Taxes
Mexico — Tax: VAT (IVA)
Mexico's general VAT (IVA) rate is 16% on the sale of goods and services. A reduced 8% rate applies in the Northern and Southern border zones for qualifying goods and services. Essential items — basic food, medicines, and educational services — are zero-rated. As of 1 January 2026, new tax measures adjusted how VAT is charged in certain situations, though the headline rates (16% standard, 8% border zones, 0% essentials) remain unchanged from prior years.
Key facts
- Standard VAT (IVA) rate: 16%.
- Reduced rate: 8% in Northern and Southern border zones for qualifying goods/services.
- Zero-rated: basic food, medicines, educational services.
- From 1 January 2026: new rules on how VAT is charged in certain situations, but headline rates unchanged.
Costs
- Standard VAT rate: 16%
- Border zone reduced VAT rate: 8%
Common mistakes
- Assuming the reduced 8% border-zone VAT rate applies nationwide — it is limited to qualifying Northern/Southern border zone transactions.