C002/04
05 February 2004
NEW AUSTRALIA-MEXICO TAX TREATY
Trade and investment relations between Australia and Mexico will strengthen
following a new tax treaty, Minister for Revenue and Assistant Treasurer, Senator
Helen Coonan announced today.
“The new treaty will foster the development of trade and economic cooperation
between Australia and Mexico and will further Australia’s trade and investment
links with Mexico. Australia’s trade and investment relationship with
Mexico is the largest Australia has with any Latin American country, exceeding
$A1 billion in 2003,” Senator Coonan said.
Main features of the treaty
“The new treaty reduces double taxation by allocating taxing rights between
Australia and Mexico for all forms of income flows between the two countries.
The basis of allocating these rights is substantially the same as those adopted
in Australia’s other modern tax treaties.
“The treaty will reduce the withholding tax rates applicable to dividend
and royalty flows and this will benefit Australia through reductions in the
level of Mexican tax on payments flowing back to Australia.
Combating fiscal evasion and protecting Australia’s tax revenue
“The integrity of the tax system will be enhanced, and government revenues
will be protected, through both the establishment of a strengthened framework
for the exchange of information between revenue authorities and a mechanism
for settling jurisdictional disputes under the treaty.
“The treaty will provide Australia with a competitive tax framework for
international trade and investment, while ensuring the Australian revenue base
is sustainable and suitably protected. The treaty ensures Australia can effectively
apply its taxing rights in respect of Australian sourced business profits, the
exploitation of its natural resources and the sale of significant Australian
assets.”
Date of effect of the treaty
The new treaty will have effect for Australian and Mexican withholding taxes
in relation to dividends, interest and royalties paid or credited on or after
1 January 2004. The dates of effect for Australian income tax and other Mexican
taxes is 1 July 2004.
Formal notification of the entry into force of the Australia-Mexico tax treaty
will be published in the Gazette as soon as practicable. A copy of the treaty
is available on the Department of Treasury’s website (
www.treasury.gov.au)
at “Taxation”.