Below is a table outlining the VAT (Value Added Tax) rates in Mexico:
| Type of Goods/Services | VAT Rate | Description |
|---|---|---|
| Standard Rate | 16% | Applies to most goods and services sold in Mexico, including imports. |
| Reduced Rate (Border Regions) | 8% | Applies to goods and services in designated border regions (20 km from the border) to stimulate the economy. |
| Zero Rate | 0% | Applies to exports and certain goods/services like food (basic staples), medicines, and agricultural products. |
| Exemptions | Exempt | Certain goods/services are VAT-exempt, including health services, education, and used residential properties. |
Additional Notes:
- Standard Rate (16%): This is the general VAT rate applied throughout most of Mexico.
- Reduced Rate (8%): Specifically for border regions to remain competitive with neighboring countries like the USA. This rate applies to both goods and services.
- Zero Rate (0%): While VAT is charged, the rate is zero, which allows businesses to claim credits for VAT paid on inputs.
- Exemptions: No VAT is charged, and businesses dealing exclusively in exempt goods or services cannot claim VAT credits on their inputs.
This table helps you understand how VAT is applied across different scenarios in Mexico.