On October 12, 2022, the Senate approved the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, done in Paris on November 24, 2016, along with its reservations and notifications.
The Multilateral Convention will modify most of the conventions for the avoidance of double taxation that Mexico has in effect, with the notable exceptions of those with the United States of America and Germany.
The modifications will include changes related to residence, permanent establishment, dividends, capital gains and the mutual agreement procedure, with the addition of the principal purposes test as a highlight.
For the Multilateral Convention to become applicable, Mexico still has to deposit its instrument of ratification before the Organization for Economic Cooperation and Development. In any case, it is highly probable that the Multilateral Convention will become applicable as of 2024.
In such regard, we recommend our clients and friends to analyze the impact that the Multilateral Convention may have on its cross-border transactions.
For more information please feel free to contact:
Alejandro Santoyo
Tel: +52 (55) 4748-0617
Email: alejandro.santoyo@creel.mx
Omar Zúñiga
Tel: +52 (55) 4748-0665
Email: omar.zuniga@creel.mx
Jorge Correa
Tel: +52 (55) 4748-0625
Email: jorge.correa@creel.mx
Luis Vázquez
Tel: +52 (55) 4748-0677
Email: luis.vazquez@creel.mx
Eduardo Brandt
Tel: +52 (55) 4748-0623
Email: eduardo.brandt@creel.mx