Mexico approves the OECD MLI affecting 55 tax treaties

In brief

The Mexican Senate ratified the OECD Multilateral Instrument (MLI) on October 12. As a result the instrument could be in force for Mexico as soon as February 2023. 

Action item: Mexican taxpayers, as well as multinationals doing business in Mexico, should assess the potential impacts that the MLI provisions will have in their tax analysis for the application of a tax treaty between Mexico and signatories of the instrument. Taxpayers should evaluate the impact based on the elections made by Mexico and the other jurisdiction to the articles of the MLI for purposes of their covered tax agreement (CTA). The risk of not complying with the MLI provisions could be the loss of treaty relief, including the inability to access the treaty and its overall benefits.