MEXICAN / AMERICAN
WITHHOLDING
TAX
ACACSO MEETING
Chicago, Illinois
May 7-9, 2008
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AGENDA
- 5% Withholding Tax (MEX)
- 10% Withholding Tax (USA/CAN)
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USA / MEXICO TAX TREATY
• Convention Between the Government of the
United Mexican States and the Government of the
United States of America for the Avoidance of
Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Income
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10 % WITHHOLDING TAX
• ARTICLE 12
• ROYALTIES
• 1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that
other State.
• 2. However, such royalties may also be taxed in the
Contracting State in which they arise and according to the
laws of that State, but if the beneficial owner is a resident
of the other Contracting State, the tax so charged shall not
exceed 10 percent of the gross amount of the royalty.
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5 % WITHHOLDING TAX
• Income Tax Law in Mexico states:
• Article 200 (LISR).
Royalties and technical assistance
The source of wealth of revenues from royalties, technical
assistance or advertising shall be deemed to be in national
territory when advantage is taken in Mexico of the assets
or rights in respect of which such royalties, or of such
technical assistance, or when such royalties, technical
assistance or advertising are paid by a person residing in
national territory or by a foreign resident having a
permanent establishment in Mexico.
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5 % WITHHOLDING TAX
Tax rates
• The tax shall be computed by application of the rate
indicated for each case below to the revenues obtained by
the taxpayer, with no deduction:
Rate of 5%
• I. Royalties from temporary use or advantage of railroad
cars .......................................5%
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5 % WITHHOLDING TAX
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5 % WITHHOLDING TAX
ACACSO Railroad
Holiday Inn Mart
Chicago, Illinois
Federal Tax Identification Number: XX-XXXXXXX
November 10, 2007
Terms: Due Upon Receipt
Invoice Number: 01
BILL TO:
Kansas City Southern de México, S. A. de C.V.
Avenida Manuel L. Barragán 4850 Norte
Colonia Hidalgo
C.P. 64290
Monterrey, Nuevo León
RFC: KCS970506DQ3
CAR HIRE
PLACE/DATE: SEPTEMBER 2007
INVOICE # 01
Federal Tax Identification Number: xx-xxxxxxx
DESCRIPTION
SERVICE MONTH AUGUST 2007
CAR HIRE
INCOME TAX 5%
TOTAL AMOUNT
$2,663,885.42
(133,194.28)
$2,530,691.14
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WITHHOLDING TAX FORMS
• F 28
This tax form shall be issued in México for the 5%
Withholding Tax
• F 1042-S
This tax form shall be issued in USA/Can for the 10%
Withholding Tax
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QUESTIONS…???
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THANKS…!!!
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