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First Majestic initiates arbitration over Mexico tax dispute

14th May 2020

By: Creamer Media Reporter

     

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TSX-listed First Majestic Silver said on Wednesday that it had served notice to Mexico of its intention to initiate arbitration proceedings under the North American Free Trade Agreement over a tax dispute.

The company, which owns three silver mines in Mexico, said that it had unsuccessfully sought to resolve the taxation issue through local bodies.

First Majestic alleges that the Mexican tax authority, the Servicio de Administracion Tributaria (SAT), has by its various actions exhibited a “total disregard for the applicable provisions of three separate double taxation treaties that it has entered into with Canada, Barbados and Luxembourg”.

“SAT has repeatedly and unilaterally chosen to reject requests for dispute resolution procedures, known as mutual agreement procedures, contained within those three treaties designed for addressing differences in interpretation and application of those treaties,” the company said.

The notice initiates a 90-day process for the government of Mexico to enter into “good faith and amicable negotiations” with the company, First Majestic said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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