In Mexico, the obligation for individuals to file a tax return depends on the sources of income, their nature and amount. Tax legislation does not require reporting from all taxpayers without exception. The National Tax Service (Servicio de Administración Tributaria, SAT) defines a number of criteria under which an individual may be exempt from filing an annual return. Exemption from reporting does not mean exemption from paying tax — in most cases, withholding occurs automatically through the employer or financial institutions.
1. Employees receiving income from only one employer, without additional sources of income.
If an individual received wages exclusively from one source during the calendar year, did not change employers, did not have additional income and does not claim tax deductions, there is no need to file an annual return. In such cases, the responsibility for calculating and withholding tax rests entirely with the employer. According to Article 98 of the Federal Tax Code (Código Fiscal de la Federación), it is the employer who acts as tax agent and remits the personal income tax (ISR) directly to the SAT. If during the year the employee changed his place of work, but the new employer assumed the responsibility to make annual tax calculations, the declaration is also not submitted. However, if the transfer was accompanied by the payment of compensation or other amounts not included in the regular withholding system, you will have to submit the declaration yourself.
2. Individuals with income below the minimum non-taxable amount.
The Tax Code does not establish a universal threshold for exemption from reporting, but the principle of insignificance of the tax base applies. If your gross annual income does not exceed the minimum tax-free amount, no tax is charged and no declaration is required. In practice, such a threshold is calculated based on the level of the minimum wage, which is indexed annually by the National Wage Commission. In 2025, the minimum daily rate reaches 278.80 pesos, which corresponds to approximately 8,480 pesos per month and 101,760 pesos per year for full-time employment. The exemption from income and from filing a declaration only applies to cases where a person receives income exclusively from one source, and this income does not exceed the minimum exempt amount. We are only talking about income that SAT can track. The exemption applies only if there are no other sources of income. If a person receives interest, rent, dividends or remuneration under a civil contract, even if the basic income is low, the declaration becomes mandatory.
3. Pensioners receiving payments within fifteen times the minimum daily wage.
Based on section 93 of the Income Tax Act (LISR), pensions not exceeding fifteen times the minimum daily rate multiplied by the number of days in a month are exempt from taxation. Taking into account current values in 2025, this is approximately 125,460 pesos per month. If the pension does not exceed this limit, filing a declaration will not be required. If the limit is exceeded, tax is charged only on the excess amount, and the declaration is submitted in the usual manner.
4. Persons receiving benefits, alimony, compensation, scholarships and insurance payments.
A similar rule applies to unemployment benefits, compensation, alimony and scholarships. All of them are exempt from taxation to the extent determined by article 93 LISR, and do not require the submission of a declaration if the person does not receive other income. Insurance payments are also subject to an exception if they represent damage compensation, life or health benefits, and not investment income under insurance programs.
5. Holders of deposits receiving interest up to 100,000 pesos per year, on which tax is withheld by the bank.
Interest on deposits is subject to withholding tax: banks withhold tax annually at a specified rate and remit it to the SAT. The withholding rate is equal to 0.15% of the total amount of accrued interest, regardless of their size. If the aggregate interest for the year does not exceed P100,000, you do not need to file a return because tax has already been withheld. However, if a taxpayer receives interest from more than one source in excess of this limit or wants to take advantage of the deduction, he must file a return and report all amounts.
6. Taxpayers who have not carried out purchase and sale transactions of real estate, cars and other assets.
Individuals who have not purchased or sold real estate, vehicles or securities during the year are not required to file a declaration if they have no other taxable income. The sale of a property, even a one-time sale, creates a tax liability unless the section 93 LISR exemption applies to a single dwelling owned for more than five years. The sale of cars is also considered taxable income if the vehicle is sold at a profit. In the absence of such transactions, tax reporting is not required.
For most employees, tax obligations are fulfilled by the employer. An employee may not interact with the SAT at all if they do not claim additional deductions. For those who receive pensions, benefits or a minimum income, the exemption is also automatic. At the same time, any additional income, even a small one, formally turns the taxpayer into a reporting subject.
The declaration is generated automatically based on electronic invoices and employer data. In 2025, SAT expanded the use of pre-filed returns, which already show the amounts of income and taxes withheld. The exempt taxpayer simply does not receive notice to file the report.
SAT reserves the right to request a declaration when data discrepancies are identified. If, as a result of the automatic exchange of tax information, SAT receives information about income that is not reflected in the system, the taxpayer may be required to submit a return retroactively.