Direct Tax Avoidance Agreements

United Mexican States

Article 23

METHODS FOR ELIMINATION OF DOUBLE TAXATION

Double Taxation shall be eliminated as follows :

1. In India :

  (a)  Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Mexico, India shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in Mexico.

Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Mexico.

2. In accordance with the provisions and subject to the limitations of the laws of Mexico, as may be amended from time to time without changing the general principle hereof, Mexico shall allow its residents as a credit against the Mexican tax :

  (a)  the Indian tax paid on income arising in India, in an amount not exceeding the tax payable in Mexico on such income; and

  (b)  in the case of a company owning at least 10 per cent of the capital of a company which is a resident of India and from which the first-mentioned company receives dividends, the Indian tax paid by the distributing company with respect to the profits out of which the dividends are paid.

3. Where in accordance with any provision of the Agreement income derived by a resident of a Contracting State is exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.