.What is ISR and who pays it?
The Income Tax (ISR) is a direct fiscal charge that is applied to the income that increases the inheritance of a taxpayer.
In accordance with the ISR Law , the payment of this tax is mandatory for both physical and legal persons, that is, those who are salaried, who are for fees, are landlords, or have interest-only income, and who are in the following cases:
That they reside in Mexico, regardless of the location of the source of economic income.
Mexicans residing abroad who have a permanent establishment in the country, with respect to attributable income.
Residents abroad, receive income from sources of wealth located in the national territory.
Why the ISR tax rates were changed
Article 152 of the Income Tax Law states that the tax rates must be updated for the inflation that has elapsed in a period that is when an accumulated inflation of more than 10% is reached since its last update.
Due to the fact that the accumulated inflation exceeded an annual rate of 10% since the last review, which was on January 11, 2021, the 2023 fiscal year carried out by the SAT had to modify the ISR taxes for this current year.
What is the ISR rate in 2023
The amounts related to the tax did not really change, what did change is the limit by which the tax increases, although in theory, some people will benefit since the ISR increases or decreases depending on your earnings.
The applicable rates during 2023 for the calculation of the monthly provisional payments, were as follows:
How to calculate ISR in 2023
According to a BBVA bank blog, to calculate how much ISR you must pay, you must follow the following steps:
Identify the total income you receive per month or per year.
Select the ISR percentage according to your salary level provided by the SAT.
Subtract from your income the lower limit located at your salary level.
To the result obtained, apply the rate located in the table previously shown to the result. You must add the fixed fee established by the SAT, and thus you will obtain the ISR.
To summarize, due to inflation that exceeded 10% per year, the SAT updated the rates corresponding to the ISR, now we have to look at the table calmly and calculate the new taxes that we will pay this year.