How is I.V.A calculated in Mexico?

“The value added tax (VAT) is one of the most important in our country. It is an indirect tax, which means that instead of taxing sources of wealth, such as income tax, IVA is applied to consumption.

Value-added tax (VAT) VAT is payable at the general rate of 16% on sales of goods and services, as well as on lease payments and imports of goods and services.

It may have gone unnoticed until now, but if you look closely at your sales receipts you’ll notice that 16% of the total cost of many, if not most, of the goods you buy falls under this tax.

So now you know almost every state in Mexico has the 16% tax, Los Cabos until 2014 had the 11% but with president Peña Nieto it changed to 16%.”

We wanted to quote an official article for this part since this is not a tax we just came up with. This is the official % Mexico has, and I know what you are thinking 16% is so high! We agree but what can you do about it? We are a legit company that pays taxes and therefore we are registered with the government watching our every move. gulp

This year 2023 we decided to add this tax to our prices so when you see our rates you’ll know there won’t be any additional fees anymore, just like the rest of mexico what you see is what you pay. Of course if you pay with credit card you’ll see the breakdown of the subtotal and total including taxes, but no more surprises anymore and we won’t be telling you about this 16% tax anymore.

So if you are thinking about it we only raised our prices by including the tax. If you learned something or didn’t even know all Mexico had the 16% and you are coming soon or have friends and family that are thinking of coming, go ahead and share this post!

We want to help you out with our knowledge, tips and recommendations here in the Baja but mostly Los Cabos area and we have answered this question so many times we decided to make it into the blog as well.

Author: Ana Oropeza.