IVA and CFDI invoicing in Mexico (2026): a practical guide

Mexico's value added tax, the Impuesto al Valor Agregado (IVA), is charged at 16% on most sales of goods and services, with an 8% stimulus rate in the border regions and a 0% rate for basic food, medicines and exports. It is administered by the Servicio de Administración Tributaria (SAT), and it goes hand in hand with Mexico's mandatory electronic invoice, the CFDI (Comprobante Fiscal Digital por Internet). This guide covers the rules a small business needs in October 2026, with worked examples in Mexican pesos (MXN).

IVA in Mexico at a glance

IVA rates: 16%, 8% and 0%

16% (general rate). Article 1 of the Ley del IVA applies 16% to sales of goods, services, the temporary use of goods (rentals) and imports, unless a lower rate or an exemption applies.

0% (zero rate). Article 2-A of the Ley del IVA lists the zero-rated supplies. The main ones for small businesses:

• unprocessed animals and plants, and food for human and animal consumption, except drinks other than milk (juices and nectars included), syrups and concentrates for soft drinks, caviar, smoked salmon and eels, flavourings and additives, chewing gum and processed pet food
• patent medicines
• ice and non-carbonated water, except in containers of less than 10 litres
• books, newspapers and magazines published by the taxpayer
• sanitary towels, tampons and menstrual cups
• listed agricultural machinery, fertilisers and pesticides, and certain services to farmers
• exports of goods and services, under Article 29 of the Ley del IVA

Watch the restaurant rule: food that is otherwise zero-rated is taxed at 16% when it is prepared for consumption on the premises, for takeaway or for home delivery.

A zero-rated sale is still a taxable sale, so you can credit the IVA on your purchases. An exempt sale (for example the sale of land and housing, residential rent, medical services or education) carries no IVA, but you cannot credit the IVA you paid to make it.

8% in the border regions. A presidential decree gives businesses in the northern and southern border regions a credit equal to 50% of the IVA, so they effectively charge 8% on qualifying sales made in the region. The SAT confirms the stimulus was extended to 2026 (decree of 31 December 2025, valid until 31 December 2026). It is not automatic: you must be registered in the SAT's list of beneficiaries, meet the decree's conditions, and some goods and services are excluded. Check whether it is renewed for 2027 before you set your prices.

Who must register: the RFC

Mexico has no IVA registration threshold. If you sell goods or services in Mexico, you register in the Registro Federal de Contribuyentes (RFC) before you start and charge IVA from your first taxable sale. To issue CFDIs you also need:

• an e.firma (the SAT's advanced electronic signature)
• a Certificado de Sello Digital (CSD), the certificate that seals your invoices (Article 29 of the Federal Tax Code)

When you sell to the general public and your customer gives you no RFC, the CFDI uses the generic RFC XAXX010101000; for foreign customers the generic RFC is XEXX010101000.

IVA returns and payment

IVA is calculated for each calendar month and each monthly payment is definitive (Article 5-D of the Ley del IVA): there is no annual IVA balancing return. The payment is due by the 17th of the following month. In general you pay IVA when you collect it and credit the IVA you have actually paid, so your monthly figure follows your cash flow.

Other monthly obligations to keep in your calendar:

• DIOT (Declaración Informativa de Operaciones con Terceros): an information return on the IVA paid to and charged by your suppliers, broken down by rate. Under rule 4.5.1 of the 2026 Miscellaneous Tax Resolution it is filed during the month after the period.
• IVA withholding: companies (personas morales) must withhold IVA when they pay individuals for independent professional services or for the rent of goods, when they hire land freight transport, and in other cases listed in Article 1-A of the Ley del IVA. The withheld IVA is paid by the company and credited by the individual.

Pay late and the tax is adjusted for inflation and charged surcharges (recargos) for each month of delay. For 2026 the Revenue Law sets 1.38% a month, which Article 21 of the Federal Tax Code increases by 50% for late payment, so about 2.07% a month.

CFDI 4.0: what every invoice must contain

In Mexico an invoice is not a PDF. It is an XML file, the CFDI, that you seal with your CSD and send to the SAT, or to an authorised certification provider (PAC), before it is issued. The SAT validates it, assigns the folio fiscal and adds its own digital seal (Article 29 of the Federal Tax Code). You then deliver the XML to your customer; the printed version only presumes that the CFDI exists.

Article 29-A of the Federal Tax Code lists the content:

Payments in instalments: the payment complement

If the customer does not pay when you issue the CFDI, you issue it for the full value and then a CFDI with the payment complement (Complemento para recepción de Pagos) for each payment received, or one per month per customer. The 2026 Miscellaneous Tax Resolution (RMF) requires it by the fifth calendar day of the month after the payment.

Sales to the general public: the global CFDI

Retailers can issue one global CFDI (factura global) per day, week or month for sales to the general public, using the generic RFC, and send it within 24 hours of the end of the period. Customers who do not ask for an invoice on a sale below MXN 100 do not need an individual receipt. If a customer later asks for their own CFDI for a sale already in the global CFDI, the global one is cancelled with reason 04 and reissued without that sale.

