PFAE vs Asimilados a Salarios: how vehicle mileage deduction changes in Mexico
Practical comparison between Personas Físicas con Actividad Empresarial and Asimilados a Salarios to deduct a personal vehicle and mileage in Mexico.
Two regimes, two very different tax logics
Choosing between Persona Física con Actividad Empresarial (PFAE) and Asimilado a Salarios completely changes how a personal vehicle is reimbursed, deducted, and reported in Mexico. PFAE accrues its own income and deducts documented expenses; the asimilado receives payments withheld by the payer like payroll, with no ability to deduct personal expenses.[^lisr]
Who issues the CFDI
The PFAE issues a fees or business-activity CFDI to the end client, becoming an active subject of VAT and ISR. The asimilado doesn't invoice: they receive a Nómina CFDI from the payer, classified under regime 605 (Salaries and Income Assimilated to Salaries).[^sat-regimenes]
Withheld ISR: automatic control for the asimilado
The asimilado has ISR withheld monthly under article 96 of LISR, computed on gross income with no personal expenses considered. The paying company remits the withholding to SAT and issues the annual statement. For the PFAE, withholding (10% provisional) only applies when invoicing legal entities, and they later compute their annual ISR net of all deductible expenses.[^lisr]
Vehicle deduction: PFAE can, asimilado cannot
The PFAE may deduct vehicle depreciation (up to a MXN 175,000 investment cap), fuel, tolls, maintenance, insurance, and verification, provided invoices are issued in their name and payments above MXN 2,000 go through bank channels.[^lisr] The asimilado has no such option: any vehicle cost is personal unless the company reimburses it against CFDIs issued in the company's name, not the worker's.
Reimbursing mileage to an asimilado
When a company wants to reimburse mileage to an asimilado, it absorbs the expense as its own operating cost: the employee hands over fuel and toll CFDIs in the company's name, and the reimbursement to the worker is recorded as an internal accounting outflow that triggers no extra ISR. Critically, this reimbursement should not be routed through payroll as taxable compensation.
Reimbursement to a PFAE: they invoice their service
The PFAE doesn't receive reimbursement: they issue a fees or business-activity CFDI that already includes their costs. If they want to itemize mileage, they can add a separate line item with `ClaveProdServ 84111506` and `ClaveUnidad KMT`, but it remains their income against which they later deduct their own expenses.
VAT: another underrated difference
The PFAE charges VAT on invoices and credits VAT paid on deductible expenses, including fuel and vehicle maintenance. The asimilado isn't a VAT subject for that income and credits nothing — losing that VAT credit is a real disadvantage when fuel spending is high.
When each regime fits
PFAE suits people with significant expenses, multiple clients, and accounting discipline; asimilados work best with a single payer and predictable income. When the personal vehicle is central to the work, PFAE almost always produces a better tax outcome.
What to document either way
In both cases, keep trip logs with date, origin, destination, business purpose, and kilometers, plus all CFDIs and bank-channel payment evidence. That paper trail is what sustains the deduction or reimbursement in a SAT review.