Mexico offers one of its most attractive income tax regimes to qualifying individuals: the Simplified Trust Tax Regime (RESICO), which allows taxpayers to pay income tax at rates ranging from just 1% to 2.5% of their qualifying revenue.
For foreign nationals living in Mexico, freelancers working with international clients, software developers, consultants, and independent professionals, RESICO can represent a significant tax advantage.
However, eligibility is not determined exclusively by income. Foreign investments, ownership interests in companies, certain types of income, and failure to comply with Mexican tax obligations can prevent taxpayers from entering or remaining in the regime.
This guide explains how RESICO works in 2026, including its tax rates, income limits, eligibility requirements, annual tax return exemptions, foreign income treatment, investment restrictions, and practical examples.
1. What Is RESICO in Mexico?
RESICO stands for Régimen Simplificado de Confianza, or Simplified Trust Tax Regime.
Introduced in January 2022, RESICO was designed to simplify income tax compliance and provide favorable tax treatment for eligible taxpayers.
Mexican tax legislation establishes two separate RESICO frameworks:
RESICO for individuals (Personas Físicas)
This regime is available to qualifying individuals conducting business activities, providing independent professional services, or earning rental income, subject to an annual income limit of MXN $3.5 million and other eligibility requirements.
Income tax rates range from 1% to 2.5%.
RESICO for legal entities (Personas Morales)
This regime applies to certain qualifying Mexican legal entities, generally with annual revenue not exceeding MXN $35 million and satisfying specific shareholder and eligibility requirements.
Unlike RESICO for individuals, qualifying legal entities calculate income tax under a different framework, generally applying the corporate income tax rate of 30% to the corresponding taxable base.
This article focuses on RESICO for individuals, particularly foreign residents and professionals receiving income from international clients.
2. Who Can Qualify for RESICO?
Article 113-E of Mexico’s Income Tax Law (Ley del Impuesto sobre la Renta, or LISR) establishes the principal requirements.
RESICO is generally available to qualifying individuals who conduct:
- Business and commercial activities.
- Independent professional services.
- Consulting and freelance work.
- Real estate rental activities.
- Agricultural, livestock, forestry, and fishing activities, subject to special provisions.
The taxpayer’s relevant annual income must generally remain within the MXN $3.5 million statutory limit.
Individuals beginning operations may also elect RESICO when their estimated revenue satisfies the applicable conditions.
However, meeting the income threshold does not automatically establish eligibility.
Certain investments, corporate ownership interests, income classifications, and other legal circumstances can prevent an individual from qualifying.
Can employees also use RESICO?
Yes, under certain conditions.
Employment income cannot itself be taxed under RESICO, but individuals receiving salaries may potentially apply RESICO to their separate qualifying business or professional activities.
For example, a person employed by a Mexican company who also provides independent consulting services may qualify for RESICO on the consulting income.
The taxpayer must comply with the applicable combined income limitations and the rules governing each category of income.
3. RESICO Income Tax Rates in Mexico for 2026
One of RESICO’s most significant advantages is its simplified income tax calculation.
Unlike Mexico’s general individual income tax regime, where progressive rates can reach 35%, RESICO applies substantially lower percentages to qualifying collected revenue.
Monthly RESICO Tax Rates
| Monthly Income in MXN | ISR Rate |
|---|---|
| Up to $25,000 | 1.00% |
| $25,000.01 to $50,000 | 1.10% |
| $50,000.01 to $83,333.33 | 1.50% |
| $83,333.34 to $208,333.33 | 2.00% |
| Above $208,333.33 | 2.50% |
These rates are applied to qualifying revenue actually collected, excluding VAT.
The applicable percentage is generally applied to the entire qualifying monthly revenue amount, rather than using a progressive marginal tax calculation.
Practical Example: Freelancer Earning MXN $60,000 Monthly
Consider a freelance software developer who receives MXN $60,000 during a month.
| Concept | Amount |
|---|---|
| Monthly revenue collected | $60,000 |
| Applicable RESICO tax rate | 1.50% |
| Monthly income tax | $900 |
| Annual revenue assuming 12 equal months | $720,000 |
The monthly income tax would be MXN $900, before considering any applicable withholding.
This example excludes VAT and assumes that the taxpayer meets all RESICO eligibility requirements.
The simplicity of this calculation makes RESICO particularly attractive to professionals with relatively low operating expenses.
4. RESICO vs. Mexico’s General Business Tax Regime
Before selecting RESICO, individuals should compare it with Mexico’s general business and professional activities regime.
