The Mexican 2026 Economic Package (“tax reform”) approved by the Senate on 29 October 2025 introduces a series of measures focused on strengthening revenue collection and modernising the tax framework. Although the reform does not constitute a complete reconfiguration of the tax system, it includes significant adjustments for foreign investment, both in terms of capital repatriation and transparency of investment vehicles, and profound changes in the taxation of digital platforms (digital services) and cross-border services. Once enacted, the measures addressed below will become effective on 1 January 2026.
The most significant change in the tax reform regarding international matters is the modification of the digital platform regime. In 2020, Mexico introduced a framework to tax digital services provided by nonresidents without a permanent establishment (PE) in the country. However, in practice, deficiencies in control, auditing and compliance came to light, particularly regarding VAT registration and withholding.
The tax reform makes substantive adjustments aimed at strengthening the supervision of nonresident platforms facilitating the provision of goods and services to Mexican users, such as e-commerce, intermediation, streaming, transportation and lodging. The main additions are:
The tax reform introduces a new capital repatriation benefit designed to attract legally sourced funds maintained abroad and promote their reinvestment in Mexico. According to the Ministry of Finance, this incentive will allow individuals and legal entities (including foreign investors with a presence in Mexico) to return resources held abroad as of 8 September 2025 by paying a final income tax of 15%, without any deductions.
Terms and conditions will apply to access this benefit. Resources will need to be invested in productive activities for at least three years, including in industrial projects, the acquisition of fixed assets or investments related to “Plan Mexico,” the federal strategy for promoting industrial relocation. Mexico implemented a similar program in 2017 that had a preferential rate of 8% and a minimum investment period of two years.
This new framework marks a shift from earlier tax regularisation programs and focuses on productive reinvestment and job creation, reinforcing the confidence of foreign investors operating in Mexico.
Plan Mexico and the “Development Poles” remain instruments of economic policy complementary to the tax reform. These programs combine federal and local incentives, prioritising investments in infrastructure, manufacturing and electromobility. Previously, regional incentives operated independently through separate decrees, but the goal is now to consolidate the incentives under a national coordination framework focused on near-shoring and industrial relocation.
This integration consolidates Mexico’s standing as a strategic location for advanced manufacturing, with the northern and southern regions emerging as key areas for foreign direct investment inflows.
The tax reform includes measures to benefit legal entities and individuals participating in the organisation of the 2026 FIFA World Cup in Mexico.
Foreign investors, with or without a PE in Mexico, participating in the organisation and hosting of the World Cup, as well as related matches and events, will enjoy various tax benefits on income derived from such activities starting from the last quarter of the 2025 fiscal year. The benefits include a reduction of compliance obligations and, in certain cases, an income tax exemption. Details on the benefits are expected to be announced in early 2026. To qualify for the benefits, foreign entities will have to provide specific information about their organisation, details of the activities to be performed and the types of income involved.
The Mexican 2026 Economic Package offers foreign investors a combination of select incentives and new tax obligations. On one hand, the tax reform maintains or strengthens measures that seek to attract productive capital, such as the repatriation of funds, transparency of investment vehicles, benefits related to the FIFA World Cup and coordinated regional programs. On the other hand, the regulatory framework for digital platforms will become significantly stricter, raising compliance standards but also providing clearer rules.
Overall, these measures reflect a transitional fiscal strategy: Mexico advances toward a more controlled system aligned with international practices while maintaining its attractiveness as an investment destination. The challenge for foreign investors will be to adapt to the new regulatory environment without forfeiting operational agility, taking full advantage of the incentives that Mexico continues to offer to those who contribute to the long-term economic development of the country.
