This guide does not constitute tax advice, legal advice, or financial consulting. Bitso does not provide personalized tax advisory services. Tax rules are subject to change; always verify current regulations with a qualified professional. Consult a certified accountant or independent tax advisor for guidance specific to your personal or business tax situation.
1. How are stock and ETF sales taxed for Mexican investors?
Every time you sell a stock or ETF, the Mexican tax authority (SAT) considers it a sale of a foreign security. Here is how the tax calculation works:
Step 1: Calculate your gain or loss
Gain (or loss): Sale price minus your original purchase price minus all commissions paid, both when you bought and when you sold. Commissions charged by Bitso and Alpaca Securities are included in your cost and reduce your taxable gain.
Step 2: Apply the 10% tax rate
If you made a gain, you owe 10% of that net gain as Income Tax (ISR) in Mexico. This rate applies to both stocks and ETFs listed on the International Quotation System (SIC).
Step 3: Report it in your Annual Tax Return
You report all your gains and losses from stock sales once a year in your Annual Tax Return (Declaracion Anual). The filing window for individuals opens January 1st and closes April 30th of the following year.
Step 4: The 10% payment is final
The 10% tax paid on stock sale gains is a definitive payment. No additional tax is owed on those gains beyond that 10%.
Two things to keep in mind:
If you sold at a loss, that loss can be offset against gains from similar investments, either in the same tax year or in the following 10 years.
Bitso does not withhold or pay this tax on your behalf. You are responsible for calculating and paying it when you file your Annual Tax Return.
2. How are dividends from U.S. stocks taxed in Mexico?
Some U.S. stocks and ETFs distribute dividends: a portion of the company's profits paid to shareholders. If you hold those stocks, here is what happens:
Step 1: A dividend payment arrives in your account
When a U.S. company pays a dividend, Alpaca Securities credits it to your account. At that moment, the income is considered received for Mexican tax purposes.
Step 2: A U.S. withholding tax is applied first (10%)
Before the dividend reaches you, the U.S. applies a withholding tax. Thanks to the Mexico–U.S. Tax Treaty and your valid W-8BEN form, this is reduced from the standard 30% down to 10%. You can credit this U.S. tax against your Mexican taxes.
Step 3: Mexico charges an additional 10% tax
On top of the U.S. withholding, Mexico requires an additional 10% tax on the gross dividend amount. This is also a definitive payment, no further tax is owed on those dividends.
Step 4: Pay the 10% by the 17th of the following month
Unlike stock sale gains, which are reported once a year, the additional 10% on dividends must be paid monthly. The deadline is the 17th of the month following the month you received the dividend. For example: dividend received in March means payment due by April 17th.
Step 5: Also include dividends in your Annual Tax Return
Dividends must also be included in your total income when you file your Annual Tax Return. They are added to your other income for the year.
Important: Bitso does not withhold or pay dividend taxes on your behalf. You are responsible for tracking your dividend payments and paying on time.
3. How are tax rules applied for individual vs. business accounts?
The tax rules depend on whether you invest as a private individual or through a company.
Here is a side-by-side comparison:
| Individual account | Business/Company account |
|---|---|
| Stock sale gains taxed at a flat 10% | All gains are added to regular company income |
| 10% is a definitive payment — nothing more owed on those gains | Company income taxed at the standard corporate rate of 30% |
| Dividends: additional 10% tax, paid by the 17th of the following month | Dividends are accumulated as regular company income |
| Annual Tax Return due: April 30th | Annual Tax Return due: March 31st |
| Losses offset same-type gains for up to 10 years | Monthly provisional ISR payments due by the 17th of each month |
Note: both individuals and companies can credit the U.S. withholding tax against their Mexican taxes, within the limits set by the Mexico–U.S. Tax Treaty.
4. What are W-8 forms and why do they matter for investing in U.S. stocks?
When you invest in U.S. stocks, you earn income from a U.S. source. Without the right documentation, the U.S. automatically withholds 30% of your dividends. W-8 forms are how you tell the IRS (U.S. tax authority): "I am not a U.S. resident, please apply the Mexico–U.S. Tax Treaty rates instead." The treaty reduces that withholding to 10%.
