Withholding calculator for ISR and VAT.
Professional fees, rent, RESICO and freight paid by legal entities in Mexico: subtotal, VAT charged, ISR and VAT withheld and the amount to pay, with the rates that go on the CFDI and their legal basis.
Result
Subtotal $10,000.00. VAT charged $1,600.00. ISR withheld $1,000.00. VAT withheld $1,066.67. Amount to pay (CFDI total) $9,533.33.
- Subtotal
- $10,000.00
- VAT charged 16%002 IVA · 0.160000
- + $1,600.00
- ISR withheld 10%001 ISR · 0.100000
- − $1,000.00
- VAT withheld 10.6667%002 IVA · 0.106667
- − $1,066.67
- Amount to pay (CFDI total)
- $9,533.33
Legal basis
- 10% ISR: Income Tax Law (LISR) art. 106, fifth paragraph.
- 2/3 VAT withheld: VAT Law (LIVA) art. 1o.-A, sec. II, (a); VAT Regulations (RLIVA) art. 3, sec. I.
For information only, with the 16% general VAT rate. It does not replace advice from your accountant.
How it's calculated
Withholdings are calculated on the subtotal (the amount before VAT) and subtracted from the CFDI total.
Formulas
- VAT charged
- VAT = Subtotal × 0.16
- ISR withheld
- Fees and rent: Subtotal × 0.10RESICO: Subtotal × 0.0125
- VAT withheld
- Two thirds: Subtotal × 0.106667Freight: Subtotal × 0.04
- Amount to pay
- Subtotal + VAT − ISR w/h − VAT w/h
- Rounding
- Each amount to 2 decimals; half a cent rounds up
Legal basis
10% ISR on professional fees
Legal entities that pay individuals for professional services withhold 10% of the payments as a provisional payment, with no deductions.
Source:Income Tax Law (LISR), art. 106, fifth paragraph (opens in a new tab)
10% ISR on real estate rent
Legal entities that pay rent for real estate to individuals withhold 10% of the payments as a provisional payment, with no deductions.
Source:Income Tax Law (LISR), art. 116, fifth paragraph (opens in a new tab)
1.25% ISR for individuals under RESICO
When an individual under the Simplified Trust Regime (RESICO) carries out business or professional activities, or grants the use of property, for a legal entity, the entity withholds 1.25% of the payments, excluding VAT.
Source:Income Tax Law (LISR), art. 113-J (opens in a new tab)
VAT withheld: two thirds (10.6667%)
Legal entities withhold the VAT charged to them by individuals for independent personal services or for the use of property. The regulations reduce the withholding to two thirds of the VAT charged: 16% × 2/3 = 10.6667%. It does not apply to sales of goods or to services that are a business activity.
Source:VAT Law (LIVA), art. 1o.-A, sec. II, (a) (opens in a new tab)VAT Regulations (RLIVA), art. 3, sec. I (opens in a new tab)VAT Law (LIVA), art. 14, last paragraph (opens in a new tab)
4% VAT withheld on ground freight
Legal entities that receive ground freight transportation services, from individuals or legal entities, withhold 4% of the value of the service.
Source:VAT Law (LIVA), art. 1o.-A, sec. II, (c) (opens in a new tab)VAT Regulations (RLIVA), art. 3, sec. II (opens in a new tab)
When it's withheld and paid to the SAT
VAT is withheld at the time of payment, on the amount actually paid, and remitted no later than the 17th of the following month. ISR withholdings are remitted by the same deadline.
Source:VAT Law (LIVA), art. 1o.-A, second-to-last paragraph (opens in a new tab)Income Tax Law (LISR), arts. 96, 106, 113-J and 116 (opens in a new tab)
For information only. It covers the common cases with the 16% general VAT rate; it does not cover the border region, commission agents, scrap or other withholding cases. It does not replace advice from your accountant.
Frequently asked questions
Common questions when invoicing with withholdings in Mexico.
When is VAT withheld on professional fees?
When a legal entity pays an individual for professional services: it withholds two thirds of the VAT charged, that is, 10.6667% of the subtotal, plus 10% ISR. If the payer is an individual, these withholdings don't apply.
Why is the VAT withholding 10.6667%?
Because it's two thirds of 16%: 16% × 2/3 = 10.6667%. The VAT Regulations allow withholding that amount instead of the full VAT. On the CFDI it's recorded with TasaOCuota 0.106667 and the amount is the base times that rate, rounded to the cent.
How much does a legal entity withhold from a RESICO individual?
1.25% ISR on the payment before VAT. For professional services or rent, it also withholds two thirds of the VAT (10.6667%). There is no VAT withholding on sales of goods.
What withholdings apply to a freight invoice?
If the customer is a legal entity, it withholds 4% of the freight value as VAT, whether the carrier is an individual or a legal entity. If the carrier is an individual under RESICO, 1.25% ISR is also withheld.
How do I know how much to invoice to receive a given net amount?
Choose “From the net to receive” and enter the amount. The calculator finds the subtotal that, with VAT and withholdings rounded to the cent, gives exactly that net; if there isn't an exact one, it shows the closest.
Does this calculator replace my accountant?
No. It does the arithmetic for the common cases with the 16% general rate, but it does not determine your tax regime, whether your transaction is subject to VAT, or other withholding cases such as the border region. Ask your accountant for that.
More tools
- VAT (IVA) calculatorAdd or back out Mexican VAT at 16% or the 8% border-region rate, to the cent.
- Verify a CFDI with the SATCheck whether an invoice is active or canceled using the SAT's public service.
- SAT catalogsProduct and service keys, units, tax regimes, CFDI uses and the rest of the official catalogs.catalogoscfdi.com(opens in a new tab)
- Validate an RFCCheck the structure and check digit of an RFC (Mexican tax ID) before invoicing.catalogoscfdi.com(opens in a new tab)
- How to fill out a CFDI 4.0Field-by-field guide to the invoice, with the catalogs that apply to each one.catalogoscfdi.com(opens in a new tab)
- CFDI use by tax regimeWhich CFDI uses each recipient tax regime accepts.catalogoscfdi.com(opens in a new tab)
Issue your CFDI with these withholdings worked out.
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