Under the general regime, income tax is calculated based on taxable profit, considering authorized deductions and progressive tax rates.
Under RESICO, income tax is generally calculated on collected revenue without deducting operating expenses.
| Feature | RESICO | General Business Regime |
|---|---|---|
| Income tax rates | 1%–2.5% | Up to 35% |
| Tax base | Collected revenue | Taxable profit |
| Business expense deductions for ISR | Not permitted | Generally permitted |
| Annual income limit | MXN $3.5 million | No equivalent general limit |
| Monthly tax returns | Yes | Yes |
| Corporate ownership restrictions | Yes | Different eligibility rules |
| VAT obligations | Applicable | Applicable |
For independent consultants, freelancers, and other service providers with limited expenses, RESICO may produce substantial income tax savings.
However, businesses with significant operating costs should evaluate whether the general regime provides a more favorable result.
The lowest nominal tax rate is not necessarily the best tax outcome for every taxpayer.
5. Can Foreigners Qualify for RESICO in Mexico?
Yes. Foreign nationals can potentially qualify for RESICO if they are Mexican tax residents and meet the other statutory requirements.
Mexican citizenship is not required.
However, immigration status and tax residency are different legal concepts.
A foreign national holding temporary or permanent immigration residency does not automatically qualify as a Mexican tax resident.
Likewise, spending fewer than 183 days in Mexico does not necessarily prevent an individual from becoming a Mexican tax resident.
How Is Mexican Tax Residency Determined?
Article 9 of Mexico’s Federal Tax Code (Código Fiscal de la Federación, or CFF) establishes the principal domestic tax residency rules.
For individuals, relevant considerations include:
- Having a home in Mexico.
- The location of the individual’s center of vital interests, when applicable.
- The location and nature of income-generating activities.
- Other circumstances relevant under Mexican domestic law and applicable tax treaties.
Consequently, a foreign national who establishes a home and center of vital interests in Mexico may become a Mexican tax resident even while receiving all their professional income from foreign customers.
Mexican tax residents are generally subject to Mexican income tax on worldwide income, subject to applicable exemptions and treaty provisions.
Example: American Consultant Living in Mexico
An American citizen relocates to Guadalajara and provides consulting services to US companies.
The individual:
- Establishes Mexican tax residency.
- Earns MXN $1.8 million annually.
- Does not own shares in corporations.
- Does not receive income incompatible with RESICO.
- Complies with Mexican tax registration and invoicing obligations.
Subject to a complete eligibility assessment, the individual may qualify for RESICO.
However, US citizenship can create continuing US federal tax filing obligations, and the interaction between Mexican and US tax systems should be evaluated separately.
6. Can Freelancers Working for US or Foreign Companies Use RESICO?
Yes, potentially.
A common misconception is that RESICO applies only to individuals earning income from Mexican customers.
In reality, the customer’s country of residence does not automatically determine eligibility.
A Mexican tax resident may provide independent services to clients located in the United States, Canada, Europe, or other countries and potentially apply RESICO to the corresponding income.
Examples include:
- Software developers working remotely for US companies.
- Marketing consultants with international clients.
- Graphic designers providing services abroad.
- Independent IT consultants.
- Freelance writers and content creators.
- Business consultants working with foreign companies.
The relevant considerations include the legal classification of the income, the taxpayer’s tax residency, annual revenue, and compliance with the other RESICO requirements.
What About Wise, PayPal, Stripe, or Payoneer?
Receiving payments through international financial platforms does not automatically prevent a taxpayer from qualifying for RESICO.
However, income must be properly documented and reported.
Taxpayers should identify the date on which revenue was effectively collected, apply the relevant foreign exchange rules, and issue Mexican electronic invoices (CFDI) when required.
The use of an international bank account or payment platform does not eliminate Mexican tax obligations.
Special consideration is also necessary for income received through digital platforms that may be subject to specific Mexican tax provisions.
7. Does RESICO Include VAT?
No.
RESICO determines the applicable income tax treatment, but it does not automatically eliminate Value Added Tax (IVA) obligations.
Mexico’s standard VAT rate is generally 16%.
Depending on the nature of the transaction, certain activities may qualify for zero-rating or exemption.
Services Provided to Foreign Customers
Certain services provided to foreign customers may qualify for Mexico’s 0% VAT rate under the exportation-of-services provisions.
However, the fact that a customer is located abroad or pays in foreign currency does not automatically establish eligibility for zero-rated VAT.
