How Remote Workers Pay About 2% Tax in Mexico: The RESICO Regime
Mexico · Taxes
Key Facts
- The regime. RESICO taxes self-employed income at 1 to 2.5 percent of gross, with no deductions.
- The ceiling. It is open to those billing up to about 3.5 million pesos (~US$200,000) a year.
- Exported services. Services used abroad and paid from abroad carry 0 percent VAT.
- The trade-off. The rate is on gross income, so there are no expense deductions.
- The duty. Monthly electronic invoicing and filings are required.
One of the quieter reasons remote workers settle in Mexico is a tax regime that can leave a freelancer paying close to 2 percent of income. It is called RESICO, and for anyone invoicing foreign clients it is worth understanding before you register.
What RESICO is
RESICO, the Simplified Trust Regime, is a Mexican tax option for self-employed individuals with professional, business or rental income. Instead of taxing profit after expenses, it applies a low fixed rate to the income you actually collect each month.
It is open to residents whose annual income does not exceed about 3.5 million pesos (~US$200,000). For most freelancers and remote workers, that ceiling is comfortably above what they bill.
The rates
The income-tax rate rises in small steps with monthly income, from 1 percent at the bottom to 2.5 percent at the top of the scale. It is charged on gross income collected, without deductions.
| Monthly income (MXN) | ISR rate |
|---|---|
| Up to 25,000 (~US$1,430) | 1.00% |
| Up to 50,000 (~US$2,860) | 1.10% |
| Up to 83,333 (~US$4,770) | 1.50% |
| Up to 208,333 (~US$11,930) | 2.00% |
| Up to 291,667 (~US$16,700) | 2.50% |
Because the rate is so low, the trade-off of losing deductions rarely hurts a service worker with few business costs. For a location-independent freelancer, the effective burden often lands near 2 percent.
The zero-VAT angle for exports
The second advantage is value-added tax. Services that are used abroad and paid for from abroad, such as software or consulting work for a foreign client, count as exports and carry a 0 percent VAT rate.
A freelancer in RESICO charges no VAT on that work and can still credit the VAT on genuine business costs. For someone billing clients in the United States or Europe, that removes a layer of tax entirely.
The obligations
The simplicity comes with discipline. You must issue proper electronic invoices, the CFDI, for your income, and file monthly, with the tax authority pre-filling much of the return from your invoices.
You also need to be a Mexican tax resident with the right registration, which means holding residency and a tax ID. Missing the monthly filings can push you out of the regime, so the paperwork has to be kept up.
Who it suits, and the caveats
RESICO fits self-employed remote workers and consultants who invoice cleanly and have modest expenses. It is less useful for those with high deductible costs, who might do better under the general regime.
Eligibility and rates are set by the tax authority and can change, and your position depends on residency and how your work is invoiced. Confirm the current rules with a Mexican accountant before registering; this is general information, not tax advice.
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Frequently Asked Questions
What is Mexico’s RESICO regime?
A simplified tax regime for the self-employed that taxes income at 1 to 2.5 percent of gross, with monthly electronic invoicing and no deductions.
How much tax do freelancers pay under it?
The income-tax rate runs from 1 to 2.5 percent of collected income, so many freelancers pay close to 2 percent.
Is there VAT on foreign clients?
No. Services used abroad and paid from abroad count as exports and carry a 0 percent VAT rate.
Who can use RESICO?
Mexican tax residents who are self-employed and bill up to about 3.5 million pesos (~US$200,000) a year, with the right registration.
What are the obligations?
Issuing electronic invoices and filing monthly. Missing filings can push you out of the regime.
Sources: Mexico's RESICO regime.
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