W-8BEN form for individual investors
| Who needs it? | Any individual who is not a U.S. citizen or U.S. resident investing. |
| What does it do? | Confirms to Alpaca Securities and the IRS that you are a Mexican resident. This activates the Tax Treaty, reducing U.S. withholding on dividends from 30% to 10%. |
| How long is it valid? | 3 calendar years from the date you sign it. After that, it expires and must be renewed. |
| What if it expires? | Alpaca may apply the full 30% withholding on dividends until you renew. Do not let it lapse. |
| Where do I submit it? | We’ll guide you through the process within the app. |
W-8BEN-E form for companies and legal entities
| Who needs it? | Any company or legal entity that is not incorporated or based in the U.S. investing. |
| What does it do? | Same purpose as the W-8BEN, but for entities. It confirms you are a foreign (Mexican) entity and claims the Tax Treaty benefits. |
| How long is it valid? | 3 calendar years from the date of signing. After that, it must be renewed. |
| Extra step for companies: | The form requires you to classify your entity type according to IRS categories. Your tax advisor can help complete this correctly. |
| Where do I submit it? | We’ll guide you through the process within the platform. |
Think of W-8 forms as your proof of Mexican residency for the U.S. tax system. Without them, you pay 30% U.S. withholding. With a valid form, you pay only 10% and can credit even that against your Mexican taxes.
5. What are the key tax deadlines I need to keep track of?
Mark these dates in your calendar. Missing a deadline can result in late-payment penalties and interest charges from the SAT.
| Obligation | Who | Deadline |
|---|---|---|
| Additional 10% tax on dividends received | Individuals | 17th of the month following receipt |
| Annual Tax Return: stock sale gains and dividends | Individuals | January 1- April 30 of the following year |
| Annual Tax Return: all income including stock gains | Companies | By March 31 of the following year |
| Monthly provisional Income Tax (ISR) payments | Companies | By the 17th of each month |
| Renew your W-8BEN or W-8BEN-E | Everyone | Every 3 calendar years from the date signed |
6. What tax-related information can I access through my account?
Bitso does not withhold taxes, issue tax certificates, or file anything with the SAT on your behalf for Stocks transactions. You are responsible for your own tax reporting. However, through your account you can access everything your accountant will need:
Account statements and portfolio reports with full transaction history.
Original acquisition cost for each stock or ETF you hold.
Date, type (buy, sell, dividend), and amount of every transaction.
Currency information (USD) and applicable exchange rates.
Any corporate adjustments to the value of your positions.
We recommend downloading your statements at the end of each year and sharing them with your accountant well before the Annual Tax Return deadline. Keep records of all your transactions: the SAT may request documentation for up to 5 years after the relevant tax year.
7. Do I need to pay taxes if I haven't sold any stocks?
If you only hold stocks and have received no dividends, there is generally nothing to pay or report yet. Taxes on gains are triggered when you sell. Dividends, however, are taxable in the month they are received, even if you keep holding the stock.
8. Is tax treatment the same if I bought fractional shares?
Yes. The same 10% tax on gains applies to fractional share sales, calculated the same way: sale proceeds minus your proportional purchase cost minus commissions.
9. Can I deduct investment losses against other income, like my salary?
No. Losses from stock and ETF sales can only offset gains from the same type of investments. They cannot be deducted against employment income or other ordinary income.
10. I already paid 10% withholding in the U.S. on my dividends. Do I pay again in Mexico?
You owe an additional 10% tax in Mexico on the gross dividend, but you can credit the U.S. withholding already paid against your total Mexican tax bill. Consult your accountant to apply this credit correctly.
11. What happens if my W-8BEN expires?
If your W-8 form is not current, Alpaca Securities may apply the default 30% U.S. withholding tax instead of the 10% Treaty rate. Renew it as soon as possible through the app to restore your Treaty benefits.
12. Does Bitso report my transactions to the SAT?
Bitso doesn’t act as a financial intermediary for Mexican tax purposes in Stocks operations, so it does not issue tax certificates or report directly to the SAT for these transactions. You’re responsible for self-reporting.
13. Do I need a Mexican accountant?
We strongly recommend it. The rules around foreign securities involve multiple obligations (monthly and annual) plus currency conversion, treaty credits, and form filings. A qualified Mexican accountant will ensure you comply correctly and on time.