The nature of the service, its use or exploitation abroad, and the requirements established by the Mexican VAT Law must be evaluated.
Practical Example
A software developer living in Mexico provides services to a US company.
For income tax purposes, the developer may qualify for RESICO.
For VAT purposes, a separate analysis is required to determine whether the services meet the conditions for zero-rating as an export.
Incorrectly applying the 0% VAT rate can create significant tax exposure.
Can RESICO Taxpayers Credit VAT on Expenses?
Potentially, yes.
Although business expenses are not deducted when calculating individual RESICO income tax, VAT creditability follows separate legal rules.
A qualifying taxpayer may be entitled to credit VAT paid on eligible expenses when the requirements of the VAT Law are satisfied.
8. RESICO and Foreign Investments: Stocks, ETFs, and Dividends
Foreign investments are among the most important issues for expatriates considering RESICO.
Many foreign residents maintain investment accounts in the United States, Europe, Canada, or other jurisdictions.
These accounts may contain:
- Shares in publicly traded companies.
- Exchange-traded funds (ETFs).
- Bonds and money market instruments.
- Investment funds.
- Retirement accounts.
- Other financial products.
While RESICO provides attractive tax rates, certain investment structures can create eligibility restrictions.
Foreign Corporate Shares
Article 113-E generally excludes individuals who are partners, shareholders, or members of legal entities, subject to specific exceptions.
Consequently, an individual who owns shares in a foreign corporation may face restrictions on RESICO eligibility.
The fact that the corporation is incorporated outside Mexico does not automatically resolve the issue.
What About ETFs?
ETFs require a more detailed legal analysis.
Not every ETF has the same structure.
Some are organized as investment companies, while others may operate through trusts or other legal arrangements.
For Mexican tax purposes, it is important to determine the actual legal nature of the instrument and the rights acquired by the investor.
Accumulating ETFs and Unrealized Gains
Some ETFs accumulate investment returns without distributing cash to investors.
An increase in market value does not ordinarily create realized income solely because the investment has appreciated.
However, this does not automatically establish RESICO eligibility.
Two separate questions must be evaluated:
- Whether the investment produces income that must be recognized for Mexican tax purposes.
- Whether ownership of the instrument creates a legal restriction on participating in RESICO.
An investment may not generate currently taxable income while still presenting an eligibility concern.
At TAX ID Mexico, we recommend a conservative approach when evaluating foreign investment portfolios.
Where the legal classification of an investment creates uncertainty, the potential tax benefits of RESICO should be weighed against the risk of losing eligibility.
What About Interest Income?
Certain interest income may coexist with RESICO under the applicable legal provisions.
However, interest must be distinguished from dividends, capital gains, and returns from other financial instruments.
The legal classification of the income is essential.
9. Who Cannot Use RESICO?
Even individuals earning less than MXN $3.5 million annually may be excluded from RESICO.
Under Article 113-E, important restrictions include individuals who:
- Are partners, shareholders, or members of legal entities, except where specific exceptions apply.
- Are related parties under the relevant legal provisions.
- Are foreign tax residents with a permanent establishment in Mexico.
- Receive income subject to preferential tax regimes under the applicable provisions.
- Receive certain income assimilated to employment under Article 94 of the Income Tax Law.
Other compliance-related restrictions may also apply.
For foreign residents, corporate ownership and international investment structures are particularly important.
Before choosing RESICO, taxpayers should review their complete financial situation rather than evaluating only their freelance or consulting revenue.
10. What Are the Tax Obligations Under RESICO in 2026?
RESICO simplifies income tax calculations but does not eliminate administrative obligations.
RFC Registration
Taxpayers must register with Mexico’s Tax Administration Service (SAT) and maintain the appropriate tax activities and obligations.
Electronic Invoicing (CFDI)
Taxpayers must issue electronic tax invoices for their activities in accordance with Mexican tax rules.
This obligation can also apply when providing services to foreign customers.
Electronic Signature (e.firma)
RESICO taxpayers must comply with the electronic signature requirements.
Under Rule 3.13.33 of the 2026 Miscellaneous Tax Resolution, individuals entering RESICO generally have until two months after submitting the corresponding RFC notice to obtain their e.firma.
Taxpayers should also maintain their electronic signature in valid condition.
The SAT password, commonly referred to as CIEC, should not be considered a permanent substitute for the e.firma requirement.
Monthly Income Tax Returns
RESICO taxpayers generally file monthly income tax returns by the 17th day of the following month, subject to applicable deadline extensions.
