Effective 1 January 2022, pursuant to the recently amended Federal Tax Code, legal entities, trusts and any legal vehicle or figure incorporated under the laws of Mexico ("Mexican Entities/Vehicles") and registered before the Tax Administration Service (SAT) must maintain as part of their tax accounting registries information regarding their beneficial owners. This information must be shared with the SAT upon request jointly with the corresponding procedure implemented in the legal entity to make the corresponding updates. Failure to comply with this information may result in fines of up to two million pesos per beneficial owner.
In the case of trusts, information should be requested to the settlor, trustee and beneficiaries.
In more detail
Who qualifies as a beneficial owner?
Mexican Entities/Vehicles must identify the beneficial owner of the Mexican Entities/Vehicle as of 1 January 2022. Whether or not a person qualifies as a beneficial owner should be determined according to the definition established under Article 32-B Quarter of the Federal Tax Code. The term beneficial owner (BO) is defined as an individual or group of individuals, who:
- Benefits (directly or indirectly) from the activities carried out by any Mexican Entities/Vehicles
- Directly or indirectly, has and executes the rights of use or enjoyment of a good or service
- In whose name a transaction is performed
- Has control of the Mexican Entities/Vehicles
- The term control is defined as the power that an individual or group of individuals may have to: (i) Take decisions in shareholder meetings; (ii) Appoint the members of the board or the unique administrator; (iii) Own more than 15% of shares with voting rights; or (iv) Manage and design the strategy of the any Mexican Entities/Vehicles
The definition is very broad and may be subject to confusion. That is why the interpretation of Article 32-B Quarter should be made in line with other international provisions regarding beneficial owner -i.e. GAFI recommendations and OECD guidelines.
What information should be obtained from the BO?
According to the Tax Administrative Guidelines, the following information should be obtained from each BO:
- Full name and copy of ID
- Alias of the individual / group of individuals
- Date of birth or date of death, when applicable
- Country of origin and nationality. In case of having more than one, identify all of them
- CURP (i.e., peoples' unique registry code) or its equivalent, in the case of other countries or jurisdictions
- Country or jurisdiction of residence for tax purposes
- Type and number or code of official identification
- RFC number or tax identification number, or its equivalent, in case of being a resident abroad for tax purposes
- Marital status, with identification of the spouse and patrimonial regime, or identification of the concubine or concubinary, if applicable
- Contact information: e-mail and telephone numbers
- Home address and tax domicile
- Relationship with or classification vis-à-vis any Mexican Entities / Vehicles the case may be
- Degree of participation in any Mexican Entities / Vehicles which allows the exercise of rights of use, enjoyment, exploitation or disposition of a good or service or to carry out a transaction
- Description of the form of participation or control (direct or indirect)
- Number of shares, partnership interest, participations or rights or equivalents; series, class and nominal value of the same, in the capital of any Mexican Entities / Vehicles
- Place where the shares, partnership interest, participations or other equivalent rights are deposited or in custody
- Date determined from which the individual acquired the condition of controlling beneficiary of any Mexican Entities / Vehicles
- Date on which there has been a modification in the participation or control any Mexican Entities / Vehicles
- Type of modification of the participation or control in any Mexican Entities / Vehicles
- Data of termination of the participation or control in any Mexican Entities / Vehicles
This information should be provided upon request to the SAT.