The tax treatment of some so-called flow-through entities (S Corporations and limited liability companies or LLCs for example) has been always an issue under the Mexico – US tax treaty. As it stands now, under a protocol to the treaty, a partnership, state or trust is a resident of a contracting state only to the extent that the income it derives is subject to tax in that state, as the income of a resident, either through the partnership, state or trust or its partners or beneficiaries.
November 01 2005