If you are a foreigner running a business in Mexico or working independently, you need to understand the annual tax return. This process may seem complicated, but with the right information, it’s easier than you think. In this guide, we explain in a clear and engaging way what you need to know about the 2025 annual tax return for individuals with business activities.
1. What is the annual tax return, and who must file it?
It is a mandatory report that individuals must submit to the SAT (Tax Administration Service) each year, detailing their income, deductions, and calculation of Income Tax (ISR). If you are a foreigner residing in Mexico with business activities, professional fees, or rental income, you are likely required to file it.
2. Key dates for 2025
The deadline to submit the annual tax return is April 30, 2025. Avoiding last-minute filing is crucial to preventing errors or penalties.
3. Required documents and information
– RFC and SAT password (or e.signature)
– Proof of income and expenses (invoices, Bank statements,etc)
– Personal Deductitions (medical fees, tuition, donations, etc.) are specific expenses that individuals can subtract from their gross income when filing their annual tax return. This lowers the amount of income subject to taxation. They are strictly regulated by Mexico’s tax authority (SAT) and require proper documentation, including valid invoices (CFDI) and approved electronic payment proofs.
– Monthly tax returns and provisional payments
4. Benefits of filing your tax return correctly
– Possible tax refund
– Avoiding fines and tax issues
– Maintaining a clean and organized financial record.
– Proper filing leverages all available deductions, helping you save money by avoiding overpayment of taxes.
– Achieves a sense of security by ensuring full compliance with tax regulations and promoting sound financial planning
5. Common mistakes to avoid
– Not reviewing income reported by third parties (invoices issued to your RFC)
– Omitting allowable deductions
– Filing late
– Not updating your tax information
6. How can Mextax help you?
We know that the Mexican tax system can be challenging, especially for foreigners. At Mextax, we provide expert guidance to ensure your annual tax return is accurate, helping you take advantage of tax benefits and avoid any issues with the SAT.
Don’t let the annual tax return stress you out! Contact us and let the experts handle it for you.
