Which expenses are tax-deductible in Mexico (2026)

Types of tax deductions in Mexico

In Mexico there are two main categories of tax deductions:

• Personal deductions: available to all individuals when filing their annual tax return, regardless of tax regime.
• Business deductions: applicable to self-employed individuals, PFAE regime, and corporations.

The fundamental requirement for any deduction is having the corresponding CFDI (electronic invoice). Without an invoice, the expense is not deductible.

Personal deductions 2026: complete list

Personal deductions are applied in the annual tax return and directly reduce ISR payable. They are limited to the lesser of: 15% of total annual income or 5 UMA annually (approximately $176,000 MXN in 2026), except for medical insurance premiums and voluntary AFORE contributions which have no cap.

1. Medical and dental fees

• Doctor and dentist visits
• Hospitalization
• Clinical tests and diagnostic studies (labs, MRIs, X-rays)
• Prescription optical glasses (up to $2,500 MXN/year)
• Prosthetics and orthopedic devices
• Psychologists and nutritionists

Payments must be made by credit/debit card, bank transfer or check — cash is not deductible for medical expenses.

2. Major medical insurance premiums

Premiums paid for major medical insurance are 100% deductible, with no amount limit and not counting toward the 15% cap. Includes insurance for spouse, children and parents economically dependent on you.

3. Funeral expenses

Deductible up to 1 UMA annually (approximately $35,000 MXN in 2026).

4. Donations

Donations to SAT-authorized institutions are deductible up to 7% of the prior year's cumulative income.

5. Real interest on mortgage loans

Real (not nominal) interest paid on residential mortgage loans is deductible. The loan must have been granted by a Mexican financial institution and must not exceed 750,000 UDIS.

6. Voluntary pension contributions (AFORE)

Voluntary contributions to the retirement sub-account are deductible up to 10% of cumulative income, with a maximum of 5 UMA annually.

7. School tuition

Business deductions

If you have business activity (PFAE, General Regime, Persona Moral), you can additionally deduct business-related expenses, reducing your taxable profit.

Operating expenses

• Office or premises rent (with CFDI)
• Internet, phone and utilities (business use)
• Stationery and office supplies
• Salaries and wages (with payroll CFDI)
• IMSS and INFONAVIT contributions
• Fees to suppliers and subcontractors (with CFDI)

Transport and fuel

Fuel and vehicle expenses are deductible provided the vehicle is registered as a company asset and payments are made by card — not cash.

Fixed assets (depreciation)

• Computers: 30% per year
• Automobiles: 25% per year (up to $175,000 MXN cost)
• Office furniture: 10% per year
• Buildings: 5% per year

Note on RESICO: does it have deductions?

In RESICO for individuals, ISR is calculated on gross income at reduced rates (1%-2.5%), so there are no business expense deductions. However, you can still apply personal deductions in your annual return. This makes RESICO more convenient when business expenses are low. Contact us to analyze your specific situation.