In January 2022, SAT (Servicio de Administración Tributaria), Mexico’s tax authority, rolled out a new, simplified tax regime known as RESICO (Régimen Simplificado de Confianza) to reduce the tax liability for individuals earning less than $3,500,00 MXN per year. There are strict requirements to qualify under this new tax regime and a deadline was set for December 31, 2022 to meet some of these requirements, including registering and receiving an electronic signature (e.firma) and the ability to issue CFDIs (electronic invoices) for payroll. However, it was recently announced they will be extending the deadline to March 31, 2023.
Who is eligible for this simplified tax regime?
RESICO is available for any individuals who earn less than $3,500,000 MXN per year from the following activities:
- Business and professional activities
- Tax Incorporation Regime
- Use or enjoyment of real estate (lease)
- Agricultural, Livestock, Fishing or Forestry Activities
This does not include salaried workers. They will continue to to fall under the Wage and Salary Regime.
Who is NOT eligible for this simplified tax regime?
Individuals who are partners of a company, individuals part of a legal entity, individuals who are residents abroad and individuals whose income is greater than 3,500,000 (three million five hundred thousand pesos 00/100 M.N.) are not eligible for this simplified tax regime.
What are the tax rates for individuals in this tax regime?
When filing under the RESICO regime, it is important to issue invoices electronically (CFDI) for all income received during the month. The following month, the income declaration must be filed and any tax due must be paid. The income will be based on the electronically filed invoices created the previous month.
The tax rates are as follows, are based on monthly income, and monthly declarations should ideally be made by the 17th of the following month:
Up to 25,000 pesos – 1%.
Up to 50,000 pesos – 1.10%.
Up to 83,333.33 pesos – 1.50%.
Up to 208,333.33 – 2 %
Up to 3,500,000 pesos – 2.50%
If services are being provided to a legal entity, appropriate withholdings should be made when issuing the electronic invoice. The ISR withholdings in this case would be 1.25%
In addition to monthly filings, individuals must file an annual return in April of the following year. In the annual return, the total income declared on the monthly returns is used and the annual income would be subject to the following tax rates:
Up to 300,000 – 1%.
Up to 600,000 – 1.10%.
Up to 1,000,000 – 1.50% Up to 2,500,000 – 2%.
Up to 2,500,000 – 2%.
Up to 3,500,000 – 2.50% Up to 3,500,000 – 2.50%.
Other important information
The only income that would not be considered within the $3,500,000 MXN maximum would be the following:
- Disposal of a dwelling house
- Seniority premiums
- Severance payments
In the event that an individual’s income is greater than 3,500,000 (three million five hundred thousand pesos 00/100 M.N.) during the accounting year, or that 3 monthly returns are not filed on time and correctly, the individual will cease to be taxed under this regime.
Did RESICO replace another tax regime?
The RESICO (Régimen Simplificado de Confianza) replaced RIF (Régimen de Incorporación Fiscal), and all individuals that were previously filing as RIF had the option to change to RESICO.