Double Taxation Relief (Taxes on Income)

L.N. 239 of 2013

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(The United Mexican States) Order, 2013

IN exercise of the powers conferred by article 76 of the Income

Tax Act, the Minister for Finance has made the following order:-

The title of this order is the Double Taxation Relief (Taxes

on Income) (The United Mexican States) Order, 2013.

Article 2

CONVENTION BETWEEN

THE UNITED MEXICAN STATES AND MALTA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

THE UNITED MEXICAN STATES and MALTA,

DESIRING to conclude a Convention for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income,

HAVE AGREED as follows

ARTICLE 1

PERSONS COVERED

This Convention shall apply to persons who are residents of one or both of

the Contracting States.

ARTICLE 2

TAXES COVERED

1. This Convention shall apply to taxes on income imposed on behalf of

Mexico and on behalf of Malta, irrespective of the manner in which they are

levied.

2. There shall be regarded as taxes on income all taxes imposed on total

income or on elements of income, including taxes on gains from the alienation of

movable or immovable property.

It is hereby declared

(a)

that the arrangements specified in the Convention

set out in the Schedule to this Order (hereinafter referred to as

"the Convention") have been made with the United Mexican

States with a view to affording relief from double taxation in

relation to the following taxes imposed by the laws of the

United Mexican States

(i)

the federal income tax;

(ii)

the business flat rate tax;

(b) that it is expedient that those arrangements should

have effect following the entry into force of the Convention and

in accordance with the relevant provisions of the Convention;

(c)

that the Convention shall enter into force on such

date as may be announced by notice in the Gazette.

The existing taxes to which the Convention shall apply are in particular

a)

in Mexico

the federal income tax; and

the business flat rate tax;

(hereinafter referred to as "Mexican tax");

b)

in Malta

the income tax;

(hereinafter referred to as "Malta tax").

The Convention shall apply also to any identical or substantially similar

taxes that are imposed after the date of signature of the Convention in addition to,

or in place of, the existing taxes. The competent authorities of the Contracting

States shall notify each other of any significant changes that have been made in

their taxation laws.

ARTICLE 3

GENERAL DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise

requires

a)

the term "Mexico" means the United Mexican States, when used

in a geographical sense, includes the territory of the United Mexican States,

as well as the integrated parts of the Federation, the islands, including the

reefs and cays in the adjacent waters, the islands of Guadalupe and

Revillagigedo, the continental shelf and the seabed and sub-soil of the

islands, cays and reefs, the waters of the territorial seas and the inland waters

and beyond them the areas over which, in accordance with the international

law, Mexico may exercise its sovereign rights of exploration and exploitation

of the natural resources of the seabed, sub-soil and the supra-jacent waters,

and the air space of the national territory to the extent and under conditions

established by international law;

b)

the term "Malta" means the Republic of Malta and, when used in

a geographical sense, means the Island of Malta, the Island of Gozo and the

other islands of the Maltese archipelago including the territorial waters

thereof, as well as any area of the sea-bed, its sub-soil and the superjacent

water column adjacent to the territorial waters, wherein Malta exercises

sovereign rights, jurisdiction, or control in accordance with international law

and its national law, including its legislation relating to the exploration of the

continental shelf and exploitation of its natural resources;

c)

the terms "a Contracting State" and "the other Contracting State"

mean Mexico or Malta, as the context requires;

d)

the term "person" includes an individual, a company and any

other body of persons;

e)

the term "company" means any body corporate or any entity that

is treated as a body corporate for tax purposes;

f)

the term "enterprise" applies to the carrying on of any business;

g)

the terms "enterprise of a Contracting State" and "enterprise of

the other Contracting State" mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident of

the other Contracting State;

h)

the term "international traffic" means any transport by a ship or

aircraft operated by a resident of a Contracting State, except when the ship or

aircraft is operated solely between places in the other Contracting State;

i)

the term "business" includes the performance of professional

services and of other activities of an independent character;

j)

the term "competent authority" means

(i)

in Mexico, the Ministry of Finance and Public Credit;

(ii) in Malta, the Minister responsible for finance or his

authorised representative;

k)

the term "national" in relation to a Contracting State, means

(i) any individual

possessing

the

nationality

of

that

Contracting State;

(ii) any legal person, partnership or association deriving its

status as such from the laws in force in that Contracting State.

2. As regards the application of the Convention at any time by a

Contracting State, any term not defined therein shall, unless the context otherwise

requires, have the meaning that it has at that time under the law of that State for the

purposes of the taxes to which the Convention applies, any meaning under the

applicable tax laws of that State prevailing over a meaning given to the term under

other laws of that State.

ARTICLE 4

RESIDENT

1. For the purposes of this Convention, the term "resident of a Contracting

State" means any person who, under the laws of that State, is liable to tax therein

by reason of his domicile, residence, place of management or any other criterion of

a similar nature, and also includes that State, and any political subdivision or local

authority thereof. This term, however, does not include any person who is liable to

tax in that State in respect only of income from sources in that State.

