Effective January 1, 2022pursuant to the recently amended Federal Tax Code, legal persons, trusts and any vehicle or legal figure incorporated under the laws of Mexico (“Mexican entities/vehicles“) and registered with the Tax Administration Service (SAT) must maintain as part of their tax accounting records information about their beneficial owners. This information must be shared with the SAT upon request together 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 from the settlor, trustee and beneficiaries.
Who qualifies as beneficial owner?
Mexican entities/vehicles must identify the beneficial owner of Mexican entities/vehicles as of January 1, 2022. Whether or not a person qualifies as a beneficial owner shall be determined in accordance with the definition established under the article 32-B quater of the Federal Tax Code. . The term beneficial owner (BO) is defined as an individual or a group of individuals, who:
- Benefits (directly or indirectly) from activities carried out by Mexican entities/vehicles
- Directly or indirectly owns and executes the rights to use or enjoy a good or service
- On whose behalf a transaction is carried out
- Has control of Mexican entities/vehicles
- The term control is defined as the power that an individual or group of individuals may have to: (i) make decisions at shareholders’ meetings; (ii) Appoint the members of the board of directors or the sole director; (iii) Hold more than 15% of the voting shares; or (iv) Manage and design the strategy of any Mexican Entity/Vehicle
The definition is very broad and can be confusing. Therefore, the interpretation of Article 32-B Quarter must be in line with other international provisions regarding beneficial ownership, i.e. the FATF Recommendations and the OECD Guidelines.
What information should be obtained from the BO?
According to tax administrative guidelines, the following information must be obtained from each BO:
- Full name and copy of ID
- Aliases of individual / group of individuals
- Date of birth or date of death, if applicable
- Country of origin and nationality. If you have more than one, identify them all
- CURP (i.e., Unique Persons Registry Code) or its equivalent, in the case of other countries or jurisdictions
- Country or jurisdiction of tax residence
- Type and number or official identification code
- RFC number or tax identification number, or its equivalent, in case of tax residence abroad
- Marital status, with identification of the spouse and property regime, or identification of the cohabiting partner or partner, if applicable
- Contact details: e-mail and telephone numbers
- Domicile and tax domicile
- Relationship to or classification to any Mexican entity/vehicle, if applicable
- Degree of ownership in any Mexican entity/vehicle that enables the exercise of rights to use, enjoy, operate, or dispose of a good or service or to perform a transaction
- Description of the form of participation or control (direct or indirect)
- Number of shares, shares, participations or rights or equivalents; series, class and nominal value of the same, in the capital of any Mexican entity / vehicle
- Place where the shares, shares, participations or other equivalent rights are deposited or on deposit
- Specified date from which the person acquired the condition of beneficiary controlling any Mexican entity/vehicle
- Date on which there was a change in ownership or control of any Mexican Entity/Vehicle
- Type of change in ownership or control in any Mexican entity/vehicle
- Termination data of participation or control in all Mexican entities / vehicles
This information must be provided upon request to the SAT.