Update to UK and Mexico Double Tax agreement
A new protocol to the Double Taxation Convention between the UK and Mexico was recently signed in Mexico City.
The protocol deletes and replaces Article 27 of the Convention in order to update the exchange of information clauses to bring the Convention in line with the OECD’s model. Briefly, the Article is drafted to allow for the exchange of information necessary to prevent fraud. A new Article (27A) will also be added where both countries will assist each other in tax collection matters.
The protocol also includes new rules for the taxation of dividends paid by property investment vehicles (real estate trusts in Mexico).
The protocol will take force once both countries have finalised the legislative procedures but will retroactively take effect in respect of the new Mexican business flat rate tax (el impuesto empresarial a tasa unica) from 1 January 2008.