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Artigo 29.º — Denúncia

Vigente desde: 15/12/2000

A presente Convenção permanecerá em vigor enquanto não for denunciada por um dos Estados Contratantes. Qualquer Estado Contratante pode denunciar a Convenção por via diplomática, mediante um aviso prévio mínimo de seis meses antes do fim de qualquer ano civil posterior ao termo do período de cinco anos a contar da data da entrada em vigor da Convenção. Nesse caso, a Convenção deixará de se aplicar:

  1. a)Quanto aos impostos retidos na fonte, aos impostos cujo facto gerador surja em ou depois de 1 de Janeiro do ano civil imediatamente seguinte àquele em que o período especificado no referido aviso de denúncia expira;
  2. b)Quanto aos demais impostos, ao rendimento auferido em ou depois de 1 de Janeiro do ano civil imediatamente seguinte à data em que o período especificado no referido aviso de denúncia expira.

    Em testemunho do qual, os signatários, devidamente autorizados para o efeito, assinaram a presente Convenção.

    Feito em duplicado, na Cidade do México, em 11 de Novembro de 1999, nas línguas portuguesa, espanhola e inglesa, sendo todos os textos igualmente válidos. Em caso de divergência de interpretação, o texto inglês prevalecerá.

    Pela República Portuguesa:

    (ver documento original)

    Pelos Estados Unidos Mexicanos:

    (ver documento original)

    PROTOCOLO

    Ad artigo 2.º

  3. a)Entende-se que, no caso do México, o disposto no artigo 2.º não se aplica aos impostos sobre o rendimento exigidos pelas suas subdivisões políticas ou autoridades legais.
  4. b)Se o México introduzir impostos sobre o rendimento exigidos pelas suas subdivisões políticas ou autoridades locais, o México notificará as autoridades competentes de Portugal atempadamente e Portugal poderá solicitar a sua discussão com o objectivo de restabelecer o equilíbrio dos benefícios da Convenção, se necessário.

    Ad artigo 4.º

    Entende-se que, não obstante o disposto nesta Convenção, as reduções ou as isenções fiscais previstas nos artigos 8.º, 11.º, 12.º e 13.º desta Convenção não se aplicarão a qualquer pessoa que seja residente de um Estado Contratante e que, ao abrigo da legislação desse Estado, tenha direito a benefícios fiscais no âmbito do imposto sobre o rendimento, relativamente a rendimento com fonte no estrangeiro. Contudo, essa pessoa poderá ficar sujeita a imposto no outro Estado Contratante a uma taxa que não exceda 30% do montante bruto das royalties, juros ou mais-valias, desde que seja o beneficiário efectivo dessas royalties, juros ou mais-valias, seja uma sociedade residente do primeiro Estado Contratante, cujo capital seja detido, directa ou indirectamente, em mais de 70% por accionistas residentes desse Estado e não mais de 20% do seu rendimento bruto consista em rendimentos passivos, incluindo dividendos, juros, royalties ou mais-valias.

    Ad artigo 7.º

    No que respeita ao n.º 3, entende-se que essas deduções não serão concedidas relativamente às importâncias, se as houver, pagas (excepto como reembolso de despesas efectivamente suportadas) pelo estabelecimento estável à sede da empresa ou a qualquer um dos seus outros escritórios, a título de royalties, honorários ou outros pagamentos similares, como retribuição pela utilização de patentes ou de outros direitos ou como comissão por serviços específicos prestados ou por gestão, ou, salvo no caso de um estabelecimento bancário, como juros por empréstimos concedidos ao estabelecimento estável. De igual modo, na determinação do lucro de um estabelecimento estável, não serão tidas em consideração as importâncias cobradas (salvo como reembolso de despesas efectivamente suportadas) pelo estabelecimento estável à sede da empresa ou a qualquer um dos seus outros escritórios, a título de royalties, honorários ou outros pagamentos similares, como retribuição pela utilização de patentes ou de outros direitos ou como comissão por serviços específicos prestados ou por gestão, ou, salvo no caso de um estabelecimento bancário, como juros por empréstimos concedidos à sede da empresa ou a qualquer um dos seus outros escritórios.

