Amendments to the double taxation agreement with Mexico in force

Bern, 23.12.2010 - The protocol to amend the double taxation agreement (DTA) between Switzerland and Mexico entered into force today. Aside from a provision on the exchange of information in accordance with the OECD standard, the protocol contains a reduction in the stake required for exemption from withholding tax on dividends. Thanks also to further amendments, it will contribute to promoting bilateral economic relations.

Switzerland and Mexico informed one another via diplomatic channels that all of the conditions and legal procedures for the protocol's entry into force had been met. In accordance with the provisions on entry into force, the amendments to the DTA enter into force 30 days after receipt of the later notification. This occurred today.

The provisions of the protocol will apply to withholding tax on income which will be paid or credited on or after 1 January 2011. Concerning all other taxes and the exchange of information, the protocol will apply to tax years starting or after 1 January 2011.

The revised DTA stipulates that dividends on stakes of at least 10% will be exempt from withholding tax. In future, the withholding tax levied on interest will be lowered to 10%, and to 5% under certain conditions. In addition, Mexico has undertaken via a most-favoured-nation agreement to start negotiations with Switzerland on more favourable tax regulations for interest and royalty payments as soon as Mexico has negotiated such provisions with another country.

The revised DTA with Mexico was signed in Mexico City on 21 September 2009 and was approved by parliament on 18 June 2010. The referendum deadline expired unused on 7 October 2010.

Address for enquiries

François Bastian, Division for International Affairs, Federal Tax Administration, tel. 031 322 71 52