2. Where by reason of the provisions of paragraph 1 an individual is a

resident of both Contracting States, then his status shall be determined as follows

a)

he shall be deemed to be a resident only of the State in which he

has a permanent home available to him; if he has a permanent home available

to him in both States, he shall be deemed to be a resident only of the State

with which his personal and economic relations are closer (centre of vital

interests);

b)

if the State in which he has his centre of vital interests cannot be

determined, or if he has not a permanent home available to him in either

State, he shall be deemed to be a resident only of the State in which he has an

habitual abode;

c)

if he has an habitual abode in both States or in neither of them, he

shall be deemed to be a resident only of the State of which he is a national;

d)

if he is a national of both States or of neither of them, the

competent authorities of the Contracting States shall settle the question by

mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than an

individual is a resident of both Contracting States, the competent authorities of the

Contracting States shall endeavour to determine by mutual agreement the

Contracting State of which such person shall be deemed to be a resident for the

purposes of the Convention, having regard to its place of effective management,

the place where it is incorporated or otherwise constituted and any other relevant

factors. In the absence of such agreement, such person shall not be entitled to any

relief or exemption from tax provided by this Convention except to the extent and

in such manner as may be agreed upon by the competent authorities of the

Contracting States.

4. A partnership shall be considered resident of a Contracting State only to

the extent that the income it derives is subject to tax in that State as the income of a

resident of such State, either in the hands of the partnership or in the hands of its

partners.

ARTICLE 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, the term "permanent

establishment" means a fixed place of business through which the business of an

enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially

a)

a place of management;

b)

a branch;

c)

an office;

d)

a factory;

e)

a workshop, and

f)

a mine, an oil or gas well, a quarry or any other place of

extraction of natural resources.

3. The term "permanent establishment" likewise encompasses

a)

a building site or a construction, assembly or installation project

or supervisory activities in connection therewith, but only where such site,

project or activities continue for a period of more than 6 (six) months;

b)

the furnishing of services, including consultancy services, by an

enterprise through employees or other personnel engaged by the enterprise for

such purpose, but only where activities of that nature continue (for the same or a

connected project) within a Contracting State for a period or periods exceeding in

the aggregate 183 (one hundred and eighty three) days in any 12 (twelve) month

period;

c)

the performance of professional services or other activities of an

independent character by an individual, but only where those services or activities

continue within a Contracting State for a period or periods exceeding in the

aggregate 183 (one hundred and eighty three) days in any 12 (twelve) month

period.

For the purposes of computing the time limits referred to in paragraph 3,

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.

4. Notwithstanding the preceding provisions of this Article, the term

"permanent establishment" shall be deemed not to include

a)

the use of facilities solely for the purpose of storage, display or

delivery of goods or merchandise belonging to the enterprise;

b)

the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of storage, display or delivery;

c)

the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of processing by another enterprise;

d)

the maintenance of a fixed place of business solely for the

purpose of purchasing goods or merchandise or of collecting information, for

the enterprise;

e)

the maintenance of a fixed place of business solely for the

purpose of carrying on, for the enterprise, any other activity of a preparatory

or auxiliary character;

f)

the maintenance of a fixed place of business solely for any

combination of activities mentioned in sub-paragraphs a) to e), provided that

the overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

Notwithstanding the provisions of paragraphs 1 and 2, where a person -

other than an agent of an independent status to whom paragraph 7 applies - is

acting on behalf of an enterprise and has, and habitually exercises, in a Contracting

State an authority to conclude contracts in the name of the enterprise, that

enterprise shall be deemed to have a permanent establishment in that State in

respect of any activities which that person undertakes for the enterprise, unless the

activities of such person are limited to those mentioned in paragraph 4 which, if

exercised through a fixed place of business, would not make this fixed place of

business a permanent establishment under the provisions of that paragraph.

Notwithstanding the foregoing provisions of this Article, an insurance

enterprise of a Contracting State shall, except in regard to reinsurance, be deemed

to have a permanent establishment in the other Contracting State if it collects

premiums in the territory of that other State or insures risks situated therein

through a person other than an agent of an independent status to whom paragraph 7

applies.

An enterprise shall not be deemed to have a permanent establishment in

a Contracting State merely because it carries on business in that State through a

broker, general commission agent or any other agent of an independent status,

provided that such persons are acting in the ordinary course of their business and

that in their commercial or financial relations with the enterprise conditions are not

made or imposed that differ from those generally agreed to by independent agents.

The fact that a company which is a resident of a Contracting State

controls or is controlled by a company which is a resident of the other Contracting

State, or which carries on business in that other State (whether through a

permanent establishment or otherwise), shall not of itself constitute either

company a permanent establishment of the other.

ARTICLE 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Contracting State from immovable

property (including income from agriculture or forestry) situated in the other

Contracting State may be taxed in that other State.

2. The term "immovable property" shall have the meaning which it has

under the law of the Contracting State in which the property in question is situated.

The term shall in any case include property accessory to immovable property,

livestock and equipment used in agriculture and forestry, rights to which the

provisions of general law respecting landed property apply, usufruct of immovable

property and rights to variable or fixed payments as consideration for the working

of, or the right to work, mineral deposits, sources and other natural resources;

ships, boats and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the

direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income

from immovable property of an enterprise.

