Residence and cross-border personal income

Home and vital interests

A home in Mexico establishes residence. With homes in Mexico and another country, the centre of vital interests controls; examples include more than half of annual income coming from Mexican sources or the principal professional-activity centre being in Mexico.

Nationality is not the whole test

Mexican nationality creates a rebuttable residence presumption. Mexican-national state officials and workers remain resident even with vital interests abroad; this is not a universal citizenship-based tax rule.

Worldwide versus source-based taxation

Residents are taxable on income regardless of source. Nonresidents are taxable on income attributable to a Mexican permanent establishment and on Mexican-source income without such an establishment or not attributable to it.

Residence does not end just by leaving

Failure to prove new foreign tax residence, or moving to a preferential regime, can retain Mexican residence for the notice year and five following fiscal years. The foreign-residence exception requires both broad information exchange and the specified mutual-assistance treaty. Departure notice is required within the 15 days immediately before the change; omitting it retains residence.

Treaties and foreign-tax credits

Treaty benefits require residence evidence and satisfaction of treaty and procedural conditions. Foreign income tax on income also taxable in Mexico may be credited subject to statutory limits, including country-by-country limits for individuals and supporting payment evidence; the full foreign bill is not automatically creditable.