IEPS Tax in Mexico: Rates, Who Pays, and Filing Rules

The IEPS tax in Mexico — Impuesto Especial sobre Producción y Servicios — is a federal excise tax charged on the production, sale, or importation of specific goods and a handful of services, including alcohol, tobacco, fuels, sugary drinks, high-calorie snack foods, pesticides, and gambling. Producers and importers calculate and remit the tax, then pass the cost down the supply chain until the final consumer absorbs it in the retail price. Rates run from a flat 8 percent on high-calorie processed foods to 160 percent on cigarettes, with per-liter or per-unit quotas on fuels, sweetened drinks, and tobacco that are adjusted each January for inflation.

What IEPS Applies To

The Ley del Impuesto Especial sobre Producción y Servicios lists every taxable item. The main categories are alcoholic beverages of all strengths, tobacco products (cigarettes, cigars, loose tobacco), gasoline and diesel, flavored beverages containing added sugars or sweeteners along with the concentrates and powders used to make them, energy drinks, processed foods above a defined calorie density, pesticides classed by toxicity, and gambling, lotteries, raffles, and betting services.

Basic nutritional staples stay outside the tax. Pesticides in the least toxic category are exempt entirely. Exports of otherwise-taxable goods are rated at 0 percent so Mexican producers can compete abroad without the tax padding their prices.

IEPS Rates for 2026

IEPS uses two rate structures depending on the product: ad valorem rates calculated as a percentage of the sale price, and specific quotas charged per unit of volume or weight. Some products face both.

Alcoholic Beverages

Alcohol is taxed on a sliding scale by alcohol content by volume:

Up to 14% ABV (beer, most wine): 26.5%
Above 14% and up to 20% ABV (fortified wines, some liqueurs): 30%
Above 20% ABV (tequila, mezcal, whiskey, rum): 53%

These percentages are set in the statute and do not adjust for inflation.¹

Tobacco

Cigarettes carry a dual structure: a 160 percent ad valorem rate on the sale price plus a fixed per-cigarette quota. For 2026, the quota is $0.8516 pesos per cigarette.¹² Cigars and loose tobacco are subject to the ad valorem calculation, but the per-unit quota applies only to cigarettes.

Sweetened and Flavored Beverages

Flavored drinks with added sugars are taxed on a per-liter basis rather than as a percentage. For 2026, concentrates with added sugars carry a quota of $3.0818 pesos per liter, and concentrates with non-caloric sweeteners carry a quota of $1.5000 pesos per liter. These figures are updated every January based on the National Consumer Price Index and published in the Diario Oficial de la Federación.³

Energy Drinks

Energy drinks face a 25 percent ad valorem rate on top of the per-liter sweetened-beverage quota when they contain added sugars or sweeteners, making them one of the most heavily taxed beverage categories.¹

High-Calorie Processed Foods

Foods with an energy density of 275 kilocalories or more per 100 grams are taxed at a flat 8 percent. This covers confectionery, chocolate, snack chips, puddings, and similar items.¹

Pesticides

Rates track the product’s acute toxicity hazard category:

Categories 1 and 2 (highest toxicity): 9%
Category 3: 7%
Category 4: 6%
Category 5 (lowest toxicity): exempt

The graduated structure is designed to steer agriculture toward less toxic alternatives.¹

Gasoline and Diesel

Fuels carry specific per-liter quotas rather than percentage rates. For 2026, Magna (regular) gasoline is approximately $6.70 pesos per liter, Premium gasoline is approximately $5.66, and diesel is approximately $7.36. The federal government can adjust these quotas weekly, often applying subsidies or stimulus to keep pump prices stable when international crude prices spike. Adjusted rates appear in the Diario Oficial de la Federación.³

Gambling and Betting

Effective January 1, 2026, the IEPS rate on betting and games of chance rose from 30 percent to 50 percent. It covers lotteries, raffles, gambling, sweepstakes, and online betting offered through digital platforms, and applies to the stakes or fees collected from participants.

Who Is Legally on the Hook

The obligation to calculate, report, and remit IEPS falls on the entity that manufactures, produces, or imports the taxable goods. These are the formal taxpayers in the eyes of SAT (Servicio de Administración Tributaria), even though the economic cost flows downstream.

When a producer sells to a wholesaler or retailer, the tax must be transferred, meaning it is charged to the buyer as a separate line on the invoice. The buyer then charges it to the next participant in the chain, and the final consumer absorbs it in the retail price. Everyone in between is effectively a collection agent for the federal treasury.