ARTICLE 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only

in that State unless the enterprise carries on business in the other Contracting State

through a permanent establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be taxed in the other State

but only so much of them as is attributable to

a)

that permanent establishment;

b)

sales in that other State of goods or merchandise of the same or

similar kind as the goods or merchandise sold through that permanent

establishment.

However, the profits derived from the sales described in subparagraph

b) 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 Convention.

2. Subject to the provisions of paragraph 3, where an enterprise of a

Contracting State carries on business in the other Contracting State through a

permanent establishment situated therein, there shall in each Contracting State be

attributed to that permanent establishment the profits which it might be expected to

make if it were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes of the business

of the permanent establishment, including executive and general administrative

expenses so incurred, whether in the State in which the permanent establishment is

situated or elsewhere.

4. Insofar as it has been customary in a Contracting State to determine the

profits to be attributed to a permanent establishment on the basis of an

apportionment of the total profits of the enterprise to its various parts, nothing in

paragraph 2 shall preclude that Contracting State from determining the profits to

be taxed by such an apportionment as may be customary; the method of

apportionment adopted shall, however, be such that the result shall be in

accordance with the principles contained in this Article.

5. No profits shall be attributed to a permanent establishment by reason of

the mere purchase by that permanent establishment of goods or merchandise for

the enterprise.

6. For the purposes of the preceding paragraphs, the profits to be attributed

to the permanent establishment shall be determined by the same method year by

year unless there is good and sufficient reason to the contrary.

7. Where profits include items of income which are dealt with separately

in other Articles of this Convention, then the provisions of those Articles shall not

be affected by the provisions of this Article.

ARTICLE 8

SHIPPING AND AIR TRANSPORT

1. Profits of a resident of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in that State.

2. Profits referred to in paragraph 1 shall not include profits from land

transportation.

3. For the purposes of this Article, profits from the operation of ships or

aircraft in international traffic by a resident of a Contracting State include profits

from the rental of ships or aircraft on a full (time or voyage) basis. They also

include profits from the rental of ships or aircraft on a bareboat basis if such ships

or aircraft are operated in international traffic by the lessee and are derived by a

resident of a Contracting State engaged in the operation of ships or aircraft in

international traffic.

4. For the purposes of this Article and notwithstanding the provisions of

Article 12, profits of a resident of a Contracting State from the use or rental of

containers (including trailers, barges and related equipment for the transport of

containers) used in international traffic shall be taxable only in that State where

such use or rental is incidental to the operation of ships or aircraft in international

traffic.

5. The provisions of paragraph 1 shall also apply to profits from the

participation in a pool, a joint business or an international operating agency.

ARTICLE 9

ASSOCIATED ENTERPRISES

1. Where

a)

an enterprise of a Contracting State participates directly or

indirectly in the management, control or capital of an enterprise of the other

Contracting State, or

b)

the same persons participate directly or indirectly in the

management, control or capital of an enterprise of a Contracting State and an

enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in

their commercial or financial relations which differ from those which would be

made between independent enterprises, then any profits which would, but for those

conditions, have accrued to one of the enterprises, but, by reason of those

conditions, have not so accrued, may be included in the profits of that enterprise

and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that

State - and taxes accordingly - profits on which an enterprise of the other

Contracting State has been charged to tax in that other State and the profits so

included are profits which would have accrued to the enterprise of the first-

mentioned State if the conditions made between the two enterprises had been those

which would have been made between independent enterprises, then that other

State shall, make an appropriate adjustment to the amount of the tax charged

therein on those profits. In determining such adjustment, due regard shall be had to

the other provisions of this Convention and the competent authorities of the

Contracting States shall if necessary consult each other.

ARTICLE 10

DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting State

to a resident of the other Contracting State being the beneficial owner of the

dividends shall be taxable only in the last mentioned State.

2. The term "dividends" as used in this Article means income from shares,

"jouissance" shares or "jouissance" rights, mining shares, founders’ shares or other

rights, not being debt-claims, participating in profits, as well as income from other

corporate rights and other income which is subjected to the same taxation

treatment as income from shares by the laws of the State of which the company

making the distribution is a resident.

3. The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the dividends, being a resident of a Contracting State, carries on business

in the other Contracting State of which the company paying the dividends is a

resident, through a permanent establishment situated therein, and the holding in

respect of which the dividends are paid is effectively connected with such

permanent establishment. In such case the provisions of Article 7 shall apply.

4. Where a company which is a resident of a Contracting State derives

profits or income from the other Contracting State, that other State may not impose

any tax on the dividends paid by the company, except insofar as such dividends are

paid to a resident of that other State or insofar as the holding in respect of which

the dividends are paid is effectively connected with a permanent establishment

situated in that other State, nor subject the company's undistributed profits to a tax

on the company's undistributed profits, even if the dividends paid or the

undistributed profits consist wholly or partly of profits or income arising in such

other State.

ARTICLE 11

INTEREST

1. Interest 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 interest may also be taxed in the Contracting State in

which it arises and according to the laws of that State, but if the beneficial owner

of the interest is a resident of the other Contracting State, the tax so charged shall

not exceed

a)

5 per cent of the gross amount of the interest from loans granted

by a bank;

b)

10 per cent of the gross amount of the interest in all other cases.

