Hong Kong signs tax treaty with Mexico

The Financial Secretary, Mr John C Tsang, signed in Los Cabos on June 18 (Mexican time) an agreement with Mexico for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income on behalf of the Hong Kong Special Administrative Region Government. The Mexican Secretary of Finance and Public Credit, Mr José Antonio Meade Kuribreña, signed on behalf of his government. This is the 25th comprehensive agreement for the avoidance of double taxation (CDTA) concluded by Hong Kong.

Under the CDTA, residents of both parties enjoy various tax preferential treatments, for example:

1. The tax paid for income earned by Mexican residents in Hong Kong will be allowed as credit against tax payable in Mexico.

2. The withholding tax rate for Hong Kong residents receiving interest from Mexico will be reduced from 30 per cent generally to at most 10 per cent, and may be further reduced to 4.9 per cent if the beneficial owner is a bank. The Mexican withholding tax on royalties will also be reduced from currently at 25 per cent to 10 per cent.

3. The tax paid for profits of Hong Kong companies doing business through a permanent establishment in Mexico will be allowed as a credit against the tax payable in Hong Kong in respect of the income, subject to the provisions of the tax laws of Hong Kong.

The above information was extracted from the press release of Hong Kong Inland Revenue Department. For more information, please visit the website: