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Selling the shares of a Mexican company as a foreign seller: 25 percent of the price or 35 percent of the gain, buyer withholding, the accountant's report and treaty relief

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-26 · Status: Stable

A foreign resident selling shares issued by a Mexican company, or shares whose book value comes more than 50 percent from Mexican real estate, owes Mexican income tax of 25 percent of the gross price with no deductions. A seller with a qualifying Mexican representative may instead pay 35 percent of the gain, but only with a report by a registered public accountant filed on tight deadlines; a Mexican buyer withholds the tax, otherwise the seller pays within 15 days. The Mexican company must report sales between foreign residents and becomes jointly liable if it records a transfer without proof that the tax was paid; tax treaties, such as the one with the United States, can limit Mexico's right to tax the gain.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Mexican tax law uses the Banxico FIX for foreign currency amounts, which differs slightly. Conversions are for orientation only.

Key facts

Tax on share sale by a foreign resident, gross basis	25 % of priceLISR art. 161, as of 2026-10-26 · in force
Tax on share sale by a foreign resident, net basis option	35 % of gainLISR arts. 152 and 161, as of 2026-10-26 · in force
Seller's own payment deadline when the buyer does not withhold	15 daysLISR art. 161, as of 2026-10-26 · in force
Real estate share of book value that gives Mexican source	50 %LISR art. 161, as of 2026-10-26 · in force
Excess of SAT appraisal over price that triggers buyer tax	10 %LISR art. 161, as of 2026-10-26 · in force
Accountant's report on a share sale due within	45 daysRMF 2026 Annex 2, sheet 75/CFF, as of 2026-10-26 · in force
Issuer report of a sale between foreign residents	Within the month after the sale LISR art. 76, section XX, as of 2026-10-26 · in force
US treaty: holding that lets Mexico tax a share gain	25 % in the prior 12 monthsMexico United States convention art. 13(4), as of 2026-10-26 · in force
Argentina Mexico income tax agreement	In force since 23 August 2017, signed 4 November 2015 (approved in Argentina by Ley 27.334) Ley 27.334 (Argentina), as of 2026-10-26 · in force

The rule

1. Gains on shares or securities representing ownership of property have a Mexican source when the issuer is a Mexican resident, or when more than 50 percent of the book value of the shares comes directly or indirectly from real estate located in Mexico. The second test can reach shares of a foreign holding company whose value lies mainly in Mexican real estate.
Cost to do it: No fee; determines whether Mexican tax applies at all.
Example: A Dutch company sells shares of a Spanish holding company whose only asset is a Mexican hotel company holding the hotel building. If more than half of the book value derives from the Mexican real estate, the gain has a Mexican source. / Not a monetary rule.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Art. 161, first paragraph, 2013-12-11 official text · verified 2026-10-26

2. The tax is 25 percent of the total amount of the transaction, with no deduction. The buyer withholds it if the buyer is a Mexican resident or a foreign resident with a permanent establishment in Mexico; otherwise the seller pays it by return within 15 days after receiving the income.
Cost to do it: 25 percent of the gross price.
Example: Sale of 100 percent of a Mexican S.A. to a Mexican buyer for MXN 100,000,000: the buyer withholds MXN 25,000,000. / Price about USD 5,357,966; withholding about USD 1,339,491.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Art. 161, fourth and fifth paragraphs, 2013-12-11 official text · verified 2026-10-26

3. A seller with a Mexican representative who meets LISR art. 174, whose income is not subject to a preferential tax regime and who is not resident in a territorial tax country, may opt to pay the top rate of the individual tariff in art. 152 (35 percent) on the gain, computed under the individual share gain rules. The representative calculates and pays the tax within 15 days. The seller must file a report (dictamen) by a public accountant registered with SAT confirming the calculation, with the representative's appointment attached; on related party sales the accountant reports the book value of the shares and supporting evidence that the price is at arm's length.
Cost to do it: 35 percent of the gain plus the representative's and the registered accountant's fees (private).
Example: Same sale, tax cost MXN 80,000,000: gain MXN 20,000,000, tax at 35 percent MXN 7,000,000 instead of MXN 25,000,000. / Tax about USD 375,058 instead of USD 1,339,491, a saving of about USD 964,434 before professional fees.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Arts. 152, 161, sixth to eighth paragraphs, and 174, 2013-12-11 official text · verified 2026-10-26 · changed: The DOF 12 November 2021 reform required the dictamen to be filed by a registered public accountant under SAT rules and added the related party book value and arm's length evidence requirements.

