Written for Mexico. This analysis applies to Mexican federal tax law — ISR (income tax), IVA (VAT) and SAT rules — and cites Mexican statutes. Amounts are in Mexican pesos (MXN).
Within the catalog of exempt income in article 93 of the LISR — the same one that forgives the sale of your home and of your car — lives a section almost no one in the business world knows and that the creative world underuses: section XXIX, which lets you collect author's royalties free of ISR up to an annual cap of 20 annualized UMA. In 2026, with the UMA (the daily reference unit) at $117.31 per day, that's MXN $856,363 — a cap that updates itself, every February, when the new UMA is published. It's real, it's generous, and it's one of the most mis-sold exemptions in the law: whoever presents it to you as a universal exempt-salary machine didn't read — or didn't tell you about — the paragraphs that follow the benefit.
What section XXIX exempts exactly (and what it asks in return)
The perimeter is specific: royalties collected by the author for allowing third parties to publish written works of their creation in books, newspapers or magazines, or to serially reproduce recordings of musical works of their creation. With two operational requirements: that whoever makes the payments intend the books, magazines or recordings for sale to the public, and that the creator issue the CFDI for that income. The natural case is textbook: the novelist with their publisher, the composer whose label reproduces and sells their recordings, the columnist paid by the newspaper for their texts — all collect up to the cap without ISR, and only the excess enters the normal schedule of the annual return. Note the subject: the exemption belongs to the creator — it doesn't travel to heirs collecting royalties on grandpa's work, nor to the company that bought the catalog.
The fine print that kills the fashionable "structures"
The section itself carries three express exclusions, and they're exactly where the schemes sold in courses crash: the exemption does not apply (1) when whoever pays you the royalties also pays you salaries; (2) when you're a partner or shareholder with more than 10% of the capital of the legal entity that pays them; and (3) when the income derives from advertising ideas or phrases, logos, emblems, distinctive marks, industrial designs or models, operating manuals or works of applied art. Read them against the typical pitch — "charge exempt royalties to your own company for your know-how" — and the scheme dies three times: you're a partner of the payer, you probably also draw payroll there, and packaged know-how is an operating manual under another name. And the advertising jingle? It's the perfect gray zone: musically it's a work; commercially it's an advertising phrase with a melody, which is an exclusion scenario — and in any case the payer would have to intend the recordings for sale to the public, something a jingle doesn't meet. Label: risky bordering on red zone, with the burden of proof against you.
What serious use looks like
Safe: the writer, composer or academic paid by publishers, labels or independent media — genuine third parties who sell the copies to the public — with a license agreement, the work registered before INDAUTOR (the copyright office) and CFDIs in order. Defensible: the creator who organizes their intellectual production to collect it as what it is — a real book published by a real publisher, even a niche one — documenting that the payer meets the sale-to-the-public destination; it works as long as substance exists, and it collapses where there are only papers. Red zone: interposing shell publishers to "launder" into exemption payments that actually come from your own company, or disguising fees and salaries as royalties — that's simulation with its own criminal offense, not planning. And a final distinction that avoids costly confusion: this exemption is a benefit for the individual creator; the strategy of corporate intangibles — contributing your brand to the company, amortizing it, collecting corporate royalties — is another game, taxed but powerful, with its own rules and its own list of risks: we take it apart in contributing your brand to the company. The XXIX cap, by the way, updates with the UMA — the indicator and its uses are in the six official indicators.
Do you produce work — or does your company live off intangibles no one has structured?
The intangibles session does the full inventory: which of your creations truly fit the section XXIX exemption (and how far), what belongs in the corporate lane of brands and taxed-but-deductible royalties, and what structure holds up under a review with the law's exclusions in front of it. The opportunity exists — it's designed with the fine print in view, not in spite of it.
Frequently asked questions
Does the exemption apply if I self-publish on Amazon or another platform?
This is unsettled ground: the section requires that whoever pays the royalties intend the books for sale to the public — the platform sells to the public, but the self-publishing model doesn't fit cleanly into the scenario designed for publishing houses. There are reasonable readings both ways and no firm criterion settling it. Honest label: defensible with careful documentation, but unsettled — anyone earning meaningful amounts this way should know the debate beforehand, not after.
Does it apply to software, online courses or social-media content?
No. Section XXIX covers written works published in books, newspapers or magazines and the serial reproduction of recordings of musical works — full stop. Software, courses, videos and monetized digital content are not in the scenario, and forcing them in is building a liability. That income has its own treatment (business or professional activity) and its own legitimate efficiencies.
Can I charge exempt royalties to my own company?
No: the exclusion is explicit if you're a partner or shareholder with more than 10% of the capital of the payer, and also if that legal entity pays you salaries. On top of that, "know-how" and operating manuals are excluded by their nature. Charging royalties to your company can make sense as a corporate strategy — deductible for it, taxed for you — but that's a different arrangement, with market prices and substance to prove; it's not this exemption.
What happens to anything above the $856,363?
The excess is ordinary taxable income: it's added to your return and taxed under the schedule. The cap is an exempt floor, not an income ceiling — you can earn $2 million in legitimate royalties and the first $856,363 of 2026 are free if you meet all the section's requirements. And because the cap is in UMA, it's updated every February: the exact figure depends on the year you collect.
Let's talk about your case
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