The most impactful changes to the NL – MEX DTAA (following the ratification and deposit of the MLI by Mexico)

In 2017, Mexico signed the MLI , (or “the Instrument”) under the framework of the BEPS project . However, it wasn’t until October 2022 that the Mexican Senate ratified the Instrument and later, in November 2022, published it in the Mexican Gazette. In March 2023, Mexico deposited the ratification bill for the MLI with the OECD and entered into force for Mexico’s double tax treaties on 1 July 2023. Provisions referring to taxes withheld at source on amounts paid to non-residents shall take effect from January 1, 2024, and all other provisions related to taxes on a yearly basis shall take effect from January 1, 2025.

15 Nov. '23 Gandhi Zilli

Since the Netherlands has already ratified and deposited the MLI with the OECD in 2019, the Netherlands-Mexico DTAA (or “the DTAA”) will be modified since the MLI entered into force for Mexico’s DTAAs (i.e., 1 July 2023). The DTAA is modified based on each party’s specific choice to opt in or opt out of the corresponding articles of the MLI. Articles of the MLI rejected by either of the parties will not impact the DTAA. For example, the Netherlands has opted for arbitration provisions (i.e., Art. 18 of the MLI) while Mexico has not. Hence, arbitration would not be included in the Netherlands-Mexico DTAA even upon implementation of the MLI by both countries.

The table below provides an overview of the most relevant MLI provisions and indicates whether the Netherlands and Mexico have opted in for each of these provisions. The last column in the table clarifies the impact on the Netherlands-Mexico DTAA (with effect from 1 July 2023). The columns highlighted in green are discussed in further detail below.

Gandhi Zilli

Gandhi is working as an Associate at NovioTax since September 2022

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