Attorneys, accountants, architects, engineers, and consultants face a critical tax decision: which regime to file under. The wrong choice can mean paying twice the taxes for no reason.
The Three Relevant Tax Regimes for Professionals
- RESICO (Simplified Trust Regime): progressive rate from 1% to 2.5% on gross income. No expense deductions. For professionals with annual income under $3.5M MXN and low expenses.
- General business and professional activity regime: income tax rate on net profit (income minus deductible expenses). If your expenses exceed 35% of your income, this regime is usually more advantageous.
- Legal entity (SA de CV or S. de R.L.): 30% corporate rate on net profit. Allows separation of personal assets and scales operations. Suitable when income exceeds $5M MXN annually.
How to Calculate Which Regime Works for You
The key factor is your expense-to-income ratio:
- If your deductible expenses are less than 20% of your income: RESICO is likely more advantageous
- If your deductible expenses are between 20% and 40%: a case-by-case calculation is needed
- If your deductible expenses exceed 40%: general individual regime or legal entity
Obligations Many Professionals Overlook
Regardless of the regime, an independent professional in Mexico must:
- Issue a CFDI (digital tax invoice) for each service rendered
- File monthly provisional income tax payments and an annual tax return
- Submit the DIOT (Third-Party Transactions Report) when operating under the general regime
- Pay IMSS contributions as an independent worker if health coverage is desired