    Ad artigo 8.º

    Entende-se que, para efeitos deste artigo, os lucros derivados da exploração de navios ou aeronaves no tráfego internacional incluem os lucros derivados da locação de navios ou aeronaves numa base integral (tempo ou viagem). Incluem, igualmente, os lucros provenientes da locação de navios ou aeronaves numa base de casco nu, se tais lucros forem acessórios dos lucros mencionados no n.º 1.

    Ad artigo 10.º

    Embora o imposto sobre as sucessões e doações por avença exigido por Portugal seja de facto um imposto sobre as sucessões e doações e não um imposto sobre o rendimento, fica acordado que se houver um aumento da taxa em vigor à data da assinatura desta Convenção tal aumento não será aplicável aos dividendos cujos beneficiários efectivos sejam residentes do México. Entende-se que as acções que tenham sido sujeitas a imposto sobre as sucessões e doações por avença não ficam sujeitas a imposto em Portugal no momento da sua transmissão por morte ou doação.

    Ad artigo 10.º, n.º 3

    Entende-se que o termo «dividendos» também inclui os lucros atribuídos ao abrigo de um acordo de associação em participação.

    Ad artigo 11.º, n.º 6

    Para efeitos do disposto na segunda parte do n.º 6 do artigo 11.º se o empréstimo for contraído pela sede da sociedade e o montante em questão afectar vários estabelecimentos estáveis ou instalações fixas situados em países diferentes, considerar-se-á que os juros têm origem no Estado Contratante em que o estabelecimento estável ou a instalação fixa estiver situado, mas apenas na medida em que sejam suportados por esse estabelecimento estável ou instalação fixa.

    Ad artigos 11.º e 12.º

    As disposições dos n.os 2 e 3 do artigo 11.º e do n.º 2 do artigo 12.º não se aplicam se o empréstimo relativamente ao qual os juros são pagos ou o contrato que der origem ao pagamento das royalties tiver sido celebrado com o objectivo principal de beneficiar daquelas disposições e não por razões económicas válidas.

    Se um Estado Contratante resolver negar o benefício da aplicação das disposições mencionadas a um residente do outro Estado Contratante, as autoridades competentes do Estado Contratante primeiramente mencionado deverão chegar a acordo com as autoridades competentes do outro Estado.

    Ad artigo 12.º, n.º 3

    Para efeitos deste número, o termo royalties também inclui a recepção ou o direito a receber, bem como o uso ou a concessão do uso em conexão com a televisão ou a rádio, imagens visuais, sons ou ambos, transmitidos ao público quer por satélite, cabo ou fibra óptica quer por tecnologia similar.

    Ad artigo 12.º, n.º 5

    Para efeitos do disposto na segunda parte do n.º 5 do artigo 12.º, quando a obrigação de pagar as royalties for contraída pela sede da empresa e o direito ou bem pelo qual forem pagas esteja efectivamente conexo com os vários estabelecimentos estáveis ou instalações fixas situados em países diferentes, então as royalties considerar-se-ão com origem no Estado Contratante em que o estabelecimento estável ou a instalação fixa se situe, mas apenas na medida em que o pagamento das royalties for suportado por esse estabelecimento estável ou instalação fixa.

    Ad artigo 17.º

    Entende-se que o n.º 3 do artigo 17.º visa aplicar-se aos casos em que um artista ou um desportista residente de um Estado Contratante obtém rendimentos derivados das suas actividades pessoais, indirectamente, através de outra pessoa, enquadráveis noutra categoria de rendimentos.

    Esses rendimentos ficarão sujeitos ao regime deste artigo, uma vez que se encontram intimamente relacionados com as suas actividades pessoais, como tais, no outro Estado Contratante.

    Ad artigo 23.º, n.º 2, alínea c)

    Não obstante esta disposição, se, de futuro, Portugal alterar a sua legislação interna e adoptar um método diferente para a eliminação da dupla tributação económica, esse novo método será aplicado para efeitos desta Convenção.

    Ad artigo 24.º

    Entende-se que o disposto no n.º 3 não será interpretado no sentido de impedir a aplicação por um Estado Contratante das disposições relativas à subcapitalização constantes da sua legislação interna, excepto naqueles casos em que as sociedades associadas possam provar que, devido às características especiais das suas actividades ou às suas circunstâncias económicas específicas, as condições estabelecidas ou fixadas entre estas empresas estão em conformidade com o princípio da livre concorrência.