Income tax is calculated using qualifying revenue actually collected, excluding VAT.
Withholding by Mexican Companies
When a RESICO individual provides qualifying services to a Mexican legal entity, Article 113-J generally requires the company to withhold 1.25% income tax on the payment, excluding VAT.
This withholding can be credited against the individual’s corresponding RESICO income tax.
The withholding rules may differ for certain activities and transactions.
Annual Income Tax Return: Important 2026 Exemption
One of RESICO’s significant administrative advantages in 2026 is the exemption from filing an annual income tax return for qualifying RESICO income.
Under Rule 3.13.7 of the 2026 Miscellaneous Tax Resolution, monthly RESICO income tax payments are treated as final payments.
Consequently, qualifying taxpayers are relieved from filing an annual income tax return for income covered by RESICO.
This relief applies to the RESICO income itself.
Individuals who also receive salaries or interest income must separately determine whether those additional income categories create an annual tax filing obligation.
Similarly, taxpayers who leave RESICO during the year may have additional filing requirements under the applicable transition rules.
RESICO Income Tax Refunds
Taxpayers with qualifying RESICO income tax balances in their favor may request refunds under Rule 3.13.34.
The rule allows eligible taxpayers to request refunds of balances reported in monthly final returns or, subject to its conditions, request the accumulated annual amount through the SAT refund procedure.
A separate annual RESICO return is not necessarily required to request these refunds.
VAT and Other Compliance Requirements
The annual RESICO income tax return exemption does not eliminate monthly VAT obligations.
Taxpayers must also maintain appropriate documentation and comply with applicable tax mailbox requirements.
The SAT has established specific transitional relief for tax mailbox activation, so the applicable deadline should be checked for the taxpayer’s circumstances.
11. What Happens If You Exceed the MXN $3.5 Million Income Limit?
For fiscal year 2026, the annual RESICO income threshold for individuals remains MXN $3.5 million.
An individual who exceeds this threshold generally loses eligibility and must transition to the corresponding tax regime beginning in the month following the event that causes the loss of eligibility.
This may result in substantially different income tax calculations and filing obligations.
Practical Example
A consultant initially expects annual revenue of MXN $3 million.
However, additional contracts increase collected revenue above MXN $3.5 million during the year.
The taxpayer must evaluate the mandatory transition out of RESICO and determine the appropriate income tax treatment under the applicable provisions.
The transition rules can affect the treatment of payments previously made under RESICO.
What About a Proposed Increase to MXN $5 Million?
Proposals have been discussed to increase the income threshold to MXN $5 million for 2027.
However, proposed legislation should not be confused with enacted law.
For 2026, taxpayers should continue applying the MXN $3.5 million statutory threshold.
Any future increase would require the corresponding legislative approval and effective date.
12. Can You Return to RESICO After Losing Eligibility?
Possibly, depending on the reason for leaving the regime.
Exceeding the income threshold is not necessarily equivalent to losing eligibility because of noncompliance.
The applicable legislation and administrative rules may allow reentry under certain circumstances.
However, taxpayers who lose eligibility because of failure to meet specific tax obligations may face additional restrictions.
Before attempting to return to RESICO, individuals should review their filing history, the reason for their departure, and the requirements applicable to the intended year of reentry.
13. Three Practical RESICO Examples
Case 1: US Software Developer Living in Mexico
A US citizen lives in Guadalajara and provides software development services to American companies.
Annual revenue: MXN $1.5 million.
The individual has established Mexican tax residency, does not own corporate shares, and receives no incompatible investment income.
Tax analysis: RESICO may be available if all statutory requirements are satisfied.
The foreign location of the customers does not automatically prevent eligibility.
VAT treatment must be analyzed separately.
Case 2: Canadian Consultant With Foreign Investments
A Canadian citizen becomes a Mexican tax resident and receives MXN $2 million annually from consulting activities.
The individual also owns shares in several foreign corporations through an international brokerage account.
Tax analysis: Although the consulting income is below the RESICO threshold, corporate share ownership creates a significant eligibility concern.
The investment portfolio must be reviewed before selecting RESICO.
Case 3: Freelancer Exceeding the Income Limit
An independent marketing professional initially expects annual revenue of MXN $2.8 million.
Several additional contracts increase revenue beyond MXN $3.5 million.
Tax analysis: The individual must evaluate the mandatory transition to the appropriate tax regime and comply with the corresponding tax calculations and reporting obligations.
Failing to identify the transition promptly can result in incorrect tax filings.
