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Mexico Takes A Big Step Towards International Standards in Tax Evasion
This article has been republished in Bloomberg BNA Tax Planning International Review, January 2013
On 27 August 2012 the Mexican government published in the Federal Official Gazette the Enactment Decree of the Convention on Mutual Administrative Assistance in Tax Matters, made in Strasbourg on 25 January 1988, (the Convention), and the Enactment Decree of the Protocol that modifies the Convention, made in Paris on 27 May 2010 (the Protocol). Taxand Mexico discusses the impact this has on taxpayers and how they are now more aligned to international tax evasion standards.
By signing the Convention and the Protocol, Mexico obliges itself to provide administrative assistance in tax matters, including:
- Exchange of information, including simultaneous tax examinations and participation in tax examinations abroad.
- Assistance in recovery, including measures of conservancy.
- Service of documents.
Mexico shall provide administrative assistance whether the person affected is a resident or national of another party to the Convention, or any other State.
Accordingly, Mexico is entitled to request for administrative assistance in tax matters from any of the parties to the Convention.
Mexico will be obligated to provide administrative assistance in tax matters to any Member State of the Council of Europe, or any member country of the Organisation for Economic Co-operation and Development (OECD) which is a party to the Convention, even if Mexico has not concluded an income tax treaty or an exchange of information agreement with such country.
The Convention entered into force on 1 September 2012.
The Mexican government has been very active in the sphere of exchange of information agreements. For some years now they have been re-negotiating their income tax treaties so that they can include an exchange of information and assistance in the collection of taxes. Mexico has taken a big step toward the international standards for the avoidance of tax evasion through international co-operation.
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