Straight Talk  

Tax convention between Canada and Mexico entered into force

The Department of Finance announced that the convention between Canada and Mexico for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has entered into force.

The convention was signed on Sept. 12, 2006 and entered into force on April 18, 2007.  Under the convention, the following withholding tax rates will have effect on amounts paid or credited to non-residents on or after Jan. 1, 2008:

• 5 per cent of the gross amount of the dividends if the beneficial owner is a company which owns at least 10 per cent of the voting stock in the company paying the dividends
• 15 per cent of the gross amount of the dividends in all other cases
• 10 per cent for interest

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