How to File the Mexican Annual Tax Return

Filing an annual tax return in Mexico, known as the Declaración Anual, is a yearly obligation for many individuals and is managed by the tax authority, the Servicio de Administración Tributaria (SAT). The process involves determining who must file, gathering documents, submitting the return online, and handling any resulting payments or refunds.

Determining Your Filing Requirement in Mexico

An individual’s requirement to file a Mexican tax return depends on their residency status and income sources. A person is considered a tax resident if their primary home is in Mexico, their “center of vital interests” is located there, or they spend more than 183 days in Mexico within a calendar year. A center of vital interests means more than 50% of income is from Mexican sources or their main professional activities are in the country.

Tax residents must file an annual return if their worldwide income for the year exceeds MXN 400,000. This obligation also applies to residents earning less than this amount if they had more than one employer or received income from sources other than employment, such as professional fees, rental income, or business activities.

Non-residents have a more limited filing requirement, as they are only taxed on income earned from Mexican sources. This includes income from the sale of real estate located in Mexico or from selling shares of a Mexican company. The tax year in Mexico aligns with the calendar year, from January 1 to December 31, and the filing deadline for individuals is April 30 of the following year.

There are specific exceptions to these rules. Residents who earn only interest income from the Mexican banking system that is below a certain amount may not be required to file. An individual whose sole income is from a single employer and below the MXN 400,000 threshold might be exempt if the employer correctly withheld all taxes. Individuals in the Simplified Trust Regime (RESICO) are also not required to file an annual return.

Separate from income tax, taxpayers must inform the tax authority of certain financial receipts. This includes reporting loans, donations, and prizes if the total amount, either individually or combined, exceeds MXN 600,000. If total annual income is over MXN 500,000, it is necessary to report income from the sale of a primary residence, inheritances, or prizes, even if these are not taxable.

Information and Documents for Filing

A fundamental requirement for filing is the Registro Federal de Contribuyentes (RFC), a unique tax identification number assigned by the SAT. An RFC is necessary for nearly all financial activities in Mexico, including opening bank accounts, and it is the primary identifier used to access the tax portal.

Another requirement for submitting the return is the electronic signature, or e.firma. This is a secure digital file that functions as a legal, electronic equivalent of a physical signature and is required to finalize the annual tax return submission. The e.firma is obtained through an in-person appointment at a SAT office.

You will need to collect all relevant financial records for the tax year. This includes income statements, known as constancias de percepciones y retenciones, provided by employers, which detail earnings and taxes withheld. Bank statements are also needed to provide the 18-digit CLABE number for any potential refund, and records of any income earned from foreign sources must be compiled.

Organizing deductible expenses can reduce your overall tax liability. To claim these deductions, you must have an official electronic invoice, a Comprobante Fiscal Digital por Internet (CFDI) or factura, for each expense. Common personal deductions include:

• Medical and dental fees
• Specific educational expenses
• Mortgage interest payments
• Charitable donations

A valid factura must contain your RFC, clearly describe the service or product, and have been paid for using electronic means such as a credit card, debit card, or bank transfer rather than cash.

Step-by-Step Guide to Submitting Your Return

The process of submitting the Declaración Anual is done entirely online through the SAT’s official web portal. First, access the site and log in using your RFC and password. Once logged in, navigate to the section for declarations and select the option for the annual return for individuals.

Upon entering the annual return section, the system presents a pre-filled return, or propuesta. This version is automatically populated with information that the SAT has already collected throughout the year from employers and from electronic invoices (CFDIs). You must carefully review all the pre-filled data, including income, withholdings, and potential deductions, to ensure its accuracy.

If the pre-filled information is incorrect or incomplete, you have the ability to modify it. The platform allows for the manual addition of income sources that may not have been automatically captured. You can also include deductible expenses that were not pre-loaded by entering the details for each deduction you wish to claim.

After verifying, correcting, and adding all necessary information, the final step is to submit the return. The system will require you to sign the declaration electronically using your e.firma. Once signed and submitted, the portal will generate an official acknowledgment receipt, the acuse de recibo, which serves as proof that you have filed and should be saved for your records.

Managing Tax Payments and Refunds

After submitting the annual tax return, the result will be either a tax liability (a balance due) or a tax refund (a saldo a favor). If you have a balance due, it means the tax paid during the year was less than your total calculated tax liability. The SAT portal will automatically generate an official payment form with a capture line (línea de captura) for making the payment.

This payment can be made through the online portals of authorized Mexican banks or directly at a bank branch. If the annual return results in a balance due, the taxpayer has the option to pay the amount in up to six monthly installments. The deadline for paying the full amount or initiating these payments is April 30, and failure to pay by this date can result in surcharges and penalties.

Conversely, if your return results in a saldo a favor, you are entitled to a refund. During the filing process, you are asked to confirm or provide your 18-digit bank CLABE number. If you select the option for an automatic refund (devolución automática) and the SAT’s review finds no inconsistencies, the refund is deposited directly into the specified bank account.

The timeline for receiving an automatic refund can vary but often occurs within a few weeks of filing. In some cases, the automatic refund may be rejected or the option may not be available. If this happens, you must initiate a manual refund request (devolución manual) through the SAT portal, which may require providing additional documentation to support the refund claim.