Energy Reform - Chapter VI: Implications On International Tax Matters

1. Permanent Establishment

1.1. Subjects and activities that generate a PE

Article 64 of the LISH provides that a PE is created whenever ever a resident abroad for tax purposes carries on with activities under the LH in Mexican territory or the exclusive economic zone over which Mexico has jurisdiction.

Let us be reminded that pursuant to the provisions set forth in Article 27 of the CPEUM, the exclusive economic zone is that which spans to 200 nautical miles, from the base line from which territorial sea is measured.

We consider that the wording used in Article 64 of the LISH is extremely ambiguous, which in practice may lead to generate several interpretation conflicts.