VAT refund in Mexico: A complete guide to tax-free shopping in Mexico

Are you planning a trip to Mexico and looking to make the most of your shopping spree? From savouring irresistible street food to exploring vibrant handcrafts arts, your trip to Mexico is bound to be an exciting adventure, but do keep in mind it will definitely come with a price tag! Additionally, there is a VAT of up to 16% added to your goods.

But here's good news for tourists from the UK like you, you can claim back a portion of your VAT with Mexico's refund program. This guide will give you a glimpse into tax-free shopping in Mexico, so you can save money while enjoying the beauty and culture of this enchanting country.

And if you are looking for one more way to save even more, consider receiving your Mexico VAT refunds through a Wise debit card!

How much is VAT in Mexico?

First things first, the Value Added Tax (VAT) in Mexico is called Impuesto al Valor Agregado and is abbreviated as IVA. The acronym IVA is the Spanish acronym for VAT, and they essentially refer to the same type of tax you need to pay.

The general IVA/VAT rate in Mexico is 16%, which applies to most goods and services. You might also see a reduced rate of 8% for certain specific goods and services. Some items may be subject to a zero-rate VAT, meaning they are taxable but at a rate of 0%. And, certain goods and services may be entirely exempt from VAT.

To find the applicable VAT rate for your goods or services, please refer to the table below for a quick reference:¹

How much VAT is refunded in Mexico?

It is tough to know the exact number of your VAT refunded in Mexico. Generally, the refund amount is usually only a percentage of the VAT paid, and you won't receive the whole amount back. You might also need to pay an administration fee for the intermediary refund agent to get your VAT refund in Mexico. This fee varies based on the agent you choose and the total amount you spend. If you choose to receive your refund through your British credit card, there will also include extra foreign exchange fees to consider. So, the actual VAT refunds might be less than you expect.

Who is eligible for tax-free shopping in Mexico?

To be eligible for Mexico’s tax free shopping, you must meet these conditions²:

• You are a non-resident of Mexico, typically on a tourist visa;
• You will take your purchased goods with you in your personal luggage;
• Your purchase must be at least 1,200 MXN, and must be made in one store with credit card, debit card or services issued abroad by foreign financial institutions.
• You can also pay in cash as long as they don’t exceed 3,000 MXN in total.

How to get VAT refund in Mexico?

There is more than one way to get your Mexico tourist tax refund. You can apply for your VAT refund in Mexico either offline or online. If you would like to apply for a VAT refund online, you should download the mobile app from one of the registered tax agents in Mexico. But before receiving your VAT refund in Mexico, you should follow the steps below:

Receive a tax exemption form

When shopping, make sure the store is a member of Mexico's tourist tax refund scheme. Not all stores offer tax-free shopping, so look for the tax-free sign or ask the cashier to confirm.

Once you verify that the store is part of the Mexico VAT refund scheme, ask the sales assistant for a tax-free form. You'll need this form and the original invoice to claim your VAT refund in Mexico. Without these documents, you will not be able to receive your VAT refund. The sales assistant may also request to see an officially recognized identity document, so remember to bring one (e.g., your passport) when you go shopping.

If you choose to process your Mexico tourist tax refund online, you can upload these documents and the migration form to the app's platform.

Have the forms stamped

Before leaving Mexico, you must validate your tax-free form and goods. At the airport, go to the designated tax-free station to present your goods, passport, tax-free form, and original receipts. If you’re processing your VAT refund at Mexico City Airport (MEX), you can easily find VAT refund counters in both terminals.

For goods valued at 5,000 MXN or more (including tax), customs validation is mandatory. However, keep your goods with you even if their value is below this threshold, as an officer might still need to inspect them.

Obtain a VAT refund

Now comes the most exciting part of the process: receiving your VAT refund in Mexico. If you’re working with a tax refund agent, visit their designated counter to claim your VAT refund. If you don’t want to go with any agents, you can follow the instructions on your tax-free form to get your money back.³ If you choose to claim your VAT refund through an app, enter your credit card information to process the refund.

The VAT refunds will be paid in MXN directly to your credit card, debit card or other financial services that you use to purchase. You can also choose to receive in cash up to a maximum of 50% of the amount to be paid to tourists (not to exceed 10,000 MXN). The remainder of your VAT refunds in Mexico are deposited electronically in the bank card you provide.

And that’s it - your ultimate guide to Mexico tax-free shopping! While Mexico is generally more affordable than the UK, you can save even more by taking advantage of the Mexico VAT refund program for tourists. There is one last tip for Brits like you: consider receiving your VAT refunds in Mexico with Wise to get the most MXN from every GBP!

Receiving your Mexico VAT tax refund with credit cards might incur extra foreign exchange fees because the local currency (e.g., MXN) will be converted to your card’s main currency (e.g., GBP) at potentially hidden rates set by the card provider. So, your VAT refunds might be less than you expected.

With a Wise debit card, you can easily minimise this fee! It supports 40+ currencies, including MXN, and offers fair foreign exchange rates at mid-market rates, with zero hidden markups but just a small fee from 0.33% depending on the currency. Order your Wise card for a one-time fee of 7 GBP today and maximise your savings on your Mexican adventure!

Get your card now

Please also be aware the VAT refund process in Mexico can be complex and is subject to change. Always verify the information with official sources for the most accurate and up-to-date guidance.

Sources used for this article:

Sources last checked on 24-Sep-2024.