    Ad artigo 26.º

    Entende-se que as autoridades competentes podem utilizar a informação trocada ao abrigo do artigo 26.º para a liquidação dos impostos sobre o rendimento para efeitos do imposto sobre o valor acrescentado.

    Em testemunho do qual os abaixo assinados, devidamente autorizados para o efeito, assinaram este Protocolo.

    Feito em duplicado, na Cidade do México, em 11 de Novembro de 1999, nas línguas portuguesa, espanhola e inglesa, sendo todos os textos igualmente válidos. Em caso de divergência de interpretação, o texto inglês prevalecerá.

    Pela República Portuguesa:

    (ver documento original)

    Pelos Estados Unidos Mexicanos:

    (ver documento original)

    (ver texto em língua espanhola no documento original)

    CONVENTION BETWEEN THE PORTUGUESE REPUBLIC AND THE UNITED MEXICAN STATES FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

    The Portuguese Republic and the United Mexican States, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, which shall hereafter be referred to as the «Convention», have agreed as follows:

    Article 1

    Personal scope

    This Convention shall apply to persons who are residents of one or both of the Contracting States.

    Article 2

    Taxes covered

  5. 1 -This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied, in accordance with this article.
  6. 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, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
  7. 3 -The existing taxes to which the Convention shall apply are in particular:
    1. a)In the case of Portugal:
      1. i)The personal income tax (imposto sobre o rendimento das pessoas singulares - IRS);
      2. ii)The corporate income tax (imposto sobre o rendimento das pessoas colectivas - IRC); and
      3. iii)The local surtax on corporate income tax (derrama);

        (hereinafter referred to as «Portuguese tax»);

    2. b)In the case of Mexico:

      The income tax (impuesto sobre la renta);

      (hereinafter referred to as «Mexican tax»).

  8. 4 -The Convention shall apply also to any identical or substantially similar taxes which 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 substantial changes which have been made in their respective taxation laws.

    Article 3

    General definitions

  9. 1 -For the purposes of this Convention, unless the context otherwise requires:
    1. a)The term «Portugal» means the territory of the Portuguese Republic situated in the European Continent, the archipelagos of Azores and Madeira, the respective territorial sea and any other zone in which according to Portuguese and International Law, the Portuguese Republic has sovereign rights or jurisdiction for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non living, of the waters superjacent to the seabed and of the seabed and its subsoil;
    2. b)The term «Mexico» means the United Mexican States; when used in a geographical sense it 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 subsoil 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, subsoil and the superjacent waters; and the air space of the national territory to the extent and conditions established by international law;
    3. c)The terms «a Contracting State» and «the other Contracting State» mean Portugal or Mexico, as the context requires;
    4. d)The term «person» includes an individual, a company and any other body of persons;
    5. e)The term «company» means any body corporate or any entity which is treated as a body corporate for tax purposes;
    6. f)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 Contacting State;
    7. g)The term «international traffic» means any transport by a ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
    8. h)The term «competent authority» means:
      1. i)In the case of Portugal, the Minister of Finance, the director general of Taxation (director-geral dos Impostos) or their authorised representatives;
      2. ii)In the case of Mexico, the Minister of Finance and Public Credit;
    9. i)The term «national» means:
      1. i)Any individual possessing the nationality of a Contracting State;
      2. ii)Any legal person, association or other entity deriving its status as such from the laws in force in a Contracting State.
  10. 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

  11. 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, place of incorporation or any other criterion of a similar nature, and also includes that State and any political or administrative 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.
  12. 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:
    1. a)He shall be deemed to be a resident 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 of the State which his personal and economic relations are closer (centre of vital interest);
    2. b)If the State in which he has his centre of vital interest 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 of the State in which he has an habitual abode;
    3. c)If he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;
    4. 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.
  13. 3 -Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.

