Cross‑Border Tax Forecast 2026 in Mexico

The enforcement-led approach by the Mexican Tax Authority (SAT) is an ongoing trend expected throughout 2026.

Mexico is not expected to introduce significant corporate income tax rate changes in 2026. However, the SAT is expected to continue strengthening audit activity and anti-avoidance enforcement through increased use of data analytics and information cross-checking. Particular focus areas include:

• cross-border related-party payments
• withholding tax (WHT) treaty positions
• intercompany services and royalties
• substance alignment between contractual structures and operational reality.

Administrative enforcement, rather than major legislative reform, is likely to define the 2026 landscape.

Cross-border groups operating in or through Mexico face a higher likelihood of audits and reassessments. Areas of exposure include:

• denial of deductions for intercompany charges
• challenges to treaty-based WHT reductions (particularly under beneficial ownership analysis)
• recharacterisation of payments
• potential permanent establishment (PE) assertions.

Consequences may include additional tax, penalties, interest, VAT implications and reputational risk. Structures lacking clear economic substance or contemporaneous documentation are particularly vulnerable.

• Conduct a preventive audit-readiness review focused on cross-border payments and treaty positions
• Beneficial ownership analyses and TP documentation should be refreshed and aligned with operational substance
• Internal governance protocols should be implemented to monitor PE risk and contracting authority in Mexico
• Businesses should ensure consistency between CFDI (Comprobante Fiscal Digital por Internet or  Digital Tax Receipt via Internet) invoicing, accounting records and supporting documentation to mitigate formal compliance challenges.