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HMRC internal manual

Double Taxation Relief Manual

Mexico: Underlying Tax

(1) Documents needed to support the underlying tax claim

The accounts showing the profits used to pay the dividend and the company tax declaration (Declaracion Anual del Impuesto Sobre la Renta) showing the tax payable on these profits will be required by the Underlying Tax Group.

(2) Spared tax

The calculation of tax spared prepared by the Mexican company’s accountants should be sent to the Underlying Tax Group together with the certificate granting tax sparing status.

(3) Reserves

Relevant profits are reduced by transfers of 5% of the annual net profit to a legal reserve until that reserve is equal to 20% of the subscribed capital.