14. Frequently Asked Questions About RESICO in Mexico
Is RESICO available to foreigners?
Yes. Foreign nationals who qualify as Mexican tax residents may potentially use RESICO if they meet the applicable requirements.
Do I need Mexican citizenship to qualify?
No. Mexican citizenship is not required. Tax residency and statutory eligibility are the relevant considerations.
Can I use RESICO if all my clients are in the United States?
Yes, potentially. The foreign location of customers does not automatically prevent eligibility.
Can I receive payments in US dollars?
Yes. Foreign-currency income must be properly documented and converted for Mexican tax purposes.
Is RESICO income tax really only 1% to 2.5%?
Yes, for qualifying individual RESICO income. VAT and other applicable tax obligations must be considered separately.
Do RESICO taxpayers need to file an annual income tax return in 2026?
Generally, qualifying taxpayers are exempt from filing an annual return for their RESICO income under Rule 3.13.7 of the 2026 Miscellaneous Tax Resolution.
What if I receive RESICO income and employment income?
You must separately evaluate the annual filing requirements applicable to your employment income.
Receiving both types of income does not automatically eliminate the annual filing relief for RESICO income.
Can I request a RESICO tax refund without filing an annual return?
Yes, where the applicable requirements are satisfied. Rule 3.13.34 establishes a procedure for requesting qualifying RESICO income tax refunds.
Is an e.firma mandatory for RESICO in 2026?
Yes. Taxpayers must comply with the electronic signature requirement, including the applicable two-month period for individuals entering the regime under Rule 3.13.33.
Can I own a US LLC and qualify for RESICO?
Ownership of an LLC may create significant eligibility concerns. The legal structure, ownership rights, and applicable Mexican tax provisions must be evaluated.
Can I own ETFs while using RESICO?
It depends on the legal characteristics of the instruments. Certain structures may create corporate ownership or income classification issues.
Can I receive interest income under RESICO?
Certain interest income may coexist with RESICO under the applicable statutory conditions.
Can I receive dividends under RESICO?
Dividend income and the underlying ownership of corporate shares require careful analysis. In many cases, the share ownership itself may create a RESICO eligibility restriction.
Can I use RESICO while working through Upwork or Fiverr?
Potentially. The contractual relationship, classification of the income, invoicing obligations, and applicable digital platform provisions must be examined.
Do I need Mexican invoices if my clients are foreign?
Generally, yes. Mexican taxpayers must comply with applicable CFDI invoicing requirements, including for foreign-customer transactions.
Is RESICO the same as a digital nomad visa?
No. RESICO is an income tax regime, not an immigration category. Immigration authorization and tax residency are separate legal concepts.
Is the RESICO income limit MXN $5 million in 2026?
No. The applicable statutory threshold for 2026 remains MXN $3.5 million. Proposed changes for future years should not be treated as effective legislation until formally enacted.
15. Is RESICO the Best Tax Regime for Foreigners Living in Mexico?
RESICO can provide substantial income tax savings for qualifying individuals, particularly those providing professional services with limited operating expenses.
However, the decision should never be based exclusively on the attractive tax rates.
Before selecting RESICO, foreign residents should evaluate:
- Their Mexican tax residency status.
- Their worldwide income sources.
- Their ownership interests in foreign companies.
- Their investment portfolios.
- Their projected annual revenue.
- Their VAT obligations.
- Their foreign tax reporting requirements.
- Their eligibility under Mexican tax legislation.
A regime that initially appears beneficial can create significant tax exposure if the taxpayer does not satisfy the legal requirements.
RESICO is not simply a low-tax option. It is a preferential tax regime with specific eligibility conditions that must be respected.
16. Professional RESICO Tax Advisory in Mexico
At TAX ID Mexico, we assist foreign nationals, independent professionals, freelancers, and international business owners with Mexican tax residency and compliance matters.
Our services include:
- RESICO eligibility assessments.
- Mexican tax residency analysis.
- Foreign income and investment reviews.
- Tax registration and compliance guidance.
- Electronic invoicing (CFDI) advisory.
- Monthly tax filings and applicable annual compliance.
- Transitions between Mexican tax regimes.
- Cross-border tax advisory.
We also assist individuals with international financial arrangements, including foreign companies, investment accounts, and income received through international payment platforms.
Considering RESICO in Mexico?
Before registering or changing your tax regime, it is important to determine whether you qualify and understand how your international financial situation may affect your eligibility.
Contact TAX ID Mexico for a personalized tax assessment.
Website: https://taxid.mx
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