    Article 5

    Permanent establishment

  14. 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.
  15. 2 -The term «permanent establishment» includes especially:
    1. a)A place of management;
    2. b)A branch;
    3. c)An office;
    4. d)A factory;
    5. e)A workshop; and
    6. f)A mine, an oil or gas well, a quarry or any other place of extraction of natural resources.
  16. 3 -A building site, a construction, assembly or installation project or supervisory activities in connection therewith constitutes a permanent establishment only if it lasts more than 9 months.
  17. 4 -Notwithstanding the preceding provisions of this article, the term «permanent establishment» shall be deemed not to include:
    1. a)The use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
    2. b)The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
    3. c)The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
    4. 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;
    5. e)The maintenance of a fixed place of business solely for the purpose of advertising, supplying information, scientific research or for preparation in relation to the placement of loans, or for similar activities which have a preparatory or auxiliary character for the enterprise as long as the enterprise doesn't receive any income from the carrying on of these activities;
    6. f)The maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs 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.
  18. 5 -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 exercise, 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.
  19. 6 -Notwithstanding the foregoing provisions or 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 that other State or insures risks situated therein through a person other than an agent of independent status to whom paragraph 7 applies.
  20. 7 -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.
  21. 8 -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

  22. 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.
  23. 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 of fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.
  24. 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.
  25. 4 -The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.
  26. 5 -The foregoing provisions shall also applly to income from movable property or from services connected with the use or the right to use immovable property, which, under the taxation law of the Contracting State in which the property in question is situated, is assimilated to income from immovable property.

    Article 7

    Business profits

  27. 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:
    1. a)That permanent establishment;
    2. 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 the subparagraph b) shall not be taxable in the other Contracting State if the enterprise demonstrates that such sales have no connection with the permanent establishment and have been carried out for reasons other than obtaining a benefit under this Convention.

  28. 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.
  29. 3 -In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes 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.
  30. 4 -Insofar as it as 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 of this article 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.
  31. 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.
  32. 6 -For the purpose 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 an sufficient reason to the contrary.
  33. 7 -Where profits include items of income which are dealt with separatly 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

  34. 1 -Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  35. 2 -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 ship is a resident.
  36. 3 -The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
  37. 4 -Whenever companies from different countries have agreed to carry on an air transportation business together in the form of a consortium, the provisions of paragraphs 1 and 3 shall apply to such part of the profits of the consortium as corresponds to the participation held in that consortium by a company that is a resident of a Contracting State.

    Article 9

    Associated enterprises

  38. 1 -Where:
    1. 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
    2. 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.

  39. 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, than that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits where that other State considers the adjustment justified. 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

  40. 1 -Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
  41. 2 -However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 10% of the gross amount of the dividends.

    This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

  42. 3 -The term «dividends» as used in this article means income from shares, «jouissance» shares or «jouissance» rights, mining shares, founder's shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights 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.
  43. 4 -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, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.
  44. 5 -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 or a fixed base 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

  45. 1 -Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  46. 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 10% of the gross amount of the interest.
  47. 3 -Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempted from tax in that State:
    1. a)If the debtor or the beneficiary of such interest is that State, a political or administrative subdivision, or a local authority thereof or the central bank; or
    2. b)The interest is paid in respect of a loan granted for a period of three years or more, or guaranteed, by a financial or credit institution of a public character with the objective to promote exportation or development by means of granting credits or guarantees under preferential conditions.
  48. 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 taxation law of the Contracting State in which the income arises.
  49. 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, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.
  50. 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 or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
  51. 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, having regard to the debt-claim for which it is paid, 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

  52. 1 -Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  53. 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 recipient is the beneficial owner of the royalties the tax so charged shall not exceed 10% of the gross amount of the royalties.
  54. 3 -The term «royalties» as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work (including cinematograph films, video recordings, and films or tapes for radio or television broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience. The term «royalties» also includes gains derived from the use of such right or property in the case of an alienation of such right or property to the extent that such gains are contingent on the productivity, use or disposition thereof.
  55. 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, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.
  56. 5 -Royalties shall be deemed to arise in a Contracting State where the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the obligation to pay the royalties was incurred, and such royalties are borne by that permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
  57. 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 paid, having regard to the use, right or information for which they are paid, 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

  58. 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.
  59. 2 -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 or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.
  60. 3 -Gains from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  61. 4 -In addition to gains taxable in accordance with the provisions of the preceding paragraphs of this article, gains derived by a resident of a Contracting State from the alienation of stock, participation, or other rights in the capital of a company or other legal person which is a resident of the other Contracting State may be taxed in that other Contracting State if the recipient of the gain, held during the period of twelve months preceding such alienation, at any time, a participation directly or indirectly, of at least 25% in the capital of that company or other legal person.
  62. 5 -Gains from the alienation of shares or other rights of a company which assets consist principally, directly or indirectly, of immovable property situated in a Contracting State or any other right pertaining to such immovable property, may be taxed in that State. For the purposes of this paragraph immovable property used by a company in its industrial, commercial or agricultural activities or in the conduct of professional services shall not be taken into account.
  63. 6 -Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident.

