Protocol - Protocol - United Mexican States

PROTOCOL At the signing of the Agreement between the Government of the Republic of India and the Government of the United Mexican States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income, both sides have agreed upon the following provisions which shall be an integral part of the Agreement: I. Ad. Article 5 In respect of sub-paragraph (a) of paragraph 3 of Article 5, it is clarified that for the purposes of computing the time limits referred to in this paragraph, the activities carried on by an enterprise associated with another enterprise within the meaning of Article 9 shall be aggregated with the period during which the activities are carried on by the associated enterprise, if the activities of both enterprises are identical or substantially similar for the same or connected project. II. Ad. Article 7 In respect of paragraph 1 of Article 7, where an enterprise of a Contracting State sells goods or merchandise in the other Contracting State through a permanent establishment situated therein, and sells in that other Contracting State the same or similar kind of goods or merchandise as those which are usually sold through that permanent establishment, these goods or merchandise shall be considered as sold through that permanent establishment. However, the profits derived from such sales shall not be taxable in the other Contracting State if the enterprise demonstrates that such sales have been carried out for reasons other than obtaining a benefit under this Agreement. III. Ad. Article 8 In respect of Article 8, if the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident. IV. Ad. Article 11 In respect of paragraph 4 of Article 11, it is clarified that the term interest includes the following items of income: (a) Commissions related to money lent; (b) Payments made as guarantee of money lent, as well as for the acceptance to act as a guarantor; (c) Payment derived from factoring contracts; (d) Income derived from the alienation of credits; (e) Income derived from financial instruments where there is underlying debt; (f) Income derived from the alienation at discount of securities representing debt. V. Ad. Article 12 1. In respect of sub-paragraph (a) of paragraph 3 of Article 12, it is clarified that the term royalties as used in this Article would be deemed to include payments of any kind received as a consideration for: (a) the reception of, or the right to receive, visual images or sounds, or both, for the purpose of transmission by: (i) satellite; (ii) cable, optic fibre or similar technology; or (b) the use of, or the right to use, in connection with television or radio broadcasting, visual images or sounds, or both, for the purpose of transmission to the public by: (i) satellite; or (ii) cable, optic fibre or similar technology. 2. In respect of sub-paragraph (a) of paragraph 3 of Article 12, notwithstanding the provisions of Article 13, the term royalties also includes payments derived from the alienation of any such right or property which are contingent on the productivity, use or disposition thereof. VI. It is clarified that the provisions of this Agreement shall not prevent a Contracting State from applying its provisions of domestic law-regarding thin capitalization, controlled foreign corporation (in the case of Mexico, preferential tax regimes) and back to back loans, whether existing on the date of entry of force of this Agreement or enacted subsequently. VII. It is understood that for Mexican tax purposes, the fixed base will be treated in accordance with the principles that apply to permanent establishment. IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Protocol. DONE in duplicate at New Delhi this Tenth Day of September, 2007, each in the Hindi, Spanish and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail.