Controller Beneficiary Bulletin

By amendment to the Federal Tax Code in January 2022, all legal entity taxpayers are required to identify and maintain as part of their accounting the updated information of their controlling beneficiaries. 

A Controlling Beneficiaries are considered to be the individuals who ultimately receive the benefits such as profits and/or exercise control over a Mexican entity, i.e., those individuals who are behind the controlling entities, even if such individuals reside abroad. 

As it is in many companies, when it is not possible to identify these individuals because the shares of the Mexican entity, or of the controlling entities, are listed on the stock exchange market, then the entity in Mexico is required to identify the members of the board of directors of both the Mexican entity and the controlling entities. It is necessary to conduct an analysis to determine which controlling entity should disclose information about the members of the board of directors to comply with the requirement of identifying controlling beneficiaries.

The documentation and information of the controlling beneficiaries will only be provided to the tax authorities when requested through an official requirement. Once the official requirement is received, there will be a term of fifteen (15) business days to submit the documentation and information of the controlling beneficiaries to the tax authorities.

Due to the short deadline, it is recommended that Mexican entities gather the required information and documentation in a physical or electronic file and not wait until receiving the formal request from the tax authorities. It is  necessary: (i) to determine who is the person that ultimately receives the economic benefits and/or exercises control over the Mexican entity or who the members of the board are; (ii) to gather all the information and documentation requested by tax legislation, which includes certain sensitive and personal information of the controlling beneficiary, and evaluate the best way to provide it to the tax authorities without compromising the confidentiality and sensitivity of such information; and, (iii) in the event that the controlling beneficiary resides abroad, obtain certain apostilled documents. Therefore, it is advisable that Mexican entities gather all the corresponding information and documentation in advance of the possible official requirement. 

Failure to submit the information of the controlling beneficiaries in due time and form to the tax authority, may result in fines for the Mexican entity, as follows: 

a) From MXN$1,686,750.00 to MXN$2,249,000.00, for each controlling beneficiary, in case of failure to obtain, keep and/or submit the information through the means and in the formats established by the tax authority. 

b) From MXN$899,600.00 to MXN$1,124,500.00, for each controlling beneficiary, in case the information regarding the controlling beneficiaries is not updated.

c) From MXN$562,250.00 to MXN$899,600.00, for each controlling beneficiary, in case of submitting incomplete or inaccurate information, with errors or differently than specified by the tax authorities.

We are happy to assist with the analysis and compilation of the information to assemble the controlling beneficiary file, as well as to evaluate the best way to maintain and submit the information to the tax authorities.