Mexico deposits instrument for ratification of the MLI

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16 March 2023

The timeline to entry into force has been triggered in Mexico. Multinational companies should analyze the impact of the MLI in cross-border transactions.

On 15 March 2023, the Organisation for Economic Co-operation and Development (OECD) reported that Mexico deposited the instrument for ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Instrument or MLI) to finalize the formal ratification and notification process.

As mentioned in EY Global Tax Alerts, Mexico takes first steps to ratify MLI, dated on 10 October 2022, Mexico ratifies MLI, dated on 12 October 2022 and Mexico publishes MLI in Federal Official Gazette, dated on 22 November 2022; the MLI will enter in force on the first day of the month following the expiration of a period of the three calendar months beginning on the date of its deposit. As a result, the MLI for Mexico will enter into force on 1 July 2023.

Furthermore, the MLI will enter into effect in Mexico with respect to taxes withheld at source at the beginning of the calendar year after the date of entering into force, which is 1 January 2024 as a result of the recent deposit of the instrument of ratification.

Considering dates for entry into force, a case-by-case analysis should be made to identify the impact of the MLI in cross-border transactions involving multinational companies with a presence in Mexico.

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For additional information with respect to this Alert, please contact the following:

Mancera, S.C., Mexico City