My clients are all in the US — do I still charge 16% IVA on my invoices?
Not necessarily. Services exported from Mexico can qualify for 0% IVA under LIVA Article 29 — but it is not automatic, the conditions are strict, and they are applied case by case. Get it wrong and SAT reclassifies the invoice at 16% plus penalties. And even at 0%, you still file monthly IVA returns.
When 0% applies
The service must be used or enjoyed entirely abroad by a foreign resident with no establishment in Mexico (Art. 29 fr IV, final paragraph on independent personal services). In practice, SAT and the courts require all of these:
| Condition | Detail |
|---|---|
| Contracted by the foreign resident | The contract is with the US client, not their Mexican subsidiary |
| Paid by the foreign resident | Payment comes from a foreign bank account in the client's name |
| Used entirely abroad | No part of the service is consumed or enjoyed in Mexico |
| Invoiced correctly | CFDI with RFC genérico XEXX010101000, régimen 616, uso S01 |
Killers of the 0% treatment: the service is even partially used in Mexico, the "client" is really the US company's Mexican branch, or payment is routed through a Mexican account.
The monthly return still applies
0% is a rate, not an exemption from filing. You still compute and file the monthly IVA return (Art. 5o.-D) — and for zero-rate exporters, that return is the mechanism to claim a refund of creditable VAT (saldos a favor, Art. 6 LIVA). Many freelancers leave this refund unclaimed for years.
Frequently asked questions
My US client has a Mexican subsidiary that I do some work for. 0%?
No — work for the Mexican entity is domestic. Split the invoicing: 0% for the US parent's portion, 16% for the Mexican subsidiary's.
Do I need to prove the "used abroad" part?
Keep the contract, the foreign payment trail, and any evidence of where the service was consumed. If SAT audits, the burden is effectively on you.
What if I already invoiced at 16% but qualified for 0%?
Cancel and reissue (see our PUE/PPD guide for the cancellation mechanics). Don't just "adjust" it on the next invoice.
Sources
- https://trulyremotework.com/blog/remote-jobs-from-mexico/
- LIVA Art. 29 (0% on exports) — https://www.sat.gob.mx
- RLIVA Art. 58 (conditions for services used abroad)
- SAT foreign-client invoicing guidance (RFC genérico XEXX010101000)