Why interest is a taxed act
The IVA Law taxes anyone who, within national territory, supplies independent services (art. 1, sec. II), and defines "service" with an extremely wide net that closes with "any other obligation to give, to do or to refrain from doing" (art. 14, sec. VI). Financing — giving money today against repayment with interest tomorrow — falls squarely within it. The taxable base is the interest (the principal is not consideration), and even occasional acts have a payment mechanism provided for (art. 33). Honest starting point: interest = taxed act, except where expressly exempt.
The map of exemptions (art. 15-X)
- Financing of exempt or 0%-rated transactions (15-X-a): if you sell on credit something that carries no IVA, the interest on that financing carries none either.
- Financial system (15-X-b): interest received or paid by banks, credit unions, factoring firms and SOFOMES that qualify as part of the financial system for LISR (Income Tax Law) purposes — but with a huge carve-out: it does not apply to loans granted to individuals who carry out no business or professional activity (that is why your card and your personal loan DO carry IVA on the interest, and your business loan does not).
- Housing mortgages (15-X-d): exempt, no matter who lends.
- Workers' savings funds, certain securities and financial transactions — specific cases from the same catalog.
The "between individuals" myth, put in its place
"Between individuals there is no IVA" is repeated so often it sounds like law. It is not: there is no blanket exemption for a loan between individuals — the transaction falls within the taxable event and is nowhere in art. 15-X. What does exist is a practical reality: the one-off lender does not invoice, does not pass on the tax, and the SAT (tax authority) has historically pursued that act very little. It is a position held up by inertia, not by law — and hard to defend on paper. The habitual lender (an individual with a business activity, or a non-financial legal entity) doesn't even have that alibi: they must pass on IVA on their taxed interest, issue a CFDI (digital tax invoice) and report it.
Five scenarios at a glance
- Housing mortgage: exempt — whoever the creditor is.
- Bank/SOFOM (financial system) lends to a company or a person with activity: exempt (15-X-b).
- Bank lends to a consumer (card, personal, auto): interest with IVA. That's why the "IVA-free" CAT (Costo Anual Total, Mexico's all-in APR) differs from what you see on your statement.
- Non-financial company or habitual lender lends: interest taxed at 16%, CFDI and pass-through.
- One-off loan between individuals: technically taxed; in practice almost never passed on — a risk each person chooses to run, eyes open.
Impact on how a loan is structured
IVA changes the real cost: 16% on the interest is more than two extra points on a 15% rate. When comparing offers, always ask "does your interest carry IVA?" and run the numbers with total cost and CAT. And when structuring as a creditor: the housing-mortgage exemption and the financial-system qualification (via a SOFOM) are, among other things, decisions about the final price your borrower pays — part of the analysis of when the SOFOM wrapper is worth it.