Importers pay IEPS at the point of customs entry before goods can clear for domestic distribution. Exporters do not pay the tax on shipments leaving Mexico (0 percent rate) and can recover excess IEPS credits that domestic sellers cannot.¹

Foreign Digital Betting Platforms

The 2026 reforms pulled foreign digital betting and wagering platforms into the IEPS framework. Non-resident providers offering online betting to customers in Mexico must obtain an RFC (Mexican tax ID), appoint a legal representative, establish a tax domicile in Mexico, and collect and remit the 50 percent tax. Payment intermediaries that process transactions for these providers must withhold 100 percent of the IEPS and issue withholding CFDIs for each transaction. Non-compliance can result in SAT ordering the temporary suspension of the platform’s internet access in Mexico, a provision widely called the “kill switch.”

Crediting IEPS Paid on Inputs

Businesses in the middle of the chain do not simply absorb the IEPS their supplier charged. Article 4 of the law allows taxpayers to credit IEPS paid on inputs against IEPS owed on their own sales, but five conditions must all be met:

The supplier stated the IEPS as a separate line on the CFDI (digital tax invoice).
The IEPS was actually paid to the supplier, not merely accrued.
The credit is applied against IEPS on the same product category. Cross-category crediting is not allowed.
The credit is claimed in the same month the tax was paid.
The credited amount is not also deducted as a cost for income tax purposes.

The credit in any month cannot exceed IEPS owed that same month. If you paid more IEPS on inputs than you owe on sales, the difference is lost, with no refund and no carryforward. Exports are the one exception, where excess credits are recoverable.¹

This is where many businesses lose money. A company that fails to ensure the IEPS appears as a separate line on every purchase invoice forfeits the credit entirely, even when the tax is clearly embedded in the price.

Marbetes, Precintos, and Tobacco Security Codes

Two sectors face physical compliance on top of the tax filings. Every container of alcoholic beverage sold or imported into Mexico must carry a marbete (stamp) or precinto (seal) issued by SAT, proving the product entered the legitimate supply chain and that IEPS was accounted for. For 2026, the cost is $0.6086 pesos per marbete and $2.27 per precinto, and stamps are valid for 120 calendar days after delivery.⁴

Cigarette packs and other processed tobacco products must carry a SAT-issued security code. Under the 2026 reforms to the Código Fiscal de la Federación, possessing or selling cigarettes with counterfeit, altered, or missing security codes is now treated as equivalent to smuggling, punishable by five to eight years in prison.

Filing, Invoicing, and What Happens If You Miss the Deadline

IEPS is filed monthly through SAT’s electronic portal using RFC, password, and e.firma (advanced electronic signature). The return and payment are due by the 17th of the month following the reporting period, so January’s IEPS is due by February 17.

Every sale of an IEPS-taxable product must be documented with a CFDI (Comprobante Fiscal Digital por Internet), and the IEPS amount must appear as a separate line item. If it does not, the buyer loses the ability to credit that tax against their own IEPS liability, and the seller may face penalties during an audit.

On top of the monthly return, businesses in IEPS-taxable sectors must file informative declarations that give SAT visibility into their supply chains. The annual Declaración Informativa Múltiple (DIM) reports IEPS and ISR withholdings, trust data, and related-party transactions.⁵ The MULTI-IEPS declaration captures sector-specific operational details, including major suppliers and customers. SAT cross-references these filings to verify that IEPS transferred by one company matches what the counterparty reported, and discrepancies are a reliable audit trigger.

Surcharges and Fines

Missing the deadline triggers monthly surcharges (recargos) on the unpaid balance. For 2026, the late-payment surcharge is 2.07 percent per month, compounding on the inflation-adjusted balance. If the taxpayer negotiates an installment plan, the rate drops to between 1.42 and 1.97 percent monthly depending on the term. Formal extensions carry 1.38 percent monthly. Six months of non-payment at 2.07 percent grows the debt by roughly 13 percent before any fine is added.

Fines are separate from surcharges. Late or incomplete provisional declarations can result in fines reaching approximately $50,000 pesos or more depending on the violation and the taxpayer’s history. Failing to break out IEPS correctly on CFDIs, skipping the DIM or MULTI-IEPS, and failing to report marbete usage all carry their own penalty schedules published by SAT in the Código Fiscal de la Federación.

1
Cámara de Diputados. Ley del Impuesto Especial sobre Producción y Servicios
2
Secretaría de Hacienda y Crédito Público. LIEPS 2026
3
Diario Oficial de la Federación. Acuerdo por el que se actualizan las cuotas que se especifican en materia del impuesto especial sobre producción y servicios para 2026
4
Servicio de Administración Tributaria (SAT). Solicitud de marbetes físicos y precintos de bebidas alcohólicas
5
Servicio de Administración Tributaria (SAT). Declaración Informativa Múltiple (DIM)