3. Notwithstanding the provisions of paragraph 2, interest referred to in

paragraph 1 shall be taxable only in the Contracting State in which the beneficial

owner is a resident if

a)

the beneficial owner is a Contracting State, a political subdivision

or a local authority thereof, or the Central Bank of a Contracting State;

b)

the interest is paid by any of the entities mentioned in sub-

paragraph a);

c)

the interest arises in Malta and is paid in respect of a loan for a

period of not less than 3 (three) years granted, guaranteed or insured by

Banco Nacional de Comercio Exterior, S.N.C., Nacional Financiera, S.N.C.

or Banco Nacional de Obras y Servicios Públicos, S.N.C., or by any other

institution, as may be agreed from time to time between the competent

authorities of the Contracting States; or

d)

the interest arises in Mexico and is paid in respect of a loan for a

period of not less than 3 (three) years granted, guaranteed or insured, by any

other institution, as may be agreed from time to time between the competent

authorities of the Contracting States.

4. The term "interest" as used in this Article means income from debt-

claims of every kind, whether or not secured by mortgage and whether or not

carrying a right to participate in the debtor’s profits, and in particular, income from

government securities and income from bonds or debentures, including premiums

and prizes attaching to such securities, bonds or debentures, as well as all other

income that is treated as income from money lent by the laws of the Contracting

State in which the income arises. The term "interest" shall not include any item of

income which is considered as a dividend under the provisions of paragraph 2 of

Article 10.

5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial

owner of the interest, being a resident of a Contracting State, carries on business in

the other Contracting State in which the interest arises, through a permanent

establishment situated therein and the debt-claim in respect of which the interest is

paid is effectively connected with such permanent establishment. In such case the

provisions of Article 7 shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer is

a resident of that State. Where, however, the person paying the interest, whether he

is a resident of a Contracting State or not, has in a Contracting State a permanent

establishment and such interest is borne by such permanent establishment, then

such interest shall be deemed to arise in the State in which the permanent

establishment is situated.

7. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of

the interest exceeds, for whatever reason, the amount which would have been

agreed upon by the payer and the beneficial owner in the absence of such

relationship, the provisions of this Article shall apply only to the last-mentioned

amount. In such case, the excess part of the payments shall remain taxable

according to the laws of each Contracting State, due regard being had to the other

provisions of this Convention.

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

of the royalties is a resident of the other Contracting State, the tax so charged shall

not exceed 10 per cent of the gross amount of the royalties.

3. The term "royalties" as used in this Article means payments of any kind

received as a consideration for

a)

the use of, or the right to use, any patent, trade mark, design or

model, plan, secret formula or process;

b)

the use of, or the right to use, any industrial, commercial or

scientific equipment;

c)

the supply of information concerning industrial, commercial or

scientific experience;

d)

the use of, or the right to use, any copyright of literary, artistic or

scientific work, including cinematograph films and films or tapes for

television or radio broadcasting.

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.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the royalties, being a resident of a Contracting State, carries on business

in the other Contracting State in which the royalties arise, through a permanent

establishment situated therein, and the right or property in respect of which the

royalties are paid is effectively connected with such permanent establishment. In

such case the provisions of Article 7 shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer

is a resident of that State. Where, however, the person paying the royalties,

whether he is a resident of one of the Contracting States or not, has in a

Contracting State a permanent establishment and such royalties are borne by such

permanent establishment, then the royalties shall be deemed to arise in the State in

which the permanent establishment is situated.

6. Where by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of

the royalties exceeds, for whatever reason, the amount which would have been

agreed upon by the payer and the beneficial owner in the absence of such

relationship, the provisions of this Article shall apply only to the last-mentioned

amount. In such case, the excess part of the payments shall remain taxable

according to the laws of each Contracting State, due regard being had to the other

provisions of this Convention.

ARTICLE 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of

immovable property referred to in Article 6 and situated in the other Contracting

State may be taxed in that other State.

2. Gains derived by a resident of a Contracting State from the alienation of

shares deriving more than 50 per cent of their value directly or indirectly from

immovable property situated in the other Contracting State may be taxed in that

other State.

3. In addition to gains taxable in accordance with the provisions of the

preceding paragraphs, gains derived by a resident of a Contracting State from the

alienation of shares, participation or other rights in the capital of a company or other

legal person that is a resident of the other Contracting State may be taxed in that other

State if the recipient of the gain, at any time during the 12 (twelve) month period

preceding such alienation, together with all persons who are related to the recipient, had

a participation of at least 25 per cent in the capital of that company or other legal

person.

4. Gains from the alienation of movable property forming part of the

business property of a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State, including such gains from the

alienation of such a permanent establishment (alone or with the whole enterprise),

may be taxed in that other State.

5. Gains derived by a resident of a Contracting State from the alienation of

ships or aircraft operated in international traffic, or from movable property

pertaining to the operation of such ships or aircraft, shall be taxable only in that

State.

6. Gains from the alienation of any property other than that referred to in

the preceding paragraphs of this Article, shall be taxable only in the Contracting

State of which the alienator is a resident.

