Mexico’s Federal Executive Branch submitted the 2026 Economic Package to Congress, proposing major changes to VAT, excise, and income taxes, as well as the federal tax code, which are under review until 31 October 2025.

Mexico’s Federal Executive Branch presented the 2026 Economic Package to Congress on 8 September 2025, proposing significant changes to tax regulations.

The package includes stricter rules for value-added tax (VAT), excise tax (IEPS), income tax (IT), and the federal tax code (CFF). These proposals are currently under legislative review and must be finalised by 31 October 2025.

The EP is a collection of proposals, policies, and measures that the Executive Branch submits to Congress each year, no later than 15 November, outlining the key tax, budgetary, and financial guidelines that will shape the Government’s plan for the upcoming fiscal year. This EP comprises of the General Criteria for Economic Policy (GCEP), the Federal Expenditure Budget Bill (FEBB), and the Federal Revenue Bill (FRB).

The key proposed measures are as follows:

Broader withholding rules for digital platforms handling seller payments 

  • The proposal would require digital platforms to withhold VAT and income tax from Mexican legal entities (B2B), just as they do for individuals. Under this proposal, digital platforms would be required to withhold taxes as follows:
    • For sellers providing a Mexican tax ID (RFC): 50% of the VAT and 4% of the IT.
    • For sellers without an RFC: 100% of the VAT and 20% of the IT.
  • Additionally, platforms would need to withhold 100% of the VAT in specific cases, such as when platforms must withhold 100% VAT on sales by nonresidents when goods are in Mexico, and on payments deposited into foreign bank accounts, regardless of the seller’s residency.
  • Digital platforms must generate electronic invoices (CFDI) for the withholdings related to the transactions mentioned above.
  • Platforms must report information for all sellers, including legal entities, nonresidents, and Mexican sellers with offshore settlements, even if payments are not processed through the platform. The Mexican Tax Administration (SAT) will issue additional administrative rules to clarify reporting obligations.
  • The IT withholding rate for Mexican individuals selling goods or providing services through platforms will increase from 1% to 2.5%.
  • The Executive Branch proposes that digital platforms, both domestic and foreign, must provide the SAT with real-time online access to data on Mexican transactions, with technical details established by administrative rules.
  • Failure to comply may result in the temporary suspension of the platform’s internet access.

Interest withholding rate

The withholding tax rates have been increased to 0.90% on interest paid by the financial system for the 2026 fiscal year.

Online betting and sweepstakes excise taxes

  • The excise taxes on betting and sweepstakes will increase from 30% to 50% and apply to both B2B and B2C transactions, whether offered directly by providers or via intermediation platforms. If provided through platforms, a withholding mechanism applies.
  • Foreign digital services providers must obtain an RFC, appoint a legal representative, establish a tax domicile, and collect and remit the excise tax, similar to VAT digital service rules.
  • Non-compliance may result in the temporary suspension of Internet access to the platform.

Video games with violent content

    • An 8% excise tax is proposed on sales of video games with violent, explicit, or adult content. The tax applies only to B2C transactions in Mexico. It covers games sold in physical format, in addition to the standard 16% VAT.
    • The tax also applies to the access or download of such video games, in addition to the 16% VAT.
    • Imports are excluded from this rule.
  • Non-compliance may result in the temporary suspension of Internet access to the platform.

Other taxes

  • Flavoured beverages: Proposed levy raised to MXN 3.0818 per litre, including products with any type of non-caloric sugars.
  • Manufactured tobacco: Ad valorem rate proposed to increase from 160% to 200%, with a gradual increase of the specific levy until 2030.
  • Hand-rolled tobacco: Ad valorem rate proposed to rise from 30.4% to 32%.

If approved, the new measures will take effect on 1 January 2026.