Annual Income Tax Return — Individuals Mexico (Declaración Anual Personas Físicas)

An Annual Income Tax Return for Individuals Mexico (Declaración Anual de Personas Físicas) is the comprehensive income tax filing submitted by natural persons (personas físicas) to the Servicio de Administración Tributaria (SAT) through the SAT Portal (portal.sat.gob.mx) each year, consolidating all income received during the prior calendar year, applying authorized deductions (deducciones personales), and calculating the final Impuesto sobre la Renta (ISR) liability or balance in favour of the taxpayer (saldo a favor — tax refund). The legal obligation to file the declaración anual is established in LISR Articles 150 through 152 and in CFF Article 31, which broadly requires that all Mexican taxpayers submit tax returns on the dates and in the forms established by the fiscal legislation.

Mexico's ISR framework for individuals (personas físicas) is structured under LISR Title IV, which divides individual income into discrete categories (capítulos), each with distinct rules for income recognition, deductible costs, and withholding obligations. The principal income categories for individuals are: salarios y demás prestaciones (employment income — Chapter I); actividades empresariales y profesionales (business and professional services income — Chapter II); arrendamiento de inmuebles (rental income from real property — Chapter III); enajenación de bienes (income from sale of assets — Chapter IV); adquisición de bienes (income from receiving assets below market value or as gifts — Chapter V); dividendos y utilidades distribuidas (dividends from legal entities — Chapter VIII); intereses (interest income — Chapter VI); premios (prize and lottery winnings — Chapter VII); planes de retiro (retirement plan distributions — Chapter IX, Article 93 partially); and demás ingresos (all other income not covered by the above chapters — Chapter IX).

The Declaración Anual serves multiple functions in the Mexican tax system: it is the mechanism through which taxpayers with multiple income sources reconcile withholdings made by their employers and clients throughout the year; it enables taxpayers to apply personal deductions (deducciones personales) not considered during provisional withholding, including medical expenses (gastos médicos), mortgage interest (intereses hipotecarios), educational expenses (colegiaturas), voluntary AFORE contributions (aportaciones voluntarias), and charitable donations (donativos); and it establishes the final tax amount due or refundable after all applicable credits (crédito al salario, crédito fiscal) and withholdings are applied.

The SAT processes individual annual tax returns using a pre-filled (prellenada) format since 2014 — the SAT's Declaración Anual Pre-llenada automatically imports data from: Comprobantes Fiscales Digitales por Internet (CFDI) issued by the taxpayer's employers (recibos de nómina), clients (facturas de honorarios), and tenants (facturas de arrendamiento); bank interest information reported by financial institutions (instituciones del sistema financiero); AFORE contribution data from CONSAR; and INFONAVIT credit interest data. The taxpayer reviews, supplements, and confirms this pre-filled data before submission. The SAT accepts electronic signatures (e.firma — formerly FIEL) for submission, enabling fully digital filing without physical attendance at SAT offices.

The 2022 fiscal reform expanded the scope of personal deductions and clarified the treatment of virtual asset income (activos virtuales) in the annual return — gains from Bitcoin, Ether, and other cryptocurrencies are now explicitly reportable as demás ingresos under Chapter IX of LISR Title IV, applying the acquisition cost in MXN at the date of purchase against the sale proceeds in MXN at the date of disposal. The 2023 reform to LISR Article 93 also clarified the exemption threshold for employment severance payments (indemnizaciones por despido), affecting the annual return of workers who changed employers or were dismissed during the tax year. The Procuraduría de la Defensa del Contribuyente (PRODECON) publishes free annual guides (guías de declaración anual) covering the most common taxpayer scenarios, accessible at prodecon.gob.mx, and provides free taxpayer assistance services (Salas de Defensa al Contribuyente) in all state capitals during the April filing season.

An Annual Income Tax Return for Individuals Mexico must be filed by all natural persons with active RFC registrations who received income subject to ISR during the calendar year, subject to certain exemption thresholds and employment-only exceptions established in LISR Article 150.

The declaración anual is required for any person who received income from two or more employers simultaneously during the year — because each employer applies withholding independently based only on their own payments, the combined income may push the taxpayer into a higher marginal rate that was not captured by either employer's withholding, creating a balance due (saldo a cargo) that must be settled in the annual return.

The return is mandatory for taxpayers who earned professional services income (honorarios — Chapter II income) or business income (actividades empresariales — Chapter II income) exceeding MXN 400,000 during the year, as these taxpayers make monthly provisional ISR payments (pagos provisionales) throughout the year that must be reconciled in the annual return. Rental income recipients (arrendadores) who own residential or commercial properties also file annual returns consolidating monthly provisional payments.

The declaración anual is required to claim tax refunds (devolución de saldo a favor) — workers who were over-withheld because they had deductible personal expenses (medical bills, mortgage interest, tuition) that their employer was not aware of can only recover the excess withholding by filing an annual return and claiming the refund through the SAT Portal. Without the declaración anual, the over-withheld ISR is forfeited.

