07 / 05 / 23

Delegation of tax audit and assessment powers regarding the Controlling Beneficiary

MEXICO CITY, MEXICO, July 5th, 2023 – As of January 1st, 2022, legal entities, fiduciaries, trustors, or trustees, contracting or integrating parties of any other legal vehicle or legal form, notary publics, among others (hereinafter, “obligated parties”), shall identify the individual or group of individuals that meet the status of “Controlling Beneficiary”, and inform the Mexican Tax Administration Service (Servicio de ‘Administración’ Tributaria or “Tax Authority”) of its existence.

In this regard, Articles 32-B Ter and 32-B Quinquies of the Federal Tax Code, in connection with Rule of the Miscellaneous Tax Resolution for 2023, establish that obligated parties must obtain, integrate, and keep as part of their accounting, the reliable, complete, and updated information of the Controlling Beneficiary. Additionally, the Tax Authority may request the obligated parties to provide said information.

Regarding the foregoing, on May 4th, 2023, a Resolution was published in the Federal Official Gazette (Diario Oficial de la Federación), by means of which the Tax Authority delegated powers to the Federal Tax Audit General Administration (Administración General de Auditoría Fiscal de la Federación) and the Large Taxpayers General Administration (Administración General de Grandes Contribuyentes), in order to: (i) perform tax audits; and, (ii) request the reports, data or documents, in order to verify their compliance with Articles 32-B, section V, 32-B Bis, 32-B Ter, 32-B Quater and 32-B Quinquies of the Federal Tax Code.

In other words, based on the published Resolution, both the Federal Tax Audit General Administration, as well as the Large Taxpayers General Administration may exercise their tax audit and tax assessment powers regarding the compliance with tax obligations “Controlling Beneficiary” matters, that we consider will begin in the upcoming months.

Therefore, we suggest that all obligated parties verify the due compliance of the legal provisions regulating the “Controlling Beneficiary”, to prevent any tax and/or economic contingency.

Do not hesitate to contact us should you require advice from SMPS Legal.

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