Market Taxation Guide - Mexico

17.10.2016

This Market Taxation Guide (Mexico) provides the following details:

  • Reference information about all taxes applied at source, through Clearstream Banking and its local depositories, to securities deposited in Clearstream Banking; and
  • Instructions for obtaining relief at source or a refund of withholding tax, where these are available, through Clearstream Banking.

New and improved tax information and procedures that become available will be included on an ongoing basis.

Important note:

This Market Taxation Guide (including any attachments and other links) is for informational purposes only and is not intended and should not be considered to be legal advice on any subject matter. Readers of this Market Taxation Guide, whether customers or otherwise, should not act or refrain from acting on the basis of any information included in this Market Taxation Guide without seeking appropriate legal or other professional advice.

Withholding tax

Debt securitiesHolding restriction?Withholding
tax rate
Relief at
source
Quick
refund
Standard
refund
Yes0%
No withholding tax is deducted by Clearstream Banking on interest from Mexican securities held in Clearstream Banking.N/AN/AN/A
EquitiesHolding restriction?Withholding
tax rate
Relief at
source
Quick
refund
Standard
refund
No10% / 30% a
Relief at source and reclaim of withholding tax on dividends from Mexican equities are not available through Clearstream Banking.NoNoNo

a. The 30% rate is applicable to dividends from publicly traded Mexican FIBRAS (REITs).

Note: Before 1 January 2002, dividend payments on equities were subject to 5% Mexican withholding tax. This rate was increased by the Mexican corporate tax of 35%, resulting in an effective applicable rate of withholding tax of 7.6925%. Effective 1 January 2014, an additional 10% withholding tax is applicable to the dividend payments resulting from gains realised in 2014. No relief at source nor reclaim service are available through Clearsteam Banking.

Holding requirements and/or restrictions

For tax reasons, customers may not hold Mexican corporate bonds (Cebures) in Clearstream Banking, whether they are themselves Mexican tax residents and beneficial owner of such corporate bonds or they hold such corporate bonds on behalf of a beneficial owner that is a Mexican tax resident.

Types of securities

The eligible securities issued in Mexico are as follows:

Government debt securities:

  • Adjusted Bonds (Ajustabonos);
  • Development Bonds (BONDES: Bonos de Desarrollo);
  • Treasury Bills (CETES: Certificados de la Tesoreria);
  • Treasury Bonds (Tesobonos);
  • UDIBONOS;
  • Other domestic issues of the Mexican government.

Corporate bonds

  • "Certificados Bursátiles" or "Cebures" (specifically designed for acceptance and clearance in the ICSDs).

Equities and equity products:

  • Class A, B, C, L and N shares of Mexican companies (where foreign investment is allowed);
  • Certificates of Ordinary Participation (Certificados de Participación Ordinaria - CPOs);
  • Publicly traded FIBRAS (Fideicomiso de Bienes Raices - equivalent to REITs);
  • Other domestic equity products available to foreign investors.

Capital gains tax

Typically, there is no capital gains tax withheld through Clearstream Banking on securities held in Clearstream Banking. However, Capital gains tax may be payable on specific gains, for example, Cebures delivered by Clearstream Banking's customers to domestic Mexican counterparts may be charged with the calculated capital gains tax in the Mexican market. Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.

Stamp duty

There is no stamp duty withheld through Clearstream Banking on securities held in Clearstream Banking. Stamp duty may however be payable on specific transactions. Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.