Taxation depends on tax residency, not nationality. Individuals are tax residents if they establish a home in México or have their “center of vital interests” there. Residents are taxed on worldwide income, while non-residents are taxed only on Mexican-source income. Obligations include income tax (ISR), possible VAT (IVA), and annual filings with the Servicio de Administración Tributaria (SAT). Mexico maintains numerous double-taxation treaties, which may reduce withholding or prevent double taxation. Noncompliance can result in audits, penalties, frozen bank accounts, and criminal exposure in severe cases