- alongside all other acumulable income. The final ISR on real interest is computed at the individual's marginal rate, which may reach 35% for taxable income above MXN 5,107,703.93 (2026 brackets). The provisional withholdings are credited against the final tax; any excess generates a refund or carryforward. Individuals whose annual real interest income does not exceed MXN 100,000 and who have no other filing obligation may treat the provisional withholding as definitive and omit the filing.[5]

How are capital gains on BMV-listed shares taxed?

Gains realised by resident individuals from selling shares listed on the Bolsa Mexicana de Valores (BMV) or the Bolsa Institucional de Valores (BIVA) are subject to a flat 10% ISR rate on the net gain for the year, as established by Article 129 of the LISR.[6] The gain equals the sale price minus the inflation-adjusted acquisition cost. Financial intermediaries (brokers) are required to calculate the annual net gain or net loss and deliver a statement to the investor so the taxpayer can compute and pay the ISR by the filing deadline.

This 10% rate is a definitive, final tax that does not accumulate with other income subject to progressive rates. Losses from BMV-listed share sales may offset gains within the same category. The 10% rate is a preferential treatment relative to general ISR rates (up to 35%) applicable to unlisted-share disposals, where gains are integrated at the individual's full marginal rate.

Shares traded outside recognised Mexican exchanges -- including private-company share transfers -- follow general ISR rules: gains are accumulated at progressive personal rates up to 35%, subject to inflation adjustment of the acquisition cost and applicable deductions.

How are foreign dividends and treaty credits handled?

Mexican-resident individuals are subject to Mexican ISR on worldwide income, including dividends distributed by foreign corporations. Foreign dividends must be declared in the annual Declaracion Anual and are subject to Mexican progressive rates up to 35%. In addition, similar to domestic dividends, an additional 10% ISR on the net foreign dividend applies and must be paid by the 17th of the month following receipt, under the same Article 140 framework extended to foreign-source distributions.[7]

Relief for foreign tax already paid at source is available under Article 5 of the LISR. The taxpayer may credit the income tax paid in the foreign country against their Mexican ISR liability, subject to the limitation that the credit cannot exceed the amount of Mexican ISR that would have applied to the same income. Excess foreign tax cannot be used to offset Mexican ISR on Mexican-source income. Where Mexico holds a double-taxation treaty (DTT) with the source country -- Mexico has an active network of more than 60 treaties, including with the United States, Canada, the United Kingdom, Spain, Germany, the Netherlands, France, and Japan -- the treaty typically reduces the foreign withholding rate and reaffirms the credit method, ensuring that the Article 5 credit limit is the operative ceiling. The US-Mexico treaty (1992 with subsequent protocols), for instance, caps dividend withholding at 5% where the recipient beneficially owns 10% or more of the paying company, or 10% otherwise.

What is the RESICO regime, and does it apply to investment income?

The Regimen Simplificado de Confianza (RESICO), effective from January 2022, allows eligible individuals engaged in business activities, professional services, leasing, and primary-sector activities with annual income up to MXN 3.5 million to pay ISR at flat rates between 1% and 2.5% based on cash-flow income, without deductions. Monthly payments are definitive -- as of 2025, RESICO individuals are no longer required to file annual returns, with monthly payments considered final.

However, investment income -- dividends, interest, and capital gains from shares -- falls outside the RESICO regime. Individuals receiving these income types cannot include them in RESICO taxation; they must declare dividends under Article 140, interest under Articles 133-135, and BMV gains under Article 129 using the general rules described above. Furthermore, individuals who are shareholders or partners in legal entities are specifically excluded from using RESICO for the corresponding income streams. Investment income and RESICO business income remain entirely separate reporting obligations for any individual who participates in both.[8]

Mexico investment income at a glance

For residents expecting significant dividend, interest, or BMV-share income in any fiscal year, timing of distributions and provisional-withholding management can have material cash-flow implications. Consult a qualified tax professional to model the annual return reconciliation and assess any foreign-tax-credit positions under applicable treaties.

For a broader picture of the Mexican tax system, see the Mexico country overview and the related crossover on Mexico capital gains tax.

This page summarises publicly available rules as of June 2026 based on SAT-administered legislation and third-party professional commentary. It is informational only. For filings, elections, or any decision affecting your tax position, engage a qualified tax professional with Mexican ISR expertise.