Weekly Report - 22 November 2012 (WR-12-46)

MEXICO | New tax accord with US. Mexico’s finance ministry (SHCP) signed a new tax information sharing agreement this week with the US Treasury aimed at stopping tax evasion in the two countries. A statement by the SHCP explained that after two years of negotiations the governments of Mexico and the US had agreed to improve their banking and financial information exchange mechanisms substantially in order to ensure that taxpayers in both countries are completely fulfilling their obligations. It added that the new agreement, which puts Mexico in full compliance with the US’s Foreign Account Tax Compliance Act (Fatca) as well as other international tax laws, could potentially help both the US and Mexico significantly reduce tax evasion. In particular, Fatca closes a loophole in the US tax code which allowed investors to avoid paying taxes on dividends by converting them into dividend equivalents.

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