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Mexico Concludes New Tax Treaties

Mexico
On 30 January 2013 the Mexican Government published the approval of the income tax treaties concluded with Qatar, Lithuania and Hong Kong. Taxand Mexico summarises the developments expected from these treaties.

Such income tax treaties have not entered into force yet since the exchange of notes by the Mexican Government and the respective countries has not taken place.

Nevertheless, according to Mexican regulations already in force, the income tax treaty concluded with Lithuania will be considered to fulfill all requirements and therefore is considered a comprehensive exchange of information agreement. This implies access by Lithuanian resident individuals or corporations to certain preferential regimes granted by the Mexican Income Tax Law and reduced withholding rates in the case of payments to a related party whose income is considered subject to a preferred tax regime (ie a tax haven).


Your Taxand contacts for further queries are:
Manuel Tamez
T. 52 (55) 5201 74 03
E. mtamez@macf.com.mx

Raymundo I. Dom?nguez
T. 52 (55) 5201 74 16
E. rdominguez@macf.com.mx

Luis A. Monroy
T. 52 (55) 5201 74 66
E. lmonroy@macf.com.mx

Taxand's Take


Mexican income tax treaties generally follow the OECD Model Convention with certain exceptions to safeguard taxation at the source (eg in the case of royalties and sales of stock). Also, it is likely that the Qatar and Hong Kong income tax treaties will include an exchange of information provision since the Mexican Government generally makes an emphasis on this issue. The Mexican Government will provide an update once the texts of the respective treaties are published.

Taxand's Take Author

Manuel Tamez
Mexico