Canada – Mexico Tax Treaty
The Canada-Mexico tax treaty caps withholding on dividends at 15% for portfolio investors and 5% for qualifying direct investment, and interest at 10%. Royalty rates vary by category, from 0% on copyright to 10% on film and television. Pension distributions are subject to 15% withholding at source. This is one of 51 active treaties in Canada's network and one of 24 in Mexico's. The general dividend rate of 15% compares to a median of 15% across Canada's network and 15% across Mexico's.
Verified data
CRA Part XIII Withholding Tax Rates (canada.ca) (Verified April 2026)
Withholding Rate Summary
Source: Canada Treaty Reference| Income Type | Treaty Rate | Statutory Rate (Canada) |
|---|---|---|
| Dividends (general) Portfolio investors | 15%saves 10% | 25% |
| Dividends (qualified) Beneficial owner is a company holding >= 10% of voting stock | 5%saves 20% | 25% |
| Interest Bank interest, bonds, loans | 10%saves 15% | 25% |
| Royalties (avg) Patents, copyright, know-how, film/TV | 2.5% | — |
| Pensions Private pension distributions | 15% | — |
| Social Security Government social security benefits | 0% | — |
“Treaty Rate” is the maximum withholding permitted under this treaty. The actual effective rate may be lower if domestic law provides a more favorable rate independently. “Statutory Rate (Canada)” shows the rate that applies when no treaty benefit is claimed. Qualified dividend rate requires: Beneficial owner is a company holding >= 10% of voting stock.
Dividends
The general dividend rate of 15% applies to portfolio investors. A reduced rate of 5% is available when beneficial owner is a company holding >= 10% of voting stock. Without the treaty, the statutory withholding rate on dividends is 25%.
Source: Canada Treaty Reference
Interest
Interest payments (bank interest, bonds, loans) are subject to 10% withholding under this treaty, compared to the 25% statutory rate. This represents a 15% reduction from the statutory rate.
Source: Canada Treaty Reference
Royalties
Royalty withholding rates vary by the type of intellectual property. This treaty distinguishes 4 categories, with rates ranging from 0% to 10%.
Source: Canada Treaty Reference
Pensions & Social Security
Private pension distributions are subject to 15% withholding at source under this treaty. Government social security benefits are exempt from source-country withholding.
Source: Canada Treaty Reference
Comparative Context
🇨🇦Canada's Network
Among Canada's 51 active treaty partners, the 15% general dividend rate ranks 30th (median: 15%).
| Partner | Rate |
|---|---|
| Japan | 15% |
| South Korea | 15% |
| Luxembourg | 15% |
| Mexico (this treaty) | 15% |
| Malaysia | 15% |
| Nigeria | 15% |
| Netherlands | 15% |
🇲🇽Mexico's Network
Among Mexico's 24 active treaty partners, the 15% general dividend rate ranks 11th (median: 15%).
| Partner | Rate |
|---|---|
| United States | 10% |
| Australia | 15% |
| Brazil | 15% |
| Canada (this treaty) | 15% |
| Switzerland | 15% |
| Germany | 15% |
| Spain | 15% |