Mexico IVA Guide for Freelancers: Registration, CFDI, and Compliance

Mexico’s consumption tax is called IVA (Impuesto al Valor Agregado) — essentially VAT. The standard rate is 16%. All freelancers providing services in Mexico must understand RFC registration, electronic invoicing requirements, and SAT (tax authority) compliance.

The IVA Rate

Category	Rate
Standard rate	16%
Border zone rate	8% (northern border region)
Zero-rated	0% (exports, certain goods)
Exempt	No IVA

Most professional services are subject to 16% IVA. If you’re in the northern border zone (within 20km of the US border), the reduced 8% rate may apply.

Do You Need to Register?

Yes, always. Unlike some countries with registration thresholds, Mexico requires all individuals and businesses earning income to register with SAT (Servicio de Administración Tributaria) and obtain an RFC (Registro Federal de Contribuyentes).

RFC: Your tax identification number, required on all invoices.

Tax Regimes for Freelancers

Mexico has several tax regimes. The two most relevant for freelancers:

RESICO (Régimen Simplificado de Confianza)

Simplified regime for small taxpayers:

Annual income up to MXN 3.5 million (approximately USD 200,000)
Reduced ISR (income tax) rates: 1% to 2.5% based on monthly income
Must issue CFDI invoices
IVA still applies at standard rate

Best for: Most individual freelancers under the income limit.

Régimen de Actividades Empresariales y Profesionales

Professional activities regime:

No income limit
ISR rates from 1.92% to 35% on net profit
Can deduct business expenses
Full IVA and ISR obligations

Best for: Higher-earning freelancers or those with significant deductible expenses.

Electronic Invoicing — CFDI

Mexico requires electronic invoices (CFDI — Comprobante Fiscal Digital por Internet) for all transactions. Paper invoices are not valid.

To issue CFDI, you need:

RFC registration with SAT
e.firma (electronic signature certificate)
Digital seal certificate (CSD)
Authorized invoicing software or SAT’s free portal

What Goes on a CFDI

Field	Description
RFC emisor	Your RFC number
Nombre emisor	Your legal name
Régimen fiscal	Your tax regime code
RFC receptor	Client’s RFC
Nombre receptor	Client’s name
Uso CFDI	How the client will use the invoice (e.g., G03 for general expenses)
Clave de producto/servicio	SAT product/service code
Descripción	Service description
Importe	Amount before IVA
IVA	16% IVA amount
Total	Total including IVA
Método de pago	Payment method code
Forma de pago	How payment was made
UUID	Unique folio assigned by SAT

CFDI Use Codes (Uso CFDI)

Common codes your clients may request:

G01: Acquisition of goods
G03: General expenses (most common for services)
I04: Equipment and computers
P01: To be defined (when client doesn’t specify)

IVA Retention

When you invoice a company (persona moral), they typically withhold 2/3 of the IVA:

You charge	IVA 16%	MXN 1,600
Client retains	10.67%	MXN 1,067
Client pays you	5.33%	MXN 533

The retained IVA counts toward your IVA obligation — you report the full amount, and the retained portion is credited.

ISR Retention

Companies also withhold 10% ISR (income tax) on payments to freelancers:

Service amount	MXN 10,000
ISR retention (10%)	MXN 1,000
IVA retention (10.67%)	MXN 1,067
You receive	MXN 9,533

These retentions are credited against your annual tax obligations.

Export of Services

Services exported to foreign clients are zero-rated (tasa 0%):

Requirements:

Client must be a foreign resident (no RFC)
Services must be used abroad
Payment received in foreign currency

On the CFDI:

Use the generic foreign RFC: XEXX010101000
Set IVA rate to 0%
Include note: “Exportación de servicios — IVA tasa 0%”

Zero-rating means you don’t charge IVA, but you can still claim input IVA credits on your expenses.

Filing Obligations

Monthly

IVA declaration: Due 17th of following month
ISR provisional payment: Due 17th of following month

Annual

Annual ISR declaration: April (individuals)

Platform: SAT Portal

All filing is done through the SAT online portal using your e.firma or contraseña.

Common Mistakes

1. Not issuing CFDI. All income must have a CFDI. Cash payments still require invoices.

2. Wrong product/service code. SAT has thousands of codes — use the correct one for your service.

3. Missing retentions. If you invoice a company and they don’t withhold, they’re non-compliant. Factor this into your pricing.

4. Late filing. Monthly declarations are due by the 17th. Late filing incurs penalties and interest.

5. Incorrect RFC on foreign clients. Use the generic foreign RFC (XEXX010101000), not a made-up number.

Invoice Example

CFDI 4.0

Emisor:
RFC: XXXX900101XXX
Nombre: Juan García López
Régimen fiscal: 626 (RESICO)

Receptor:
RFC: ABC123456XYZ
Nombre: Empresa Cliente SA de CV
Uso CFDI: G03 (Gastos en general)

Concepto:
Clave: 80101500 (Servicios de consultoría de negocios)
Descripción: Consultoría de marketing digital
Cantidad: 1
Importe: MXN 15,000.00

IVA (16%): MXN 2,400.00
IVA Retenido (10.67%): MXN 1,600.00
ISR Retenido (10%): MXN 1,500.00

Total: MXN 14,300.00

Forma de pago: 03 (Transferencia)
Método de pago: PUE (Pago en una sola exhibición)

Wageasy and Mexican Invoicing

Wageasy helps you track your invoicing and payments. While CFDI must be issued through SAT-authorized systems, Wageasy helps you organize client billing, calculate IVA and retentions, and maintain records. Export your data for your accountant or CFDI system.

Download Wageasy →

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