Owning a business in Mexico comes with distinct tax obligations that foreign and local entrepreneurs must understand. The Mexican tax system may seem complex, but this guide will help you navigate the essential requirements for compliance.

1. Income Tax (ISR)
   All businesses in Mexico, including those owned by foreigners, must pay income tax (ISR). The ISR rate varies depending on the type and scale of the business, and an accountant can help you accurately calculate and report these taxes.

2. Value-Added Tax (IVA)
   Most goods and services in Mexico are subject to a 16% VAT (IVA). Business owners are responsible for charging and remitting IVA on sales. Understanding the details of IVA will help in pricing and profit calculations.

3. Payroll Taxes
   If you employ workers in Mexico, you must contribute to payroll taxes, including social security and housing funds for your employees. Ensuring compliance with payroll obligations helps you avoid legal penalties.

4. Monthly and Annual Declarations
   Mexican businesses must file monthly and annual tax returns, reporting income, expenses, and IVA. The tax authority, SAT, requires these regular filings to stay compliant and avoid fines.

5. Working with a Tax Advisor
   Hiring an experienced tax advisor familiar with Mexican business taxes can make compliance easier. They can guide you through complex regulations and ensure accurate, timely filings.

With a thorough understanding of these tax requirements, business owners can confidently operate in Mexico, knowing they are fulfilling all legal obligations.