convention to standardize tax treatment within the alliance of ......the decree that approves the...
TRANSCRIPT
The Decree that approves the Convention to Standardize the Tax Treatment set forth in the Agreements for the Avoidance of Double Taxation entered into by the States signatories of the Alliance of the Pacific (the “Convention”), signed in Washington on October 14th, 2017, was published today on the O�icial Gazette.
Said Convention modifies the content established in the Agreements for the Avoidance of Double Taxation concluded bilaterally between Chile, Colombia, Mexico and Peru, with regards to recognized pension funds. In the absence of a similar bilateral agreement between Colombia and Peru, the Convention is also applicable to this bilateral relationship through the entry into force of a Protocol regarding taxation on income obtained by recognized pension funds, included as an appendix to the Convention. With respect to Mexico and Peru, an appendix containing a Protocol applicable to the Protocol to the Agreement for the Avoidance of Double Taxation between said countries is also included.
The aforementioned Convention covers, among others, the following matters:
The definitions of “person” and “resident” contained in said Agreements are amended to include recognized pension funds in the Contracting States.
A definition of “recognized pension fund” of a Contracting State is included, and it is clarified that a recognized pension fund shall be regarded as the beneficial owner of the income obtained.
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(a)
(b)
Convention to standardize tax treatment withinthe All iance of the Pacif ic.
The withholding rate applicable to interest payments made by a resident of a Contracting State to a resident of the Other Contracting state is limited to 10%, and the definition of “interest” is broadened to include profits obtained from the transfer of debt certificates issued by a resident of a State forming part of the Convention.
The treatment applicable to gains obtained by a recognized pension fund through a regulated stock exchange forming part of the Integrated Latin-American Market is established.
Each of the Parties shall notify the Depositary (Colombia), through diplomatic channels, the fulfillment of the internal legal procedures required by each jurisdiction for the entry into force of the Convention. The Convention shall enter into force sixty days a�er the date in which the Depositary receives the last notification.
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Should you have any queries with respect to the foregoing, please contact:
Manuel TamezPartnerP +52 55 5201 [email protected]
Ave. Javier Barros Sierra 540, 4th floor, Santa Fe,Park Plaza I, Álvaro Obregón.ZIP Code 01210, Mexico CityP +52(55)5201–7400F +52(55)5520–1065E + [email protected]
(c)
(d)