ARTICLE 14

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15, 17 and 18, salaries, wages and

other similar remuneration derived by a resident of a Contracting State in respect

of an employment shall be taxable only in that State unless the employment is

exercised in the other Contracting State. If the employment is so exercised, such

remuneration as is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by

a resident of a Contracting State in respect of an employment exercised in the other

Contracting State shall be taxable only in the first-mentioned Contracting State if

a)

the recipient is present in the other State for a period or periods

not exceeding in the aggregate 183 (one hundred and eighty three) days in

any 12 (twelve) month period commencing or ending in the fiscal year

concerned, and

b)

the remuneration is paid by, or on behalf of, an employer who is

not a resident of the other State, and

c)

the remuneration is not borne by a permanent establishment

which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft operated

by a resident of a Contracting State in international traffic, may be taxed in that

State.

ARTICLE 15

DIRECTORS’ FEES

Directors’ fees and other similar payments derived by a resident of a

Contracting State in his capacity as a member of the board of directors or any other

organ of a company which is a resident of the other Contracting State, may be

taxed in that other State.

ARTICLE 16

ARTISTES AND SPORTSPERSONS

1. Notwithstanding the provisions of Articles 7 and 14, income derived by

a resident of a Contracting State as an entertainer, such as a theatre, motion picture,

radio or television artiste, or a musician, or as a sportsperson, from his personal

activities as such exercised in the other Contracting State, may be taxed in that

other State.

2. Where income in respect of personal activities exercised by an

entertainer or a sportsperson in his capacity as such accrues not to the entertainer

or sportsperson himself but to another person, that income may, notwithstanding

the provisions of Articles 7 and 14, be taxed in the Contracting State in which the

activities of the entertainer or sportsperson are exercised.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derived

by a resident of a Contracting State as an entertainer or sportsperson shall be

exempt from tax by the other Contracting State if the visit to that other State is

substantially supported by public funds of the first mentioned State or a political

subdivision or local authority thereof.

ARTICLE 17

PENSIONS

Subject to the provisions of paragraph 2 of Article 18, pensions and

other similar remuneration paid to a resident of a Contracting State in

consideration of past employment shall be taxable only in that State.

ARTICLE 18

GOVERNMENT SERVICE

1. a)

Salaries, wages and other similar remuneration, other than a

pension, paid by a Contracting State or a political subdivision or a local authority

thereof to an individual in respect of services rendered to that State or subdivision

or authority shall be taxable only in that State.

b)

However, such salaries, wages and other similar remuneration

shall be taxable only in the other Contracting State if the services are rendered in

that State and the individual is a resident of that State who

(i)

is a national of that State; or

(ii) did not become a resident of that State solely for the

purpose of rendering the services.

2. a)

Notwithstanding the provisions of paragraph 1, any pension and

other similar remuneration paid by, or out of funds created by, a Contracting State

or a political subdivision or a local authority thereof to an individual in respect of

services rendered to that State or subdivision or authority shall be taxable only in

that State.

b)

However, such pension and other similar remuneration shall be

taxable only in the other Contracting State if the individual is a resident of, and a

national of, that State.

3. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries,

wages, pensions and other similar remuneration, in respect of services rendered in

connection with a business carried on by a Contracting State or a political

subdivision or a local authority thereof.

ARTICLE 19

STUDENTS

Payments which a student or business apprentice who is or was

immediately before visiting a Contracting State a resident of the other Contracting

State and who is present in the first-mentioned State solely for the purpose of his

education or training receives for the purpose of his maintenance, education or

training shall not be taxed in that State, provided that such payments arise from

sources outside that State.

ARTICLE 20

OTHER INCOME

Items of income of a resident of a Contracting State not dealt with in the

foregoing Articles of this Convention and arising in the other Contracting State

may be taxed in that other State.

ARTICLE 21

ELIMINATION OF DOUBLE TAXATION

1. 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 Malta tax paid on income arising in Malta, 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 Malta and from which the first-

mentioned company receives dividends, the Malta tax paid by the

distributing company with respect to the profits out of which the dividends

are paid.

2. In the case of Malta, double taxation shall be eliminated as follows

Subject to the provisions of the law of Malta regarding the allowance of

a credit against Malta tax in respect of foreign tax, where, in accordance with the

provisions of this Convention, there is included in a Malta assessment income

from sources within Mexico, the Mexican tax on such income shall be allowed as a

credit against the relative Malta tax payable thereon.

3. Where in accordance with any provision of the Convention 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.

ARTICLE 22

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other

Contracting State to any taxation or any requirement connected therewith, which is

other or more burdensome than the taxation and connected requirements to which

nationals of that other State in the same circumstances, in particular with respect to

residence, are or may be subjected. This provision shall, notwithstanding the

provisions of Article 1, also apply to persons who are not residents of one or both

of the Contracting States.

