Malta-Mexico Double Tax Agreement in Force

MEDIA ROOM

On the 9th August 2014, the double tax treaty between Malta and the United Mexican States came into force.

This treaty affords double taxation relief in relation to (i) the federal income tax and (ii) the business flat rate tax, as imposed by the laws of the United Mexican States and income tax, as imposed by the laws of Malta.

The main features of this treaty are as follows:

Dividends

No tax is imposed – 0% withholding tax.

Interest

Which arises in one of the contracting states and paid to a resident of the other may be taxed in that other state.  However it may also be taxed in the Contracting State in which it arises and according to the laws of that State.

If the beneficial owner of the interest is a resident of the other Contracting State, the tax charged shall not exceed:

  1. a) 5% of the gross amount of the interest from loans granted by a bank;
  2. b) 10% of the gross amount of the interest in all other cases.

Royalties

Royalties are dealt with in the same way as interest, however if the beneficial owner of the interest is a resident of the other Contra