4. The representative must reside in Mexico or be a foreign resident with a Mexican permanent establishment, keep the supporting documents for five years from the day after the return is filed, voluntarily assume joint and several liability up to the seller's taxes and have sufficient assets to answer for them.
Cost to do it: Private fee for the representative; many representatives require an indemnity or guarantee.
Example: A Mexican law firm agrees to act as representative for the seller and keeps the file until five years after the return. / Not a monetary rule.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Art. 174, 2013-12-11 official text · verified 2026-10-26

5. For the dictamen on a share sale, SAT's procedure sheet requires the notice to present the report by the tenth day of the calendar month after the sale, and the presentation letter and report within 45 days after the sale; the report must contain the accountant's opinion and the calculation of the gain.
Cost to do it: No government fee; the accountant's fee is private.
Example: Sale closed on 20 August 2026: notice by 10 September 2026; report and letter within 45 days, by 4 October 2026. / No government fee; USD 0.Annex 2 to the Resolución Miscelánea Fiscal para 2026 (procedure sheets), SAT compilation including the First Amendment, DOF 17 July 2026, Procedure sheet 75/CFF, 2026-07-17 official text · verified 2026-10-26

6. The gain is the price per share less the average cost per share. The average cost is the restated proven acquisition cost increased by the growth of the issuer's CUFIN between acquisition and sale and reduced by the issuer's pending tax losses and capital reimbursements, all restated.
Cost to do it: No fee; reconstructing the cost may require the issuer's CUFIN and loss history.
Example: A parent that contributed MXN 70,000,000 and whose subsidiary's CUFIN grew by MXN 10,000,000 since then may have an adjusted cost near MXN 80,000,000, before restatement and loss adjustments. / Adjusted cost of about USD 4,286,373 in that simplified case.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Art. 22, 2013-12-11 official text · verified 2026-10-26

7. If SAT appraises the shares and the value exceeds the agreed price by more than 10 percent, the whole difference is income of the buyer, taxed at the art. 152 top rate (35 percent) without deductions within 15 days of notification, whatever the seller's residence. Free transfers bear 25 percent on an authorized appraisal.
Cost to do it: Appraisal risk sits with the buyer.
Example: Shares sold intragroup for MXN 50,000,000 are appraised by SAT at MXN 60,000,000: the 20 percent excess exceeds the 10 percent tolerance, so the buyer is taxed on MXN 10,000,000 at 35 percent, MXN 3,500,000. / Buyer tax of about USD 187,529 on a difference of about USD 535,797.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013 (Chamber of Deputies consolidated text, last reform DOF 1 April 2024), Art. 161, fourteenth and fifteenth paragraphs, 2013-12-11 official text · verified 2026-10-26

8. The Mexican issuer must report to SAT, within the month after the transaction, any sale of its shares between foreign residents without a permanent establishment in Mexico, with the date, the parties' names, tax ID numbers and countries, the date the tax was paid and the amount. A company that fails to report, or that records in its share registry a transferee who cannot show the tax was withheld and paid or the dictamen received, is jointly and severally liable for the seller's tax. Separately, every recorded transfer in an S.A. share registry must be noticed in the Ministry of Economy system.
Cost to do it: No fee; the exposure for the company is the seller's whole tax.
Example: Two foreign groups trade 100 percent of a Mexican S.A. offshore for MXN 100,000,000. Unless the S.A. files the report and sees evidence of payment, it can be pursued for the seller's MXN 25,000,000 tax. / Exposure of about USD 1,339,491.Código Fiscal de la Federación (CFF), DOF 31 December 1981 (Chamber of Deputies consolidated text, last reform DOF 9 April 2026), LISR art. 76, section XX; CFF art. 26, section XI; LGSM art. 129, 1981-12-31 official text · verified 2026-10-26 · changed: The DOF 12 November 2021 reform added the reporting duty in LISR art. 76, section XX and linked it to the issuer's joint liability in CFF art. 26, section XI.