Foreign currency

You can invoice in US dollars or another currency, but taxes are paid in pesos. Unless you actually bought the currency, the conversion uses the Banco de México exchange rate published in the Diario Oficial the day before the tax arises (Article 20 of the Federal Tax Code).

Corrections: cancellation, credit notes and substitution

A stamped CFDI cannot be edited. Depending on the error you either cancel it or issue a credit note:

• Credit note (CFDI de egreso): for returns, discounts and rebates, or to apply an advance payment. It does not replace the cancellation of an incorrect invoice.
• Cancellation: when the sale did not happen, the customer is wrong, or the amount, RFC, product code or description is wrong. You must give a reason code: 01 (errors, replaced by a new CFDI related with type 04), 02 (errors, no replacement), 03 (the transaction did not take place) or 04 (a named customer's sale included in a global CFDI).

The deadline: a CFDI can be cancelled at the latest in the month in which the annual income tax return for that year is due, and you must be able to document why you cancelled an income CFDI (Article 29-A). Most cancellations need the customer's acceptance, who has three business days to answer; silence on a first request counts as acceptance. No acceptance is needed, for example, for CFDIs of up to MXN 1,000, credit notes, sales to the general public or to foreign customers, or cancellations within 24 hours of issue (rule 2.7.1.35 of the 2026 Miscellaneous Tax Resolution).

Record keeping: keep your accounting records and supporting documents, including the XML files, for five years from the date of the related return (Article 30 of the Federal Tax Code).

E-invoicing in Mexico: who is in scope and what changed in 2026

Mexico has required electronic invoicing for years and the current version, CFDI 4.0, is mandatory for everyone. There is no small-business exemption: every invoice, credit note, payment receipt and payroll slip is a CFDI.

The 2026 tax reform, published on 7 November 2025 and in force since 1 January 2026, tightened the rules:

• a new fraction IX of Article 29-A requires every CFDI to cover existing, real transactions; otherwise it is considered false, and the tax authority can act on this directly in an audit (Article 29-A Bis)
• the SAT can restrict a business's seal certificate (CSD) in more situations, which stops it from invoicing until the issue is resolved
• PwC reports that the SAT may also publish the names of issuers of invoices that do not support real transactions

Issuing CFDIs means stamping each one through the SAT's free tool or through a PAC. If your invoicing software does not stamp CFDIs itself, you need a certified PAC connection for that part.

Worked example in pesos

You run a design studio in Guadalajara and invoice a client:

In the same month you pay for software and equipment of MXN 4,000.00 plus MXN 640.00 of IVA. If you have collected the invoice, your IVA for the month is MXN 1,600.00 − MXN 640.00 = MXN 960.00, due by the 17th of the following month.

If the client is a company and your studio is an individual, the company withholds part of the IVA and pays it to the SAT; you then credit that withheld IVA in your own monthly calculation.

The same sale by a registered business in a border town, at 8%: MXN 10,000.00 + MXN 800.00 = MXN 10,800.00.

Late payment between businesses

When a commercial debtor pays late, the Commercial Code (Article 362) entitles you to the interest agreed in the contract, or 6% a year from the day after the due date when nothing was agreed. That is low, so agree a late-payment rate in your contracts and quotes. Our guide on how to get paid faster covers practical ways to shorten collection times.

Common mistakes

1. 1Sending a PDF instead of a CFDI. Without the SAT stamp your customer cannot deduct the expense or credit the IVA.
2. 2Charging 0% on food served in a restaurant, or on juices and soft drinks, which are taxed at 16%.
3. 3Applying the 8% border rate without being registered as a beneficiary, or after the stimulus expires.
4. 4Forgetting the payment complement by the fifth day of the following month for invoices paid later or in instalments.
5. 5Cancelling instead of issuing a credit note for a discount or return, or cancelling without a valid reason code.
6. 6Missing the 17th, and paying surcharges of about 2% a month on top of the inflation adjustment.
7. 7Invoicing transactions that are not real, which since 2026 makes the CFDI false under the Federal Tax Code.

How Clientlly helps

Clientlly numbers your invoices sequentially per series and applies Mexico's IVA rates on every invoice. Credit notes are linked to the original invoice, invoice PDFs go out in your client's language, and you can invoice in several currencies. Each invoice can carry a card payment link, you see when your client opened it, and automatic reminders go out 3, 14 and 30 days after the due date; recurring invoices handle monthly retainers. Scan supplier receipts and the IVA is read automatically. Clientlly keeps sales and purchase tax books per rate, including exports, and prepares tax reports for you and your contador, with Excel and PDF exports. You can import clients, suppliers, products and opening balances from Excel or CSV, and use the mobile app on the go.

Clientlly is not a PAC and does not stamp CFDIs: to issue legally valid invoices in Mexico you need the SAT's own tool or a certified PAC for that step. See the invoicing features and accounting.