Tax Reform Initiative 2026: Impacts and opportunities

It is important to note that the proposed provisions may still be subject to modifications during the approval process. Currently, the Economic Package presented by the Federal Executive has been referred to the relevant legislative committees for analysis, discussion, and ruling. The deadline to approve the Revenue Law, Federal Rights Law, and Fiscal Miscellaneous legislation is 20 October, with the opinion to be forwarded to the Senate, which has until 31 October for approval. Once approved by the Senate, the bill will be sent to the Federal Executive for promulgation and publication in the Official Gazette of the Federation within 20 calendar days after congressional approval.  

Below are the most relevant topics of this reform initiative:

Revenue Law of the Federation 

Healthy taxes

Proposed to establish taxes focused on public health to discourage the consumption of products that harm physical and mental health. 

Excise Tax (IEPS) 

• Flavoured drinks: increase to MXN 3.0818 per litre, including those with any non-caloric sugars.  
• Milled tobacco: increase rate from 160% to 200%, with gradual increases until 2030 and a transitional period from 2026 to 2029.  
• Handmade tobacco: increase rate to 32%.  
• Digital services for violent content in video games: special tax of 8%.  
• Wagering: tax of 30% to 50% on the total amount wagered or effectively received. 

Financial sector 

To prevent alleged distortions in the Income Tax base and avoid abuse, the following measures are proposed for the financial sector: 

• Contributions to the Bank Deposit Protection Fund (FOBAPROA for its acronym in Spanish): 
  In terms of Income Tax (ISR), it is proposed that multipurpose banks can no longer deduct 75% of their contributions to the Bank Deposit Insurance Institute (IPAB). Only a quarter of these contributions would remain deductible for tax purposes. 
• Deduction of uncollectible loans for credit institutions: 
  Align the tax treatment of uncollectible loans for credit institutions with that of other taxpayers by eliminating the special regime in Article 27 of the Income Tax Law (LISR). Practically, banks would be subject to the same rules as any other company when deducting such losses.

Facilitation of oversight 

Based on positive results in previous exercises, the following measures are proposed to aid oversight processes: 

Digital intermediation platforms 

Unify and adjust withholding rates applicable to income obtained via digital platforms, considering taxpayer type and fiscal situation: 

• Individuals: 
  • Unify the withholding rate with the maximum in RESICO: 2.5%. 
  • These withholdings are considered provisional payments and can be credited in the annual tax return. 
  • Review certificates issued by the platform to validate withheld amounts. 
• Legal entities: 
  • 4.0% withholding if they provide their RFC (tax identification number). 
  • 20.0% withholding if they do not provide RFC. 
• VAT: 
  • 8% withholding when RFC is available. 
  • 16% withholding when RFC is unavailable. 
• Foreign residents without a presence in Mexico: 
  • 16% withholding on: 
    • Operations in the national territory. 
    • Payments received into foreign bank accounts. 

FinTech 

It is proposed that Collective Financing Institutions comply with the obligation to withhold and remit ISR and VAT for participating operations. 

Tax Regularisation Programme 

The programme for regularising physical and legal persons will continue, with the following considerations: 

• The reference fiscal year will be 2024 only.  
• The total income limit will increase to MXN 300 million. 

Individuals: 

• The applicable exercise is 2024. 
• It is recommended to evaluate balances, deductions, and documentation prior to participating. 
• The proposed cap is up to MXN 300 million in total income.

Other relevant provisions 

Provisional withholding rate on interest income 

For the 2026 fiscal year, it is proposed to establish a fixed provisional withholding rate of 0.90%, applicable to the principal amount that generates interest payments. This measure is based on macroeconomic and market expectations projected by both the private sector and the Federal Government. 

Individuals: 

• If approved, financial institutions would apply an annual withholding of 0.90% on the capital that generates interest. 
• This amount would be considered a provisional payment, creditable in the annual tax return (real interest). 
• If the proposal is not approved, the current rate would remain in effect. 

Surcharge rate for the payment of tax liabilities 

It is proposed to set the monthly surcharge rate on outstanding balances at 1.38%. Additionally, the following rates are established for deferred payments: 

• 1.42% monthly for terms of up to 12 months. 
• 1.63% monthly for terms exceeding 12 months and up to 24 months. 
• 1.97% monthly for terms longer than 24 months. 

Individuals: 

• In cases of instalments or deferrals, these rates directly affect the financial cost of the debt. 
• It is recommended to estimate cash flow before opting for a deferred payment scheme. 

Measures to strengthen competitiveness and development 

Starting in 2026, the government aims to implement new measures to reinforce the economy and keep Mexico competitive at an international level. These actions include: 

• Support for strategic sectors to prevent them from falling behind other countries. 
• Tax reforms to facilitate the arrival of both domestic and foreign investment, focused on growth and job creation projects. 
• Continuation of incentives for cultural, artistic, and sporting activities, with the aim of promoting the talent of Mexican men and women. 

General Import Tax 

As part of the Plan México, this tax will be reviewed to strengthen a home-grown economic model that: 

• Drives the growth of strategic sectors. 
• Enhances the country’s competitiveness.

Change in basis and withholding rate for securities lending transactions 

It is proposed that, instead of taxing the total amount lent in securities transactions, the tax be applied solely to the profit earned by the lender — that is, the premium received as payment. 

Adjustments to the tax incentive for foreign legal entities 

It is proposed to amend the rules to facilitate the application of tax benefits for foreign companies managing private equity investments, with the aim of encouraging their participation in Mexico. 