9. Tax treaties can reduce or remove Mexican tax on the gain. Under the Mexico United States convention, Mexico may tax a US resident's gain on shares of a Mexican company if the seller held, directly or indirectly, at least 25 percent of the capital in the 12 months before the sale, and may tax gains on shares of companies whose assets consist at least 50 percent of Mexican real estate; other share gains are taxable only in the seller's state. Where a treaty exempts the sale, a seller can avoid the dictamen by appointing a representative and filing notice 38/ISR within 30 days of the appointment.
Cost to do it: Treaty relief requires residence evidence; the representative's fee is private.
Example: A US fund holding 10 percent of a Mexican company for five years sells it: under art. 13 of the treaty Mexico generally cannot tax the gain (unless the real estate test applies), and the fund files notice 38/ISR through its representative instead of a dictamen. / Mexican tax of USD 0 if the treaty conditions are met.Convention between Mexico and the United States for the avoidance of double taxation, signed 18 September 1992, in force 28 December 1993 (IRS published text), US convention art. 13, paragraphs 2(c), 4 and 7; RMF rule 3.18.27 and sheet 38/ISR, 1992-09-18 official text · verified 2026-10-26

10. The sale of shares and partnership interests is exempt from VAT.
Cost to do it: No VAT on the share price.
Example: No VAT is charged on the MXN 100,000,000 price. / USD 0 of VAT.Ley del Impuesto al Valor Agregado (LIVA), DOF 29 December 1978 (Chamber of Deputies consolidated text, last reform DOF 12 November 2021), Art. 9, section VII, 1978-12-29 official text · verified 2026-10-26

Route	Base	Rate	Tax MXN	Tax USD	Conditions
Gross basis	Price	25%	25,000,000	1,339,491	None; withheld by a Mexican buyer
Net basis	Gain	35%	7,000,000	375,058	Art. 174 representative, dictamen, no preferential regime
US treaty, holding under 25% and not real estate rich	None	0%	0	0	Treaty residence, notice 38/ISR

Foreign seller, price MXN 100,000,000, tax cost MXN 80,000,000 (LISR arts. 152 and 161; USD at 18.6638)

Worked example

A Spanish parent sells its Mexican subsidiary to a Mexican buyer for MXN 100,000,000 (about USD 5,357,966); its adjusted tax cost is MXN 80,000,000.
Without a representative the buyer withholds MXN 25,000,000 (about USD 1,339,491). With a representative and dictamen the tax is MXN 7,000,000 (about USD 375,058).
Check first whether the treaty with the seller's country removes or limits Mexican tax. For an Argentine seller, the Argentina Mexico agreement in force since 2017 applies; see The Argentine Thread guide for the Argentine side.

Step by step

1. Confirm Mexican source: issuer residence and the 50 percent real estate test.
2. Check the treaty with the seller's country and gather a residence certificate.
3. Rebuild the adjusted tax cost (LISR art. 22) with the issuer's CUFIN and loss history.
4. Decide gross basis or net basis; if net, appoint the art. 174 representative and engage a registered accountant before closing.
5. At closing, have a Mexican buyer withhold; otherwise pay within 15 days.
6. File the dictamen notice by the 10th of the next month and the report within 45 days.
7. Have the issuer record the transfer, give the PSM notice and, for sales between foreign residents, report to SAT within the month.

Common traps

Missing the dictamen deadlines: the 35 percent net option depends on the report (LISR art. 161).
Using a seller in a preferential tax regime or territorial country: the net option is closed to it (LISR art. 161).
Selling intragroup below value: an appraisal more than 10 percent above the price is taxed in the buyer's hands (LISR art. 161).
Offshore deals ignoring the Mexican company: it must report and can be jointly liable for the seller's tax (LISR art. 76 XX; CFF art. 26 XI).
Assuming an offshore holding sale is outside Mexican tax when its value comes mainly from Mexican real estate (LISR art. 161).
Relying on a treaty without residence evidence or the representative notice.

Sources

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