The return is needed for mortgage applications and financial institution credit approvals — Mexican banks (BBVA, Santander, HSBC, Banamex) and INFONAVIT require the most recent two or three annual SAT returns as proof of income (comprobante de ingresos) when evaluating créditos hipotecarios and personal loans. The SAT-sealed (sellada) annual return is the standard income verification document for formally employed individuals without payslips and for self-employed professionals.

Persons receiving income from abroad (fuente de riqueza extranjera) — including salaries from foreign employers, foreign rental income, foreign dividends, or freelance payments from non-Mexican clients — must file a declaración anual in Mexico to report this worldwide income (ingreso de fuente mundial) under LISR Article 1, which subjects Mexican tax residents to ISR on all income regardless of source.

The return is also required for individuals who received income from the sale of real property (enajenación de inmuebles), business interests, or shares in Mexican companies during the year — capital gains from these transactions are subject to ISR at 25% or at the tariff rate under LISR Article 120, and provisional withholdings made by the acquiring party or the notary (Notario Público) during the closing must be reconciled in the annual return. Taxpayers who sold their primary residence (casa habitación) and qualify for the CGT exemption under LISR Article 93 Section XIX must document the exemption in the annual return to prevent the SAT from assessing back taxes on the withheld amount.

A complete Annual Income Tax Return for Individuals Mexico under LISR arts. 150–152 must include the following elements to be valid and to accurately calculate the final ISR liability or refund.

Taxpayer Identification: RFC (Registro Federal de Contribuyentes), CURP, full legal name, tax domicile, and e.firma (electronic signature) credentials or Contraseña (password) for SAT Portal authentication. The RFC must be active (en situación activa) and must correspond to the regime(s) under which the taxpayer received income during the year.

Income by Chapter: A comprehensive declaration of income from each applicable LISR Title IV chapter: (i) employment income (salarios) from each employer — pulled from CFDI nomina records registered in the SAT's system; (ii) professional services income — from CFDI facturas de honorarios and provisional payment records; (iii) rental income — from CFDI facturas de arrendamiento and provisional payments; (iv) capital gains from asset sales — from real property escrituras and other disposal records; (v) interest income — pre-filled from bank CFDI interests reports; (vi) dividend income — from CFDI dividendos issued by distributing entities; and (vii) other income (demás ingresos) including virtual asset gains, gambling wins, and income not covered by other chapters.

Personal Deductions (Deducciones Personales): Under LISR Article 151, individuals may deduct: medical, dental, optical, hospital, and therapy fees paid to IMSS/ISSSTE-licensed professionals (with CFDI facturas); medical insurance premiums (primas de seguro de gastos médicos); mortgage interest on a single primary residence credit (intereses reales de crédito hipotecario, per annual bank certificate); tuition fees (colegiaturas) for the taxpayer's children from preschool through bachillerato (subject to annual caps per level, established in the Decreto de Estímulo Fiscal Educativo); voluntary AFORE contributions above the mandatory minimum; transport school fees (transportación escolar); and charitable donations (donativos) to SAT-authorized donee organizations (donatarias autorizadas). The total personal deductions are capped at MXN 163,467 (2024) or 15% of total income, whichever is lower, per LISR Article 151 last paragraph.

ISR Calculation: Application of the LISR Article 152 annual rate table and tax credit (crédito fiscal del trabajador) to arrive at the annual ISR before credits. Subtraction of ISR withheld by employers, clients, financial institutions, and INFONAVIT during the year. If withholdings exceed the annual ISR, the difference is the saldo a favor (tax refund) claimable via the SAT Portal. If annual ISR exceeds withholdings, the difference is the saldo a cargo (tax balance due) payable by April 30.

Complementary Schedules: For taxpayers with rental income: a rental income schedule showing income, authorized deductions (30% standard deduction or actual maintenance costs, property tax, mortgage interest, insurance, administration fees per LISR Article 115), and net taxable rental income. For business/professional income: the provisional payment reconciliation schedule.

Virtual Asset and Foreign Income Reporting: For taxpayers who received cryptocurrency income (demás ingresos under Chapter IX) or income from foreign sources (ingresos de fuente de riqueza en el extranjero), supplementary schedules must show the MXN conversion methodology (exchange rate source, date of conversion, and basis for gain calculation) and, for foreign income, the applicable tax treaty credit claimed under the relevant Convenio para Evitar la Doble Imposición signed by Mexico with the source country. Mexico maintains tax treaties with over 60 countries through agreements administered by the SAT and the Secretaría de Hacienda y Crédito Público (SHCP).

Forms-legal.com provides this Annual Income Tax Return — Individuals Mexico template as a preparation guide. The declaración anual must be filed electronically through the SAT Portal (portal.sat.gob.mx) using e.firma or Contraseña — consult a Contador Público Autorizado (CPA) or use the SAT's free Declarasat assistance service if you have complex income sources or significant deductions to optimize.