2. The taxation on a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State shall not be less favourably

levied in that other State than the taxation levied on enterprises of that other State

carrying on the same activities. This provision shall not be construed as obliging a

Contracting State to grant to residents of the other Contracting State any personal

allowances, reliefs and reductions for taxation purposes on account of civil status

or family responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of

Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other

disbursements paid by an enterprise of a Contracting State to a resident of the other

Contracting State shall, for the purpose of determining the taxable profits of such

enterprise, be deductible under the same conditions as if they had been paid to a

resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by one or more residents of the

other Contracting State, shall not be subjected in the first-mentioned State to any

taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which other similar

enterprises of the first-mentioned State are or may be subjected.

5. The provisions of this Article shall, notwithstanding the provisions of

Article 2, apply to taxes of every kind and description.

ARTICLE 23

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of the

Contracting States result or will result for him in taxation not in accordance with

the provisions of this Convention, he may, irrespective of the remedies provided by

the domestic law of those States, present his case to the competent authority of the

Contracting State of which he is a resident or, if his case comes under paragraph 1

of Article 22, to that of the Contracting State of which he is a national. The case

must be presented within 3 (three) years from the first notification of the action

resulting in taxation not in accordance with the provisions of the Convention.

2. The competent authority shall endeavour, if the objection appears to it

to be justified and if it is not itself able to arrive at a satisfactory solution, to

resolve the case by mutual agreement with the competent authority of the other

Contracting State, with a view to the avoidance of taxation which is not in

accordance with the Convention, provided that the competent authority of the

other Contracting State is notified of the case within 4 (four) and a half years from

the due date or the date of filing of the return in that other State, whichever is later.

In such case, any agreement reached shall be implemented within 10 (ten) years

from the due date or the date of filing of the return in that other State, whichever is

later, or a longer period if permitted by the domestic law of that other State.

3. The competent authorities of the Contracting States shall endeavour to

resolve by mutual agreement any difficulties or doubts arising as to the

interpretation or application of the Convention. They may also consult together for

the elimination of double taxation in cases not provided for in the Convention.

4. The competent authorities of the Contracting States may communicate

with each other directly, including through a joint commission consisting of

themselves or their representatives, for the purpose of reaching an agreement in the

sense of the preceding paragraphs.

5. Notwithstanding any other treaties of which the Contracting States are

or may become parties, any dispute over a measure taken by a Contracting State

involving a tax covered by Article 2 or, in the case of non-discrimination, any

taxation measure taken by a Contracting State, including a dispute whether this

Convention applies, shall be settled only under the Convention, unless the

competent authorities of the Contracting States agree otherwise.

ARTICLE 24

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such

information as is forseeably relevant for carrying out the provisions of this

Convention or to the administration or enforcement of the domestic laws

concerning taxes of every kind and description imposed on behalf of the

Contracting States, insofar as the taxation thereunder is not contrary to the

Convention. The exchange of information is not restricted by Articles 1 and 2.

2. Any information received under paragraph 1 by a Contracting State

shall be treated as secret in the same manner as information obtained under the

domestic laws of that State and shall be disclosed only to persons or authorities

(including courts and administrative bodies) concerned with the assessment or

collection of, the enforcement or prosecution in respect of, the determination of

appeals in relation to the taxes referred to in paragraph 1, or the oversight of the

above. Such persons or authorities shall use the information only for such

purposes. They may disclose the information in public court proceedings or in

judicial decisions. Notwithstanding the foregoing, information received by a

Contracting State may be used for other purposes when such information may be

used for such other purposes under the laws of both States and the competent

authority of the supplying State authorises such use.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as

to impose on a Contracting State the obligation to

a)

carry out administrative measures at variance with the laws and

administrative practice of that or of the other Contracting State;

b)

supply information which is not obtainable under the laws or in

the normal course of the administration of that or of the other Contracting

State;

c)

supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, or information,

the disclosure of which would be contrary to public policy (ordre public).

4. If information is requested by a Contracting State in accordance with

this Article, the other Contracting State shall use its information gathering

measures to obtain the requested information, even though that other State may not

need such information for its own tax purposes. The obligation contained in the

preceding sentence is subject to the limitations of paragraph 3 but in no case shall

such limitations be construed to permit a Contracting State to decline to supply

information solely because it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a

Contracting State to decline to supply information solely because the information

is held by a bank, other financial institution, nominee or person acting in an agency

or fiduciary capacity or because it relates to ownership interests in a person.

ARTICLE 25

ASSISTANCE IN COLLECTION

1. The Contracting States shall lend assistance to each other in the

collection of revenue claims. This assistance is not restricted by Articles 1 and 2.

The competent authorities of the Contracting States may by mutual agreement

settle the mode of application of this Article.

2. The term "revenue claim" as used in this Article means an amount owed

in respect of taxes of every kind and description imposed on behalf of the

Contracting States, insofar as the taxation thereunder is not contrary to this

Convention or any other instrument to which the Contracting States are parties, as

well as interest, administrative penalties and costs of collection or conservancy

related to such amount.

3. When a revenue claim of a Contracting State is enforceable under the

laws of that State and is owed by a person who, at that time, cannot, under the laws

of that State, prevent its collection, that revenue claim shall, at the request of the

competent authority of that State, be accepted for purposes of collection by the

competent authority of the other Contracting State. That revenue claim shall be

collected by that other State in accordance with the provisions of its laws

applicable to the enforcement and collection of its own taxes as if the revenue

claim were a revenue claim of that other State.

