15 Jul Notice on the sale of shares between foreign residents
As of this year, Mexican companies with foreign partners or shareholders without a permanent establishment in Mexican territory involved in the sale of their shares or equity interests must file a notice before the Tax Authority ("SAT"). Such obligation is the result of the amendment to Article 76 of the Income Tax Law (“LISR”) and Rule 3.9.18 of the General Tax Rules (“RMF”).
The reason for this new obligation is that, since the transactions were performed abroad, between foreign residents, without a permanent establishment in Mexico, the Tax Authority did not have a mechanism to identify such operations; therefore, to provide more certainty regarding the payment of taxes and to strengthen the corporate governance of the Mexican issuer of shares, the authorities decided to impose this obligation.
This is important because with the sale of the shares, the seller must pay the corresponding Income tax (in accordance with the procedure set forth in Art. 161 LISR), within 15 days following the reception of the income.
The Mexican company must file the notice within 30 calendar days following the date in which the transaction was carried out. The notice must include the following information:
1. Company Name, Tax ID, and country of residence of foreign residents without a permanent establishment in Mexico of the sellers(s) and buyers(s).
2. Date of transaction.
3. Date in which the income tax was paid.
4. Amount of the paid Tax.
5. Document evidencing the authority of the Legal Representative of the company that is filing the notice.
6. Official ID of such Legal Representative.
Regarding companies issuing shares in the stock market, on March 9, 2022, Rule 3.9.18. of the RMF and form 157/ISR, set forth that such Mexican public issuers must file a report based on article 49 bis 2 of the " General Provisions applicable to Securities Issuer " of the National Banking and Securities Commission ("CNBV") the month following the change of participation of a relevant shareholder (those shareholders with more than 5% of the shareholding), or on June 30 of each year.
This report must include the following information: name or corporate name; number, series and class of the shares owned by them, as well as the amount and percentage they represent with respect to their capital stock. This information refers to:
I. Directors and relevant executives of the issuer holding more than 1% of the issuer's capital stock.
II. Individuals or legal entities, trusts or other investment vehicles owning 5% or more of the issuer's capital stock, whether they are owners or beneficiaries.
III. The 10 shareholders, individuals, or legal entities, with the largest direct shareholding, even if such shareholding does not represent 5% of the issuer's capital stock individually.
If you have any questions or comments, or if you would like our firm to review the particular implications for your company and the application of the notice, please do not hesitate to contact us.
Contact
Rafael Sánchez Acosta
Franscela Sapien Olea