Mexico and Argentina sign agreement to regulate trade

The Secretary of Finance and Public Credit of Mexico, Luis Videgaray Caso, and the Federal Administrator of Public Revenues of Argentina, Ricardo Echegaray, signed an Agreement to Avoid Double Taxation and Prevent Fiscal Evasion on income and capital between the two countries.

The document, which must be ratified by the parliaments of both countries, lays down rules to prevent double taxation that would lead to an excessive tax burden on residents of Mexico and Argentina engaged in commercial or financial transactions between the both countries.

It also regulates the automatic exchange of tax and banking information, and it has a special clause to ensure balanced taxation for investments in hydrocarbon exploitation.

According to reports, the agreement provides a reduced 12% rate for the paying source. Meanwhile, it incorporates a reduced withholding tax rate on two scales for royalties: 10% for copyrights, use of patents, programs, and technical assistance; and a residual 15% rate.

"The text that we signed will allow us to multiply business with genuine income, give up on some taxes and strengthen tax collection with new businesses, because the state will make more money if private investment performs better," Echegaray said.


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