On 29 April 2019, the Mexican Tax Administration (SAT) in its Official Gazette published the Miscellaneous Tax Code (MTR) of 2019. Accordingly, the regulations grants special tax incentive decree for interest on corporate debt bonds.
The Miscellaneous Tax Code for 2019 states that the withholding tax incentive applies to interest paid on bonds sold on the Mexican stock exchanges under the Securities Market Act. In addition, the bonds must be placed and registered on the licensed stock exchanges under Mexican law.
To qualify for the tax incentive, nonresidents should confirm their residence status by signing and delivering an affidavit to the party paying the interest. In the affidavit, the nonresidents must indicate, under oath, that they are residents in a country or jurisdiction with which Mexico has a double tax treaty in force or a broad agreement for the exchange of information. Nonresidents must sign and submit the affidavit before the interest is paid.
