Mexico Adopts 2026 Economic Package Containing Various Tax Measures

2 minutes

Mexico has adopted the Economic Package for fiscal year 2026 which was submitted earlier this year. The final version includes additional measures beyond those proposed in the initial draft. For previous reporting, seeEconomic Package for 2026: Executive Branch Proposes Amendments to Tax Incentives, New Obligations for Digital Platforms (12 September 2025).

The main changes concern measures related to excise taxes, real-time access to digital platforms information, and tax incentives for the insurance sector. They are as follows:

mexico national palace

Income Tax

Income derived by legal entities from the sale of goods and provision of services through digital platforms will be subject to a 2.5% withholding income tax (previously proposed as 4%).

VAT

  • A 0% VAT rate applies to women's menstrual products, such as panties, menstrual cups, and reusable or disposable menstrual discs).
  • Insurance companies (authorized by the National Insurance Commission) may consider creditable the input VAT incurred during the acquisition of goods or the provision of services until 31 December 2024, when compensating damages as required by insurance agreements. In addition, a tax incentive equivalent to the VAT credits is granted in certain circumstances.

Excise Taxes

  • Rates for manufactured cigars and tobacco have increased from 160% to 200%. For handmade cigars and tobacco, the rate has increased from 30.4% to 32%.
  • A gradual adjustment in the additional fees from 2026 to 2030 is proposed, which would go from MXN 0.8516 to MXN 1.1584 per cigar. From 2031 onwards, these fees would be adjusted by inflation.
  • Products containing nicotine (natural or artificial), including nicotine bags, will be taxed at a rate of 100% plus a specific fee.
  • Flavored beverages tax has increased from MXN 1.6451 per litre in 2025 to MXN 3.0818 in 2026. Imports and sales of beverages containing added sweeteners will be subject to a fee of MXN 1,500 per litre.
  • Gambling taxes are increased to 50% (previously, 30%), and online gambling carried out by non-residents are subject to 50% tax. Non-compliance will be penalized with a temporary block of the gambling platform.
  • Video games with violent content are now taxed at 8%, regardless whether they are provided by physical devices or digital downloads.

Federal Fiscal Code

The tax authority (Servicio de Administración Tributaria, SAT) may access real-time information from digital platforms to verify taxpayers' compliance with VAT obligations.

The Economic Package contains multiple laws that were published in the Official Gazette on 7 November 2025. They can be accessed here (in Spanish only): Federal Revenue Law, Federal Fiscal Code Reforms and Federal Law of Excise Duties.

Report from the IBFD Newsroom. Follow our reporting on this via our daily Tax News Service (subscribers only).

Corporate TaxationDigital EconomyIndirect taxationOther TaxesSpecific SectorsTariffsVAT/GSTWithholding Taxes

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