Tax Convention Signed Between Canada and Mexico

News Release

September 20, 2006

Full text of the Convention

A new Convention between Canada and Mexico for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on
income was signed on September 12, 2006, in Mexico City.
The Convention limits the rate of withholding tax to 5% for dividends
between affiliated companies, to 15% for dividends in all other cases, to
10% for interest, and to 10% for royalties. The Convention also provides
an exemption in respect of certain copyright royalties.
The Convention will enter into force on the date on which Canada and
Mexico exchange notes through diplomatic channels notifying each other
that all the necessary measures to give the Convention the force of law in
their respective countries have been completed. The Convention will have
effect, in respect of tax withheld at source on amounts paid or credited
to non-residents, as of the beginning of the first calendar year following
that in which the Convention enters into force; and, in respect of other
taxes, for taxation years beginning after the calendar year in which the
Convention enters into force.
The existing Convention between Canada and Mexico, signed at Ottawa on
April 8, 1991, shall cease to have effect from the dates on which the
new Convention becomes effective.
For further information contact:
Parry Athenaios
Tax Legislation Division
Phone: (613) 992-5864

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Tax Convention Signed Between Canada and Mexico

News Release

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