Notice 2008-3

United States. Internal Revenue Bulletin, January, 2008 by Anonymous

Creditability of Mexican Single Rate Business Tax

The Internal Revenue Service (IRS) and the Treasury Department are evaluating the impuesto empresarial a tasa unica (IETU), a single rate business tax recently adopted by Mexico effective January 1, 2008, to determine whether it is a creditable income tax under Article 24(1) (Relief from Double Taxation) of the Convention Between the Government of the United States of America 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 (the Treaty).

Article 24(1) of the Treaty generally provides that the United States will allow a credit for income tax paid to Mexico by or on behalf of a U.S. resident. The taxes in paragraphs 3...

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