Mexico and the Chinese special administrative region of Hong Kong signed an agreement to end double taxation and prevent tax evasion during the G20 Summit in Los Cabos, a beach resort in the northwestern state of Baja California Sur, the Finance Secretariat said.
Mexican Finance Secretary Jose Antonio Meade and Hong Kong Finance Secretary John Tsang signed the agreement on Monday.
The agreement "harmonizes the fiscal systems of the two countries and provides legal certainty for Mexican and Hong Kong investments," the secretariat said in a statement.
The agreement establishes the types of taxes that can be imposed in Mexico and Hong Kong based on the source of income, such as "business profits, capital gains, pensions, earnings by artists and athletes, (and) students, among others," the secretariat said.
Mexico and Hong Kong agreed on the mechanisms for levying taxes on interest and authors' rights, as well as for avoiding double taxation of incomes, the secretariat said.
The agreement is also designed to fight tax evasion through exchanges of information by tax authorities in Mexico and Hong Kong, the secretariat said.
The accord includes "anti-abuse (clauses) to prevent incomes exempt in one contracting state from also being exempted in the other by virtue of the application of the agreement," the secretariat said. EFE