Mexico: Sworn statement for the applicability of tax treaty benefits

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Mexico: Sworn statement for the applicability of tax treaty benefits

cuellar.jpg

sanchez.jpg

David Cuellar


Nidia Sanchez

Derived from the approval of 2014's Mexican Tax reform package, various amendments to the Mexican tax laws have been enacted. One of them is the inclusion of faculties to the Mexican Tax Authorities with respect to the applicability of tax treaty benefits when transactions are performed between related parties. In this regard, the Mexican Tax Authorities are now entitled to request a foreign resident to certify the existence of international juridical double taxation through the issuance of a sworn statement. Such statement should be signed by the legal representative of the foreign resident intending to apply treaty benefits, and should attest that income is being subject to taxation in the country of residence of the recipient. The statement should also mention the applicable regulations and provide supporting documentation.

Note that Mexican legislation does not establish what double taxation means, but in general terms, the OECD Model Tax Convention Commentaries on articles 23-A and 23-B establishes that juridical double taxation should be understood where the same income (or capital) is taxable in the hands of the same person by more than one country.

Because of the fact that it may be difficult for certain foreign taxpayers to obtain such kind of statement derived from the applicable foreign regulations (territorial tax regimes) or from a specific kind of transaction (a tax free reorganisation), on December 30 2013, the Mexican tax authorities published in the Official Gazette the Miscellaneous Tax Regulations corresponding to the fiscal year 2014, which contain a rule addressing such situation. In this regard, the rule establishes that the Mexican tax authorities would not request the issuance of the previously mentioned sworn statement when:

  • The foreign resident is a resident in a country with a territorial tax system.

  • The foreign resident is not subject to taxation in its country of residence by virtue of the application of the exemption method foreseen in any tax treaty signed with Mexico.

  • In the case of the transfer (alienation) of shares, if such transfer is carried out under the rules of a corporate restructure as established in any tax treaty signed by Mexico.

As it can be seen in the case at hand, it is important to review in detail the new rules regarding the deductibility for payments abroad contained in the 2014 Tax Reform and other miscellaneous regulations to fulfill all the requirements regarding treaty application.

David Cuellar (david.cuellar@mx.pwc.com) and Nidia Sanchez (nidia.sanchez@mx.pwc.com)

PwC

Tel: +52 55 5263 5816

Fax: +52 55 5263 6010

Website: www.pwc.com

more across site & shared bottom lb ros

More from across our site

The US president also unveiled a new 50% levy on copper imports; in other news, a UK wealth tax proposal has been criticised by the Institute for Fiscal Studies
Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
Rafael Tena tells ITR about the ‘crazy’ Mexican market, ditching the hourly rate, and refusing to grow his fledgling firm in an ‘unstructured way’
It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
Gift this article