    Article 14

    Independent personal services

  64. 1 -Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State:
    1. a)Where the resident has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities but only so much of the income as is attributable to that fixed base; or
    2. b)Where the resident, being an individual, is present in the other Contracting State for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned; in that case only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.
  65. 2 -The term «professional services» includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

    Article 15

    Dependent personal services

  66. 1 -Subject to the provisions of articles 16, 18, 19, 20 and 21, 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.
  67. 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 State if:
    1. a)The recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned; and
    2. b)The remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
    3. c)The remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
  68. 3 -Notwithstanding the preceding provisions of this article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

    Article 16

    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, in the case of Portugal, in his capacity as a member of a «conselho fiscal» or as a «fiscal único» or, in the case of Mexico, in his capacity of «administrador» or «comisario», of a company which is a resident of the other Contracting State may be taxed in that other State.

    Article 17

    Artistes and sportspersons

  69. 1 -Notwithstanding the provisions of articles 14 and 15, 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. Income referred to in this paragraph shall include income derived from any personal activities performed in the other Contracting State by such resident relating to his reputation as an entertainer or sportsperson, where such activities have a direct link with his personal activities as an artist or a sportsperson.
  70. 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, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised.
  71. 3 -Notwithstanding other provisions of the Convention, income derived by a resident of a Contracting State from the performance of independent personal services, the direct use, letting or use in any other form of goods, connected to the personal activities exercised by an entertainer or a sportsperson in his capacity as such shall be considered as income derived by the entertainer or sportsperson for the purposes of this article, unless the entertainer or sportsperson demonstrates that he nor person related thereto participates directly or indirectly in the income of that resident in any manner, including the receipt of deferred remuneration, bonnuses, fees, dividends or other distributions.
  72. 4 -Paragraphs 1 and 2 shall not apply to income derived by a resident of a Contracting State from activities exercised in the other Contracting State if the visit to that other State is supported wholly or mainly by public funds of the first-mentioned State, a political or administrative subdivision or a local authority thereof, or takes place under a cultural agreement or arrangement between the Governments of the Contracting States. In such a case, the income shall be taxable only in the Contracting State of which the entertainer or sportsperson is a resident.

    Article 18

    Pensions

  73. 1 -Subject to the provisions of paragraph 2 of article 19, pensions, annuities and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
  74. 2 -The term «annuity» means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under a commitment with an obligation to make the payments in return for adequate and full consideration in money or money's worth.

    Article 19

    Government service

  75. 1 -a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State, a political or administrative 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.
    1. 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:
      1. i)Is a national of that State; or
      2. ii)Did not become a resident of that State solely for the purpose of rendering the services.
  76. 2 -a) Any pension paid by, or out of funds created by, a Contracting State or a political or administrative 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.
    1. b)However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
  77. 3 -The provisions of articles 15, 16, 17 and 18 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect of services rendered in connection with a business carried on by a Contracting State or a political or administrative subdivision or a local authority thereof.

    Article 20

    Teachers and researchers

  78. 1 -An individual who is a resident of a Contracting State immediately before visiting the other Contracting State and who, at the invitation of the Government of the other Contracting State or of a university or other accredited educational institution or recognized scientific research institution of that other Contracting State, or under an official program of cultural exchange, visits that other State solely for the purpose of teaching or carrying out research at such a university or educational institution shall be exempt from tax in the other Contracting State on his remuneration from such activity for a period not exceeding two years from the date of his arrival in the other State.
  79. 2 -This article shall not apply to income from research if such research is undertaken not in the public interest but primarily for the private benefit of a specific person or persons.

