Mexico’s proposed 2027 tax package would tighten rules on business deductions and tax losses while changing interest withholding, RESICO and VAT treatment. The measures would also introduce new incentives for qualifying investments and repatriated foreign resources.
Mexico’s executive branch has proposed a series of tax changes under its 2027 Economic Package, submitted to the Chamber of Deputies on 8 September 2026. The proposals would amend the Income Tax Law (LISR), Federal Internal Revenue Law (LIF) and Fees Law, including changes to interest withholding, business deductions, tax losses, RESICO and VAT.
Interest and investment
The annual withholding tax rate on interest paid by banks to Mexican individuals and companies would be set at 0.68% for 2027.
A new tax incentive would allow a 10% rate on qualifying sales of shares through national stock exchanges via public offerings and dual placements, subject to applicable requirements.
The package would also introduce a 7.5% rate on qualifying resources held abroad that are repatriated to or invested in Mexico in productive activities for at least three years. A 10% withholding rate would apply to dividends or capital redemptions distributed during the investment period.
Business deductions
The proposals would tighten the rules governing deductions and tax losses for Mexican entities with taxable income exceeding MXN 50 million.
The net interest deduction limit would be reduced from 30% to 20% of adjusted tax profit. Payments to persons abroad would generally become deductible only when the consideration had been paid and the required withholding tax had been remitted.
Deductions for advances relating to services and leases would also be deferred until the service had been provided or the relevant period of use or enjoyment had ended.
Tax losses and corporate groups
The package would introduce new limits on the use of pending tax losses by qualifying entities. A transitional rule for 2027 would restrict the use of previous-year tax losses to 50% of the resulting tax profit for affected taxpayers.
The optional regime for groups of companies would also be repealed. Companies covered by the regime would be required to disintegrate from 1 January 2027 and settle deferred tax under the proposed transitional rules.
RESICO and VAT
The proposed income thresholds for the RESICO regime would increase from MXN 3.5 million to MXN 5 million for individuals and from MXN 35 million to MXN 50 million for entities.
RESICO taxpayers would also be allowed to opt to calculate VAT at 7% on activities taxed and effectively charged during the relevant month, without the right to credit.
Qualifying taxpayers obtaining at least 90% of their income from selling books, newspapers and magazines would be able to apply a 0% VAT rate and credit VAT on eligible inputs and services.
Other measures
Collective financing banks would be required to withhold 16% VAT on accrued interest when paid. The package would also specify fiscal control obligations for electronic cigarettes and other nicotine-containing products.
The tax regularisation incentive for individuals and legal entities with 2025 income of no more than MXN 300 million would be extended.
If enacted, the proposed measures will apply from 1 January 2027.