Rita Mireya Valdivia Hernandez
BDO in Mexico
Digital Platforms and Cross-Border Services
The most significant change in the tax reform regarding international matters is the modification of the digital platform regime. In 2020, Mexico introduced a framework to tax digital services provided by nonresidents without a permanent establishment (PE) in the country. However, in practice, deficiencies in control, auditing and compliance came to light, particularly regarding VAT registration and withholding.The tax reform makes substantive adjustments aimed at strengthening the supervision of nonresident platforms facilitating the provision of goods and services to Mexican users, such as e-commerce, intermediation, streaming, transportation and lodging. The main additions are:
- Extending the VAT withholding requirement to nonresidents selling goods in Mexico through digital platforms (VAT withholding currently only applies to services).
- Introducing a new electronic document requirement that evidences the withholding of tax.
- Introducing additional information requirements under which new data will be requested from nonresidents involved in the use of digital platforms, with specifics to be announced separately.
- Introducing an obligation for digital platforms to grant the Mexican tax authorities (SAT) real-time access to their transactions systems, which will allow the SAT to match that information with information reported. If discrepancies are identified, the SAT will be allowed to request clarifications and/or initiate an audit.
- Allowing the SAT to temporarily suspend digital platforms that fail to comply with their tax obligations.
Repatriation of Capital and Incentives for Productive Investment
The tax reform introduces a new capital repatriation benefit designed to attract legally sourced funds maintained abroad and promote their reinvestment in Mexico. According to the Ministry of Finance, this incentive will allow individuals and legal entities (including foreign investors with a presence in Mexico) to return resources held abroad as of 8 September 2025 by paying a final income tax of 15%, without any deductions.Terms and conditions will apply to access this benefit. Resources will need to be invested in productive activities for at least three years, including in industrial projects, the acquisition of fixed assets or investments related to “Plan Mexico,” the federal strategy for promoting industrial relocation. Mexico implemented a similar program in 2017 that had a preferential rate of 8% and a minimum investment period of two years.
This new framework marks a shift from earlier tax regularisation programs and focuses on productive reinvestment and job creation, reinforcing the confidence of foreign investors operating in Mexico.
Federal Coordination and Regional Incentives
Plan Mexico and the “Development Poles” remain instruments of economic policy complementary to the tax reform. These programs combine federal and local incentives, prioritising investments in infrastructure, manufacturing and electromobility. Previously, regional incentives operated independently through separate decrees, but the goal is now to consolidate the incentives under a national coordination framework focused on near-shoring and industrial relocation.This integration consolidates Mexico’s standing as a strategic location for advanced manufacturing, with the northern and southern regions emerging as key areas for foreign direct investment inflows.
FIFA World Cup Organisation Benefits
The tax reform includes measures to benefit legal entities and individuals participating in the organisation of the 2026 FIFA World Cup in Mexico.Foreign investors, with or without a PE in Mexico, participating in the organisation and hosting of the World Cup, as well as related matches and events, will enjoy various tax benefits on income derived from such activities starting from the last quarter of the 2025 fiscal year. The benefits include a reduction of compliance obligations and, in certain cases, an income tax exemption. Details on the benefits are expected to be announced in early 2026. To qualify for the benefits, foreign entities will have to provide specific information about their organisation, details of the activities to be performed and the types of income involved.
BDO Insight
The Mexican 2026 Economic Package offers foreign investors a combination of select incentives and new tax obligations. On one hand, the tax reform maintains or strengthens measures that seek to attract productive capital, such as the repatriation of funds, transparency of investment vehicles, benefits related to the FIFA World Cup and coordinated regional programs. On the other hand, the regulatory framework for digital platforms will become significantly stricter, raising compliance standards but also providing clearer rules.Overall, these measures reflect a transitional fiscal strategy: Mexico advances toward a more controlled system aligned with international practices while maintaining its attractiveness as an investment destination. The challenge for foreign investors will be to adapt to the new regulatory environment without forfeiting operational agility, taking full advantage of the incentives that Mexico continues to offer to those who contribute to the long-term economic development of the country.
Rita Mireya Valdivia Hernandez
BDO in Mexico