    Article 21

    Students and trainees

    Payments which a student or trainee 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 22

    Other income

  80. 1 -Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing articles of this Convention shall be taxable only in that State.
  81. 2 -The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.
  82. 3 -Notwithstanding the provisions of paragraphs 1 and 2, 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 23

    Elimination of double taxation

  83. 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:
    1. a)The Portuguese tax paid on income arising in Portugal, in an amount not exceeding the tax payable in Mexico on such income; and
    2. b)In the case of a company owning at least 10% of the capital of a company which is a resident of Portugal and from which the first-mentioned company receives dividends, the Portuguese tax paid by the distributing company with respect to the profits out of which the dividends are paid.
  84. 2 -In the case of Portugal, double taxation shall be avoided as follows:
    1. a)Where a resident of Portugal derives income which, in accordance with the provisions of this Convention, may be taxed in Mexico, Portugal shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in Mexico.

      Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Portugal;

    2. b)Where in accordance with any provisions of the Convention income derived by a resident of Portugal is exempt from tax in this State, Portugal may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income;
    3. c)In the case of a Portuguese company that receives dividends from a Mexican company subject to tax and not exempt the capital of which it holds directly a participation of at least 25%, Portugal shall allow a deduction for 95% of such dividends included in the tax base, provided that such participation was held for the preceding two years, or from the date of the organization of the Portuguese company if that occurred later, but in either case only if the participation was held continuously throughout that period.

      Article 24

      Non-discrimination

  85. 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.
  86. 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.
  87. 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.
  88. 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.
  89. 5 -The provisions of this article shall, notwithstanding the provisions of article 2, apply to taxes of every kind and description.

    Article 25

    Mutual agreement procedure

  90. 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 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.
  91. 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.
  92. 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.
  93. 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.
  94. 5 -Notwithstanding any other treaty, agreement or convention to which the Contracting States are parties, any tax issue between the Contracting States, including a dispute over whether this Convention applies, shall be settled only under this article unless the competent authorities agree otherwise.

    Article 26

    Exchange of information

  95. 1 -The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by article 1. Any information received 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) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. 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.
  96. 2 -In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
    1. a)To carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
    2. b)To 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;
    3. c)To 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).

      Article 27

      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 28

      Entry into force

  97. 1 -The Contracting States shall notify each other in writing, through diplomatic channels that the procedures required by its law for the entry into force of this Convention have been satisfied. The Convention shall enter into force on the date of receipt of the last notification.
  98. 2 -The Convention shall enter into force on the date of the latter of the notifications referred to in paragraph 1 and its provisions shall apply:
    1. a)In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January in the year next following the year in which this Convention enters into force;
    2. b)In respect of other taxes, as to income arising in the fiscal year beginning on or after the first day of January in the year next following the year in which this Convention enters into force.

      Article 29

      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 six months before the end of any calendar year beginning after the expiration of a period of five years from the date of its entry into force. In such event the Convention shall cease to have effect:

    3. a)In respect of taxes withheld at the source, the fact giving rise to them appearing on or after the first day of January next following the date on which the period specified in the said notice of termination expires;
    4. b)In respect of other taxes as to income arising in the fiscal year beginning on or after the first day of January next following the date on which the period specified in the said notice of termination expires.

      In witness whereof the undersigned, duly authorized thereto, have signed this Convention.

      Done at Ciudad de México, on 11th November 1999, in duplicate in the Portuguese, Spanish and English languages, all texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.

      For the Portuguese Republic:

      (ver documento original)

      For the United Mexican States:

      (ver documento original)

      PROTOCOL

      Ad article 2

    5. a)It is understood that in the case of Mexico, the provisions of article 2 shall not apply to taxes on income imposed by its political subdivisions or local authorities.
    6. b)If Mexico introduces taxes on income imposed by its political subdivisions or local authorities, Mexico shall notify the competent authorities of Portugal in a timely manner and Portugal may request consultations with a view to restoring the balance of the benefits of the Convention, if necessary.

      Ad article 4

      It is understood that notwithstanding the provisions of this Convention, tax reductions or exemptions under articles 8, 11, 12 and 13 of this Convention shall not apply to any person that is a resident of a Contracting State that is entitled to income tax benefits on foreign source income under the law of that Contracting State. However, such person may be subject to tax in the other Contracting State at a rate that shall not exceed 30% of the gross amount of the royalties, interest or capital gains, provided that such person is the beneficial owner of such royalties, interests or capital gains, and is a company which is a resident of the first mentioned Contracting State, the capital of which is held, directly or indirectly, for more than 70% by shareholders residents of the first mentioned Contracting State and that no more than 20% of the company's gross income consists of passive income, including dividends, interests, royalties or capital gains.

