The secretary of the Mexican treasury, Ernesto Cordero Arroyo and secretary of finance for Bahrain, Shaikh Ahmed bin Mohammed Al Khalifa, have signed a double taxation treaty in Washington DC.
The treaty co-ordinates the tax systems of the two countries and provides legal certainty in order to create a suitable environment for increasing investment flows for the benefit of both Bahrain and Mexico.
The treaty determines tax applicable on corporate profits, capital gains, pensions, income received by actors and athletes, students etc. The treaty sets a maximum rate of retention in the state of the source of 4.9% on dividends, 10% on interest income and 10% on royalties.
There are also provisions in the treaty to combat tax evasion through comprehensive information exchange, which extends to information held by banks or other financial institutions.
A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.aspTags: tax | investment | pensions | tax information exchange agreement (TIEA) | double tax agreement (DTA) | withholding tax | Bahrain | Mexico | environment | dividends | interest | royalties | Mexico
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