As of Fiscal Year 2022, the Mexican Federal Tax Code established a new obligation for corporate taxpayers in Mexico to identify and collect personal information on their beneficial owners. This documentation will form part of the taxpayer’s accounting books in question and must be shared with the local Tax Authorities when requested.
Who are subject to this new provision?
How to identify the beneficial owner?
A beneficial owner shall be understood as the individual or group of individuals who:
a) Directly or indirectly obtains benefits derived from its participation in a legal entity, a trust, or any other legal entity;
b) Ultimately exercises rights of enjoyment, use or disposition of an asset or service or on whose behalf a transaction is carried out; or
c) Directly, indirectly or contingently exercises control over a legal entity, trust, or any other legal figure.
Moreover, if it is not possible to identify the beneficial owner through the new provisions, per Tax Rule 188.8.131.52, such role will be assigned to the administrator of the company in question, or if applicable, to each board member director operating it.
How and when should the information be provided?
This new information must only be sent to the local Tax Authorities upon request via the tax mailbox, having a maximum of 15 business days to answer, with the facility of an extension of 10 additional business days. However, the information must always be kept and updated in the company’s accounting books, even when said authorities have not requested it.
What information should be collected?
By the list within Tax Rule 184.108.40.206, taxpayers subject to the obligation must collect information of each of their identified beneficial owners, including but not limited to the following:
What happens if the beneficial owner is another company?
Barring a case-by-case analysis, in the event that the beneficial ownership is indirect, it should also be considered that Tax Rule 220.127.116.11 includes within the information to collect that of any of the undertakings that form the chain of ownership or control, including:
Is there a penalty for omitting this obligation?
Per articles 84-M and 84-N of the Mexican Federal Tax Code, due to non-compliance with these new obligations, the taxpayer may be subject to penalties for each omitted beneficial owner, as follows:
Given the understanding that these provisions represent a new obligation for businesses looking to set up companies in Mexico, the identification of beneficial owners must be studied on a case-by-case basis. Therefore, do not hesitate to contact us at JA Del Río, where we will be pleased to evaluate your particular case and advise you on the steps to follow to comply with this new obligation fully.
If you require additional information in this regard, contact us, and we will gladly support you.