1E9Ct5D

120C H A P T E R V I Ipaying the credit is three years or more, and (3) loans granted to institutionsauthorized to receive donations, provided they are granted or guaranteed withpreferential conditions by foreign financial institutions;ii) At a rate of 4.9 percent: (1) interest on income from negotiable instruments offeredto the investing public from loans from lending institutions, special purpose financialinstitutions, or secondary financial institutions, as well as those offeredthrough banks or securities firms in a country with which Mexico has a doubletaxation agreement, and (2) interest paid to foreign financial institutions in whichthe Federal Government has a capital investment. The income from interest mentionedin the previous section will be subject to a 10 percent tax rate when itdoes not comply with certain requisites established in the Mexican legislation;iii) At a rate of 10 percent: (1) interest paid to financial institutions belonging toForeign States, (2) interest paid to foreign banks, including investment banks,(3) interest paid to entities that sell or invest capital in Mexico coming fromsecurities issued and sold abroad to the investing public, (4) interest from negotiableinstruments sold by banks or securities firms in a country with whichMexico has not signed a double taxation treaty, and (5) interest paid for theacquisition of a right to collect an owed debt of any kind.The income from interest mentioned in the previous paragraph may be subjectto a tax of 4.9 percent when the actual beneficiary of the interest is a foreignerwith tax residency in a country with which Mexico has signed a doubletaxation agreement and provided certain requisites are complied with;iv) At a rate of 15 percent when the interest is paid to reinsurance companies andinterest that has been agreed to as interest on financial leasing contracts;v) At a rate of 21 percent, interest paid to: (1) credit institutions other than thosementioned previously, (2) foreign suppliers for the alienation of machinery andequipment which form part of the fixed assets of the purchaser, and (3) for thefinancing of machinery and equipment which form part of the fixed assets ofthe purchaser and in general for working capital loans or commercialization;vi) In other cases of income from interest, the general tax rate of 28 percent applies.Certain exceptions apply to some of the above income, and therefore it is necessary toanalyze each case individually.2.3.2. Double taxation treatiesAs we have already stated, in the case of foreign tax residents it is necessary to checkwhether one of the double taxations treaties signed by Mexico may apply. At the end ofthis chapter there is a table which shows the treaties entered into by Mexico and thosebeing negotiated as of 2007.