      Ad article 7

      In respect of paragraph 3, it is understood that no such deductions shall be allowed in respect of such amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head-office of the enterprise or any of its other offices by way of royalties, fees or other similar payments in return for the use of patents or other rights, by way of commission, for specific services performed or for management, or except in the case of a bank, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head-office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, by way of commission, for specific services performed or for management, or except in the case of a bank, by way of interest on moneys lent to the head-office of the enterprise or any of its other offices.

      Ad article 8

      For the purposes of this article profits from the operation of ships or aircraft in international traffic include profits derived 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 rental profits are accessory to profits described in paragraph 1.

      Ad article 10

      Although the substitute gift and inheritance tax (imposto sobre sucessões e doações por avença) imposed by Portugal is in fact a gift and inheritance tax and not an income tax, it is agreed that if the rate of such tax is increased above the rate applicable on the date of signature of this Convention, such increase shall not apply to dividends beneficially owned by residents of Mexico. It is understood that shares that have been subject to the substitute gift and inheritance tax are not subject to taxes imposed by Portugal upon transfer by death or gift.

      Ad article 10, paragraph 3

      The term «dividens» also includes profits attributed under an arrangement for participation in profits (associação em participação/associación en participación).

      Ad article 11, paragraph 6

      For the purposes of the provisions in the second part of paragraph 6 of article 11, if the loan is incurred by the head-office of the enterprise and the amount in question affects several permanent establishments or fixed bases situated in different countries, then the interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated, but only so much of the interest payment as is borne by such permanent establishment or fixed base.

      Ad articles 11 and 12

      The provisions of paragraphs 2 and 3 of article 11 and of paragraph 2 of article 12 shall not apply if the debt-claim in respect of which the interest is paid was agreed upon or the contract in respect of which the payment of royalties is made was entered into primarily with the objective to take advantage of these provisions and not for valid economic reasons. Where a Contracting State resolves to deny the benefit of said provisions to a resident of the other Contracting State, the competent authority of the first-mentioned State should reach an agreement with the competent authority of the other State.

      Ad article 12, paragraph 3

      For the purposes of this paragraph, the term «royalties» shall also include the reception or the right to receive, as well as the use or the right to the use in connection with television or broadcasting, visual images, sounds, or both, transmitted to the public either by satellite, cable, optic fibre or similar technology.

      Ad article 12, paragraph 5

      For the purposes of the provisions in the second part of paragraph 5 of article 12, where the obligation to pay the royalties is incurred by the head-office of the enterprise and the right or property in respect of which they are paid is effectively connected with several permanent establishments or fixed bases situated in different countries, then the royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated, but only so much of the royalty payment as is borne by such permanent establishment or fixed base.

      Ad article 17

      It is understood that paragraph 3 of article 17 is meant to apply to cases where an artist or sportsperson resident of a Contracting State derives income from his personal activities indirectly, through another person, under other categories of income. This income shall fall under the scope of this article, since it is closely connected with his personal activities as such in the other Contracting State.

      Ad article 23, paragraph 2, subparagraph c)

      Notwithstanding this provision, if in the future Portugal changes its internal law and adopts a different method for the elimination of economical double taxation, this new method will be applied for the purposes of this Convention.

      Ad article 24

      It is understood that the provisions of paragraph 3 shall not be interpreted so as to prevent the application by a Contracting State of the thin capitalization provisions provided for in its domestic law, except in those cases in which the associated enterprises can prove that due to the special characteristics of their activities or their specific economic circumstances, the conditions made or imposed between these enterprises are in conformity with the arm's length principle.

      Ad article 26

      It is understood that the competent authorities may use the information exchanged under article 26 for the assessment of income taxes for value added tax purposes.

      In witness whereof, the undersigned duly authorised thereto have signed this Protocol.

      Done at Ciudad de México, on 11 th November 1999, in duplicate in the portuguese, spanish and english languages, all texts being equally authentic. In case of any divergence of interpretation, the english text shall prevail.

      For the Portuguese Republic:

      (ver documento original)

      For the United Mexican States:

      (ver documento original)

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