Mexico: New obligations for information about “controlling beneficiaries,” part of 2022 tax reforms
Modifications made to federal tax code
New obligations part of 2022 tax reforms
As part of the tax reforms of 2022, various modifications were made to the federal tax code to introduce new obligations regarding the information that must be kept and delivered to the authority with regard to “controlling beneficiaries” (in some situations, referred to as ultimate beneficial owners).
In accordance with these reforms, legal entities, trustees, settlors or trustees (as well as contracting parties of any legal entity) are required to maintain as part of their accounting records, information about their controlling beneficiaries.
Definition of controlling beneficiary
A “controlling beneficiary” is defined as a natural person (individual) or group of individuals who directly or indirectly obtain a benefit derived from a legal entity, trust or any other legal entity of that exercise control over these entities—for example, when through ownership of securities or contracts, they can:
- Impose decisions at the shareholders' meeting
- Exercise a vote of more than 15% of the capital
- Decide directly or indirectly on the administration of the company or legal entity
Reason for new measures
The rationale for these new measures is based on commitments that Mexico made in signing various international agreements or treaties related to the automatic exchange of information. These agreements generally establish an obligation for information to be maintained as part of the taxpayers' accounting records. In instances of non-compliance, penalties can apply.
The information about controlling beneficiaries must be provided to the tax authorities, and may be shared with foreign authorities pursuant to an international treaty for the exchange of information. In the event that the Mexican authority requests this information from a taxpayer, the documents must be delivered to the authorities within 15 days following the date of notification.
In addition, notaries, brokers, and any person who intervenes in the formation or execution of contracts or legal acts that result in the creation of legal entities must obtain information that allows for the identification of the controlling beneficiaries. Likewise, financial system entities must identify the beneficiaries of the accounts they manage.
When the controlling beneficiary is not a result of direct ownership but by control, the chain of control must be identified. In the event that a beneficiary cannot be identified, the sole administrator of the company or, as the case may be, each member of the board of directors will be considered as such.
Those required to maintain this data will require detailed personal information from the controlling beneficiary of the participation and, when appropriate, of the chain of ownership and control. If there are changes to the documentation, the information must be updated within 15 calendar days following the change
Penalties for non-compliance will apply.
Read a June 2022 report prepared by the KPMG member firm in Mexico
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