4. When a revenue claim of a Contracting State is a claim in respect of

which that State may, under its law, take measures of conservancy with a view to

ensure its collection, that revenue claim shall, at the request of the competent

authority of that State, be accepted for purposes of taking measures of conservancy

by the competent authority of the other Contracting State. That other State shall

take measures of conservancy in respect of that revenue claim in accordance with

the provisions of its laws as if the revenue claim were a revenue claim of that other

State even if, at the time when such measures are applied, the revenue claim is not

enforceable in the first-mentioned State or is owed by a person who has a right to

prevent its collection.

5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim

accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in that

State, be subject to the time limits or accorded any priority applicable to a revenue

claim under the laws of that State by reason of its nature as such. In addition, a

revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4

shall not, in that State, have any priority applicable to that revenue claim under the

laws of the other Contracting State.

6. Proceedings with respect to the existence, validity or the amount of a

revenue claim of a Contracting State shall only be brought before the courts or

administrative bodies of that State.

7. Where, at any time after a request has been made by a Contracting State

under paragraph 3 or 4 and before the other Contracting State has collected and

remitted the relevant revenue claim to the first-mentioned State, the relevant

revenue claim ceases to be

a)

in the case of a request under paragraph 3, a revenue claim of the

first-mentioned State that is enforceable under the laws of that State and is

owed by a person who, at that time, cannot, under the laws of that State,

prevent its collection, or

b)

in the case of a request under paragraph 4, a revenue claim of the

first-mentioned State in respect of which that State may, under its laws, take

measures of conservancy with a view to ensure its collection

the competent authority of the first-mentioned State shall promptly notify the

competent authority of the other State of that fact and, at the option of the other

State, the first-mentioned State shall either suspend or withdraw its request.

8. In no case shall the provisions of this Article be construed so as to

impose on a Contracting State the obligation

a)

to carry out administrative measures at variance with the laws

and administrative practice of that or of the other Contracting State;

b)

to carry out measures which would be contrary to public policy

(ordre public);

c)

to provide assistance if the other Contracting State has not

pursued all reasonable measures of collection or conservancy, as the case

may be, available under its laws or administrative practice;

d)

to provide assistance in those cases where the administrative

burden for that State is clearly disproportionate to the benefit to be derived

by the other Contracting State.

ARTICLE 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Convention shall affect the fiscal privileges of members

of diplomatic missions or consular posts under the general rules of international

law or under the provisions of special agreements.

ARTICLE 27

ENTRY INTO FORCE

1. The Contracting States shall notify each other, through diplomatic

channels, the completion of the procedures required by their domestic law for the

entry into force of this Convention.

2. This Convention shall enter into force 30 (thirty) days after the date of

receipt of the later of the notifications referred to in paragraph 1 and its provisions

shall have effect

a)

in Malta

in respect of taxes on income derived during any calendar year

or accounting period, as the case may be, beginning on or after the first

day of January immediately following the date on which the Convention

enters into force;

b)

in Mexico

(i) in respect of taxes withheld at source, to income paid or

credited on or after the first day of January in the calendar year next

following that in which the Convention enters into force;

(ii) in respect of other taxes, for any taxable year beginning on

or after the first day of January in the calendar year next following that

in which the Convention enters into force.

ARTICLE 28

TERMINATION

This Convention shall remain in force until terminated by a Contracting

State. Either Contracting State may terminate the Convention, through diplomatic

channels, by giving notice of termination at least 6 (six) months before the end of

any calendar year beginning after the expiration of a period of 5 (five) years from

the date of its entry into force. In such event, the Convention shall cease to have

a)

in Malta

in respect of taxes on income derived during any calendar year

or accounting period, as the case may be, beginning on or after the first

day of January immediately following the date on which the notice is

given.

b)

in Mexico

(i) in respect of taxes withheld at source, to income paid or

credited on or after the first day of January in the calendar year next

following that in which the notice is given;

(ii) in respect of other taxes, for any taxable year beginning on

or after the first day of January in the calendar year next following that

in which the notice is given.

IN WITNESS whereof the undersigned, being duly authorised thereto, have

signed this Convention.

DONE in duplicate at Rome, this 17th day of December of two thousand and

twelve, in the Spanish and English languages, both texts being equally authentic.

FOR THE UNITED MEXICAN STATES

FOR MALTA

Miguel Ruíz-Cabañas Izquierdo

Carmel Inguanez

PROTOCOL

At the moment of signing the Convention this day concluded between the

United Mexican States and Malta for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with Respect to Taxes on Income, the undersigned

have agreed upon the following provisions which shall be an integral part of the

Convention.

1. The competent authorities of the Contracting States shall by mutual

agreement settle the mode of application of paragraph 4 of Article 4 and

subparagraph f), paragraph 4 of Article 5 of the Convention.

2. Ad paragraph 3 of Article 13

I.

