Retirement Visa in Mexico

Taxation for expats in Mexico can be complex and is influenced by the type of visa you hold and whether you are considered a Mexican tax resident.

Retirement Visas:

• Retirement visas are designed for those relocating to Mexico without plans to work or run a business. These visas often offer flat taxation rates.
• If you officially move your permanent residence to Mexico, you will likely be treated as a tax resident.

Tax Residency:

• Typically, non-residents or retirement visa holders are not subject to federal taxes in Mexico if their income is generated and taxed in their country of origin.
• However, if classified as a tax resident, you will be treated like any other citizen for tax purposes.

Canada-Mexico Tax Convention:

• Canada and Mexico have a Tax Convention that determines how your income is taxed if you become a resident in either country.
• As a Mexican tax resident, you will generally pay a 15% withholding tax on pension income from defined benefit plans, Canada Pension Plan (CPP), or Old Age Security (OAS) schemes.

Additional Income Sources:

• If you have other income sources, such as rental property, you will be subject to local tax rates on your worldwide income as a Mexican tax resident.

It’s crucial to consider these factors and seek professional advice to manage your tax obligations effectively when relocating to Mexico.

If you become a tax resident in Mexico, the income tax rate goes progresively up to 35% for earnings over 4,511,707 MXN (US$247,882).