Just as in the U.S., in Mexico you have a sales tax known as I.V.A. which is 10%. It applies restaurants, gasoline, hotels, services, goods, tolls, etc. the difference here is that it’s almost always included in the price so the price you see is the price you pay, but when in doubt you can always ask.
When buying property in Mexico you have to pay an annual Property Tax. And also a transfer tax which is a local one time tax collected when the title is passed by the NOTARIO* on behalf of the buyer and seller and paid to the Mexican Government.
Income Tax is applicable to income earned in Mexico. The recommendation is that you find a reputable accountant, this tax is high but you are allowed deductions; a good accountant will make sure you are in the right regimen and make all the necessary deductions.
A very important fact to know is that foreigners working in Mexico MUST do so under the FM-3 permit if working longer than 180 days or a FMN for less than 180 days. You can visit the Secretary of Foreign Relations offices (SRE Secretaria de Relaciones Exteriores) in downtown Rosarito Next to the police station or call at (661) 613 0234, office hours are 09:00 to 13:00 hrs.
*Notario – Is a civil servant with a Law degree appointed by Mexico City, which reviews records and holds legal transactions such as real estate closings, associations, wills, donations, etc.