For purposes of paragraph 3 of Article 13, gains from the alienation of

shares of a company resident in one of the States shall be taxable only in the other

State, if

A. the alienation of shares takes place between members of the same group

of companies to the extent that the remuneration received by the transferor consists

of shares or other rights in the capital of the transferee or of another company that

owns directly or indirectly 80 per cent or more of the voting rights and value of the

transferee and that is resident of one of the States or of a country with which

Mexico has a broad exchange of information agreement in terms of the

Administrative Tax Regulations (Resolución Miscelánea Fiscal), but only if the

following conditions are met

a)

the transferee is a company resident of one of the States or of a

country with which Mexico has a broad exchange of information agreement

in terms of the Administrative Tax Regulations (Resolución Miscelánea

Fiscal);

b)

before and immediately after the transfer, the transferor or the

transferee owns, directly or indirectly, 80 per cent or more of the voting

rights and value of the other, or a company resident in one of the States or of

a country with which Mexico has a broad exchange of information agreement

in terms of the Administrative Tax Regulations (Resolución Miscelánea

Fiscal) owns directly or indirectly (through companies resident in one of

those States) 80 per cent or more of the voting rights and value of each of

them; and

c)

for the purpose of determining the gain on any subsequent

disposition,

(i) the initial cost of the shares for the transferee is determined

based on the cost it had for the transferor, increased by any cash or other

remuneration other than shares or other rights paid; or

(ii) the gain is measured by another method that gives

substantially the same result.

Notwithstanding the foregoing, if cash or other remuneration other than

shares or other rights is received, the amount of the gain (limited to the amount of

cash or other remuneration other than shares or other rights received), may be

taxed by the State of which the company of which the shares are alienated is a

resident.

B. the gains have been derived by an insurance company or a pension fund.

The term "pension fund" means any person, entity or trust, including in the case of

Mexico, the "Afores y Siefores", established in a Contracting State

1°

that administers pension schemes or provides retirement benefits;

or

2°

that earns income on behalf of one or more persons operated to

administer pension schemes or provide retirement benefits; and

provided it is either

1°

in the case of Mexico, regulated by one or more of the following

authorities, the National Commission for the Pension System ("CONSAR"),

National Insurance and Surety Commission ("CNSF"), National Commission

of Banking and Securities ("CNBV") or the Ministry of Finance and Public

Credit; or

2°

in the case of Malta, regulated by the Malta Financial Services

Authority.

C. the alienation takes place through a recognized Stock Exchange.

However, when a resident of one of the States held, directly or indirectly, 10 per

cent or more of the shares of a company resident in the other State, and

a)

in a period of 24 (twenty four) months such resident alienates 10

per cent or more of the shares through one or several simultaneous or

successive transactions through a recognized Stock Exchange; or

b)

the alienation is carried out within the recognized stock exchange

through any kind of transaction that prevents such resident to accept other

offers than those received before and during the period in which the

alienation takes place, the gain derived from that alienation may be taxed in

the State of which the company of which the shares are alienated is a

resident.

II. The term "recognized Stock Exchange" as mentioned in subparagraph C

of paragraph I of this Article, means the Mexican Stock Exchange (Bolsa

Mexicana de Valores) and the Malta Stock Exchange.

3. I.

The provisions of Articles 11 and 12 of the Convention shall not apply

in respect of any interest or royalties paid in the course of a transaction or series of

transactions which is structured in such a way that a resident of a Contracting State

entitled to the benefits of the Convention receives an item of income arising in the

other Contracting State but the resident pays, directly or indirectly, at least 50 per

cent of that income (at any time or in any form) to another person who is not a

resident of either Contracting State and who, if it received that item of income

directly from the other Contracting State, would not be entitled under an agreement

for the avoidance of double taxation between the State in which that other person is

resident and the Contracting State in which the income arises, or otherwise, to

benefits with respect to that item of income which are equivalent to, or more

favourable than, those available under the Convention to a resident of a

Contracting State and the main purpose of such structuring is obtaining benefits

under the Convention.

II. No provision of the Convention, except for the Article 24 "Exchange of

information", shall apply to

a)

an item of income that is exempt from tax in a Contracting State

of which the beneficial owner of the income is a resident or is taxable in that

State in the hands of that resident at a rate lower than the rate applicable to

the same item of income derived by other residents of that State that do not

benefit from such exemption or rate; or

b)

an item of income beneficially owned by a resident of a

Contracting State that benefits from a deduction, rebate or other concession

or benefit that is provided directly or indirectly in relation to that item of

income, other than a credit for foreign tax paid, and is not available to other

residents of that State.

III. Before a resident of a Contracting State is denied relief from taxation in

the other Contracting State by reason of the preceding paragraphs, the competent

authorities of the Contracting States shall consult each other. Likewise, the

competent authorities of the Contracting States may consult each other with regard

to the application of this Article.

IV. The provisions of this Convention shall not prevent a Contracting State

from applying its provisions regarding thin capitalisation and controlled foreign

corporation (in the case of Mexico, preferential tax regimes).

IN WITNESS whereof the undersigned, being duly authorised thereto, have

signed this Protocol.

DONE in duplicate at Rome, this 17th day of December of two thousand and

twelve, in the Spanish and English languages, both texts being equally authentic.

FOR THE UNITED MEXICAN STATES

FOR MALTA

Miguel Ruíz-Cabañas Izquierdo

Carmel Inguanez

€2.52