Mexico, in consideration of the commitments and treaties relating to international, both fiscal as of Prevention of Money-Laundering (AML) —particularly the derivatives of the Financial Action task force (FATF)—, updated constantly, its legislation with the aim of strengthening the exchange of information on these subjects.
Due to the above, as well as the report issued by the Organization for Economic Cooperation and Development (OECD) called To Beneficial Ownership Implementation Toolkit, from 1 January 2022 was added in fiscal matters, the obligation to identify the beneficiary controller, through the reform of the Tax Code of the Russian Federation (CFF).
In this collaboration addresses the modification related to the obligation to keep updated the relationship of partners and shareholders of companies before the Federal Taxpayer Registration (RFC), which is directly linked to the identification of the beneficiary driver.
General framework and objective of the reform
With the aim of generating greater tax transparency, the Federal Government, having as its axis guiding the fight against tax evasion and money laundering, incorporated in the CFF various obligations of identification and monitoring of the beneficiary driver.
Definition of a beneficiary driver
(Article 32-B in Pursuit of CFF)
A beneficiary person controller is the natural person or group of natural persons who:
- Directly, or by means of another person or persons or legal acts, get the benefit arising out of your participation in a juridical person, a trust or any other legal entity, or on whose behalf a transaction is made, even contingent.
- Of direct, indirect or contingent, exercising control of the entity, a trust or any other legal entity.
Exercise of control
It is considered that a person exerts control when, through the ownership of securities, contract or any other legal act, you can:
- To impose decisions at general meetings or to appoint/remove the majority of the administrators.
- Exercise voting rights in respect of more than 15% of the share capital.
- Direct the management, strategy and / or the main policies of the entity.
In the case of trusts, are considered beneficiaries drivers the trustor, the trustee, the trustee and any other person who exercises effective control.
To the interpretation of these provisions, the CFF refers to the recommendations of the FATF and the Global Forum on Transparency and Exchange of Information for Tax Purposes of the OECD, provided they do not conflict with mexico’s tax legislation.
Identification of the beneficiary driver
The Resolution Miscellaneous Fiscal 2022, in the rule 2.8.1.20., provides that the determination of the beneficiary controller must be done by a test in cascade, by applying successively the criteria provided for in article 32-B-C of the CFF.
This test involves identifying:
- The people who get the economic benefit, even contingent.
- People who exercise control.
When it is not possible to identify the beneficiary controller under these criteria, it should be considered as such by the sole manager or, in his case, the members of the board of directors.
For obtaining the information, you must:
- Identify, verify, and validate the beneficiaries drivers.
- Indicate percentages of participation in the social capital.
- Integrate information about the chain of ownership and control chain.
However, the legislation does not expressly provide for the assumption of moral people with a large number of partners or shareholders.
Obligations of beneficiary driver
(Article 32-B Quinquies of the CFF and rule 2.8.1.21. of the RM to 2022)
The corporations, fiduciary, settlors, trustees and other parties involved must:
- Obtain and maintain, as part of its accounting records, the information of the beneficiary driver.
- To provide such information to the SAT when it is required.
To do this, they shall comply with the following duties:
- Implement internal control systems, properly documented, and reasonable.
- Identify, verify, and validate the beneficiary driver and the control string.
- Indicate the percentages of direct or indirect participation.
- Keep information accurate, complete, accurate and up-to-date.
- To allow timely access to the tax authority the information and relevant documentation.
When the SAT required information, this shall be submitted within a period of 15 days, extendable for 10 additional days.
Required information and rules apply
The rule 2.8.1.22. of the RM to 2022 outlines the information that should be integrated into the corporations, trusts and other legal institutions in respect of their beneficiaries drivers.
Violations and penalties
The breach of the obligations generated fines for each beneficiary controller, including:
- Do not obtain, retain, or submit the information required:
From $1,500,000 to $2,000,000 - Do not keep the information:
$800,000 to $1,000,000 - Submit information which is incomplete or incorrect:
$500,000 to $800,000
In addition, failure to comply may result in the opinion of tax compliance is issued in a negative sense, in accordance with article 32-D of the CFF.
Additional obligation: an update of partners and shareholders
(Article 27, paragraph B, section VI, of CFF)
In addition to the obligation to identify the beneficiary driver, taxpayers must keep up-to-date the relationship of partners or shareholders before the SAT, including the identification of those who exercise effective control.
This obligation relates to the joint and several liability of the partners or shareholders in respect of the contributions of the moral person and the possible restriction or cancellation of a Certificate of Label Digital (CSD).
Fines for non-compliance of this obligation are smaller than those relating to the beneficiary controller; however, its operational impact can be significant.
Conclusion
The inclusion of the concept of beneficiary driver in the tax legislation reinforces the commitment of the Federal Government in the fight against tax evasion and money laundering, as well as in the international exchange of information.
However, the analysis of the regulation is clear that there are still areas of uncertainty for their correct identification, especially in corporate structures complex, where there is often chosen point to the sole manager or the board of directors.
In our opinion, the proper enforcement of these obligations requires the implementation of guidelines and questionnaires internal that allow for the identification, integration, conservation and update the information of the beneficiary controller, taking account of the particularities of each contributor, and ensuring a proper treatment of confidential and personal data.