Repatriation of capital 

A benefit is proposed for individuals and companies that repatriate legally held funds from abroad to Mexico by 8 September 2025. These amounts may: 

• Be taxed at a reduced rate of 15%, with no deductions. 
• Be allocated to productive activities within the country. 
• Remain invested for a minimum of three years.

Tax incentives: Articles 189, 190 and 203 of the Income Tax Law (LISR) for 2026 

• The aim is to continue existing tax support for the film industry, updating it to authorise greater resources for these projects. 
• The intention is to reactivate the tax incentive for high-performance sport. 
• Limits will be established for amounts that may be allocated to the construction or improvement of specialised sports facilities 

Book donations 

To deduct books that no longer hold value, it will be proposed that they first be offered for donation to: 

• Public institutions. 
• International organisations. 
• Authorised associations. 

Only if they are not accepted may they be disposed of or destroyed.

Provisions for the FIFA World Cup 2026 

It is proposed that individuals and companies involved in the organisation and execution of events related to the FIFA World Cup 2026: 

• Be exempt from taxes. 
• Not be subject to additional procedures. 

This is intended to facilitate their participation in this international event. 

Federal Fiscal Code (CFF) 

False tax receipts 

Various reforms to the Federal Fiscal Code (CFF) are proposed to strengthen the fight against false tax receipts. Key measures include: 

• Empowering the SAT to deny RFC registration to companies whose representatives or partners have been linked to sanctioned entities. 
• Adding to Article 29-A that CFDIs may only support real and genuine transactions. 
• Creating a new Article 29-A Bis, allowing the authority to verify the authenticity of tax receipts without the need to exhaust additional procedures. 
• Amending Section V of Article 42 to enable direct verification of CFDI authenticity during home visits and the detection of false invoices 

Identity verification  

It is proposed to amend the final paragraph of Article 17-F of the CFF to remove the reference to “user identity verification.” 

This change would establish that only the SAT is authorised to validate taxpayer identity when using the e.signature, thereby ensuring legal certainty and preventing third parties from accessing or misusing personal information.

Simplification for RESICO taxpayers 

A reform to Article 17-H Bis of the CFF is proposed to exempt taxpayers under the Simplified Trust Regime (RESICO) from the obligation to file the annual tax return required by Articles 113-E, 113-F, and 113-G of the Income Tax Law (LISR). 

With this change, they would only need to make the monthly payments set out in Article 113-E, which would be considered final, reducing their tax burden and simplifying compliance with the SAT. 

Deadline for cancelling CFDIs 

A reform to Article 29-A of the CFF is proposed to explicitly establish that taxpayers may cancel their CFDIs up to the month in which they file their annual income tax return. 

This measure aims to provide legal certainty to a facility currently only covered by Rule 2.7.1.46 of the 2025 RMF. 

Administrative review or reconsideration 

A reform to Article 36 of the CFF is proposed to strengthen the process by which the SAT may review and correct its own resolutions in cases where taxpayers can no longer file a defence or have missed the legal deadline to do so. 

Reduced penalty for RESICO taxpayers 

It is proposed to amend Article 84, Section IV, Subsection b) of the CFF so that RESICO taxpayers receive the same reduced penalty currently applied to those under the Tax Incorporation Regime (RIF), considering their income levels. 

Notification deadline 

Currently, the CFF sets a 3-day deadline for tax notifications. However, in practice, notifications via the tax mailbox, public notices, or edicts often exceed this limit. 

Therefore, it is proposed to amend Articles 145, 151, 156-Bis, and 156-Ter of the CFF to extend the deadline to 20 working days for non-personal notifications, providing greater certainty and realism to these procedures. 

Temporary Restriction of Digital Seal Certificates (CSD)  

A new Section XII is proposed for Article 17-H Bis of the CFF, allowing the SAT to temporarily restrict CSDs when: 

• The taxpayer has outstanding confirmed tax debts, and 
• In the previous year, issued invoices amounting to four times the value of those debts. 

This measure is considered proportionate and constitutionally valid.  

Additionally: 

• Section XIII is proposed to combat the improper sale of hydrocarbons when incorrect data is used in CFDIs. 
• Section IX of the same article is to be amended to align foreign trade audits and restrict CSDs when inventory control systems fail to comply with Article 59 of the Customs Law. 

Financial institutions other than banks 

In light of technological advances and the growth of the Fintech sector, various reforms to the CFF are proposed to reflect this reality: 

• In Article 17-H Bis, Section VII, the term “banking” is replaced with “financial,” recognising that deposit accounts now exist beyond traditional banks. 
• Article 45 expands the authority of tax officials to review account statements from any financial institution. 
• Article 48 allows the SAT to request account information from all types of financial entities, not just banks. 
• Article 59, Section III, provides that deposits detected in these accounts be considered taxable income, unless proven otherwise by the taxpayer. 

RFC cleansing 

A reform to Article 27, Sections XII and XIII of Section C of the CFF is proposed to: 

• Clarify the circumstances under which the SAT may suspend activities or reduce a taxpayer’s obligations. 
• Establish clearer rules for cleansing the register of inactive taxpayers. 
• Prevent fraud, such as identity theft, and misuse of CFDIs. 

Combatting improper practices in legal appeals 

A new Section X is proposed for Article 124 of the CFF to prevent taxpayers from using the appeal process by claiming they were “unaware” of the contested act. 

The SAT has identified this tactic as a strategic delay mechanism, even when evidence shows the taxpayer was informed. This forces the authority to repeat notifications and leads to excessive use of the appeal process. 

For further information, our team of tax specialists is ready to provide fiscal, technical, and strategic advice to help you efficiently and promptly navigate the changes brought about by the 2026 Tax Reform.