12 Jul Granting of powers of authority to officials of the Tax Authority to verify compliance with the Beneficial Controllers identification.
As result of the 2022 Tax Reform, Companies and Notaries Public are required to comply with new information obligations set for in the Federal Tax Code (Articles 32 B Ter, 32 B Quater and 32-B Quinquies) and the General Tax Regulations (Rules 2.8.1.20., 2.8.1.21., 2.8.1.22. and 2.8.1. 23.) in connection with the identification of the Controlling Beneficiary, and the collection of certain documents of such Beneficiary. The Controlling Beneficiary may be a national or foreign individual, and the above-mentioned regulations provide documents and criteria for his/her identification.
As of May 2023, the General Tax Administration of the Tax Authority is now empowered to conduct inspection visits and require reports, data, or documents to verify compliance with the identification, obligations to have and keep updated information of the Controlling Beneficiaries, as well as, to require reports, any data or documents referred to in the Tax Regulations. This measure means that the tax authority will make greater efforts to verify due compliance with the taxpayer´s obligations regarding the Controlling Beneficiary.
It is important to mention that the information of the Controlling Beneficiary is part of the accounting records of the company, and failing to keep such documentation available or updated when required may trigger fines ranging from MXN$500,000.00 to MXN$2'000,000.00 million pesos per controlling beneficiary.
Also, considering the implementation of the Master Plan for Taxation and Collection 2023, it is expected that the tax authority may initiate these types of audits to achieve higher tax collection through the imposition of the penalties referred to above.
Consequently, within this context and background, we urgently recommend our clients to have a tax and corporate compliance program in place allowing companies, trusts, or any other legal entity to comply with the Controlling Beneficiary obligations to mitigate risks in the audits that the Tax Authority may perform to taxpayers.
If you have any questions or comments, or if you would like our Firm to review the particular implications for your company and the existence of legal actions, please do not hesitate to contact us.
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Rafel Sánchez Acosta
THE ABOVE IS PROVIDED AS GENERAL INFORMATION PREPARED BY PROFESSIONALS WITH REGARD TO THE SUBJECT MATTER. THIS DOCUMENT ONLY REFERS TO THE APPLICABLE LAW IN MEXICO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE ACCURACY, NO RESPONSIBILITY CAN BE ACCEPTED FOR ERRORS OR OMISSIONS. THE INFORMATION CONTAINED HEREIN SHOULD NOT BE RELIED ON AS LEGAL, ACCOUNTING OR PROFESSIONAL ADVICE BEING RENDERED