As of January 1, 2022, a new obligation comes into force in the Federal Tax Code and the Miscellaneous rules, through which legal entities (companies), trusts (fiduciaries, settlors or trustees), must obtain, conserve, verify and keep updated as part of the accounting, the information of its controlling beneficiaries. Said information must be available in case the tax authorities require it.

This reform derives from the work of the Financial Action Task Force (FATF) and the Global Forum on Transfer and Exchange of Information for Tax Purposes organized by the Organization for Economic Cooperation and Development, in accordance with the International Standards of which Mexico is a member.

¿What is a controlling beneficiary?

In accordance with the provisions of article 32-B Quater of the Federal Tax Code, the controlling beneficiary shall be understood as the natural person who:

1. I. Directly or through another or others, obtains the benefit derived from its participation in a entity, a trust or any other legal figure, or legal act, or is the person or people who ultimately exercises the rights of use, enjoyment, or disposal of a good or service or in whose name a transaction is carried out, even when it is done on a contingent basis.
3. II. Directly, indirectly, or contingently, exercise control of the legal entity, trust or any other legal entity.
5. III. It is understood that an individual or group of individuals exercises control, when through the ownership of the securities, they can:

• Directly or indirectly impose decisions at general meetings of shareholders, partners, or equivalents
• Have ownership of the rights that allow directly or indirectly to exercise the vote with respect to more than 15% of the capital stock or else.
• Direct, or indirectly, the administration, strategy or main policies of the legal entity, trust or any other legal figure.

The Tax Administration Service (SAT) may issue general rules applicable to this provision.

Deadlines for updating and providing information related to the controlling beneficiary.

Information requested by the Tax Administration Service (SAT)

15 business days following the date of notification of the request. The term may be extended for an additional 10 days, through an extension request.

Additionally, this information may be provided to foreign tax authorities, upon request and under the protection of an international treaty in force to which Mexico is a party, which contains provisions for the reciprocal exchange of information.

Updating of files.

When there are changes in the identity or participation of the controlling beneficiaries, there will be a period of 15 calendar days from the date of the modification to update the information.

Criteria for determining the status of controlling beneficiary of legal entities.

Legal entities must identify, verify and validate the following information:

• The percentages of participation in the capital of the legal entity, including information regarding the chain of ownership, in cases where the controlling beneficiary is directly. Chain of ownership is understood as the assumption in which the property is owned indirectly, through other legal entities.
• Information on the chain of control in cases where the controlling beneficiary is controlled by means other than ownership. Chain of control is understood as the assumption in which control is held indirectly, through other legal entities, trusts, or any other legal figure.

In cases where the individual is not identified, the controlling beneficiary will be the individual who occupies the position of sole administrator of the legal entity or equivalent. If the legal person has a board of directors, each member of said council will be considered as the controlling beneficiary of the legal entity.

Based on the above, it can be concluded that the controlling beneficiary will always be an individual.

Mechanisms to identify, obtain and keep updated information on the controlling beneficiary.

Through rule 2.8.1.21 of the Miscellaneous Tax Resolution for 2022, the mechanisms for the control of updated information on the controlling beneficiary are established, which will be part of the accounting. These are mentioned below:

I.- Identify the controlling beneficiary and integrate its file.

II.- Obtain and maintain updated and complete information available through procedures that allow controlling beneficiaries to report any change in their condition and provide such updated information.

III.- Preserve the information of the controlling beneficiary, the chain of ownership and the chain of control, the documentation that supports it, as well as the supporting documentation of the internal control procedures established in article 30 of the CFF.

IV.- Allow tax authorities access to information, records, data, and documents related to controlling beneficiaries.

List of information for the integration of the file of the Controlling Beneficiaries.

1. Full names and surnames, which must correspond to the official document with which the identity has been accredited.
2. Alias.
3. Date of birth. When applicable, date of death.
4. Sex.
5. Country of origin and nationality. If you have more than one, identify them all.
6. CURP or its equivalent, in the case of other countries or jurisdictions.
7. Country or jurisdiction of residence for tax purposes.
8. Type and number or key of the official identification.
9. Key in the RFC or tax identification number, or its equivalent, if you are a resident abroad, for tax purposes.
10. Marital status, with identification of the spouse and property regime, or identification of the concubine or concubine, if applicable.
11. Contact information: email and telephone numbers.
12. Private address and fiscal address.
13. Relationship with the legal entity or quality that holds in the trust or the figure
14. legal, as appropriate.
15. Degree of participation in the legal entity or in the trust or legal figure, which allows it to exercise the rights of use, enjoyment, enjoyment, use or disposal of a good or service or carry out a transaction.
16. Description of the form of participation or control (direct or indirect).
17. Number of shares, partnership interests, participations or rights or equivalents.
18. series, class, and nominal value of the same, in the capital of the legal entity.
19. Place where the shares, partnership interests, participations or other equivalent rights are deposited or in custody.
20. Specific date from which the natural person acquired the status of controlling beneficiary of the legal person, trust, or any other legal figure.
21. If applicable, provide the data mentioned in the preceding sections regarding who or who hold the position of sole administrator of the legal entity or equivalent. If the legal entity has a board of directors or equivalent body, of each member of said board.
22. Date on which a change occurred in the participation or control in the legal entity, trust, or any other legal figure.
23. Type of modification of the participation or control in the legal entity, trust, or any other legal figure.
24. Date of termination of the participation or control in the legal entity, trust, or any other legal figure.

In the cases of chain of ownership or chain of control, you must also have the following information:

• Name, denomination or trade name of the legal entity or entities, trusts or legal figures that have participation or control over the legal entity, trusts, or legal figures.
• Country or jurisdiction of creation, constitution, or registration.
• Country or jurisdiction of residence for tax purposes.
• Key in the RFC or tax identification number, or its equivalent, if you are a resident abroad, for tax purposes.
• Tax Address

Sanctions

The established sanctions will be the following:

• Failure to Obtain, Retain, or Submit Controlling Beneficiary Information: From $1,500,000.00 to $2,000,000.00 for each beneficiary that is part of the legal entity, trust or legal figure in question.
• Failure to keep the information related to the controlling beneficiaries up to date: From $800,000.00 to $1,000,000.00 for each beneficiary that is part of the legal entity, trust, or legal figure in question.
• Submit the information of the controlling beneficiaries incompletely, inaccurately, with mistakes or in a manner different from that indicated in the tax provisions: From $500,000.00 to $800,000.00 for each beneficiary that is part of the legal entity, trust, or legal figure in question.

Additionally, non-compliance with this obligation will result in the tax authorities issuing a negative compliance opinion.

We highly recommend contacting your legal advisors to comply with this new obligation in a timely manner in order to avoid possible fines.