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馃攳 Who Is the Controlling Beneficiary? Mexico Sharpens Its Risk-Based Approach
The Mexican tax authority has issued detailed rules to identify the controlling beneficiary, applicable during audits and international information exchanges. This framework鈥攁nchored in the Federal Tax Code and the Tax Miscellaneous Resolution鈥攔equires thorough and documented due diligence.
馃搶 Key Takeaways You Should Know:
- Always a Physical Person. Public entities like the Mexican State are excluded. Only individuals can be considered controlling beneficiaries.
- Private Entities Must Identify. If private capital is involved鈥攅ven alongside public entities鈥攜ou must identify the controlling beneficiaries of the private participants.
- Think Beyond Borders. The obligation includes foreign entities, trusts, and legal structures. Reasonable efforts must be made to trace beneficiaries internationally.
- Default Options Apply. If no beneficiary can be identified after reasonable efforts, the sole administrator or board members may be deemed controlling beneficiaries.
- Listed Companies? Use Article 49 Bis 2. For publicly traded companies, use the report outlined in the General Provisions for Securities Issuers. But if it reveals participation by other entities or trusts, their controlling beneficiaries must also be identified.
馃搼 Trusts and Similar Legal Figures:
- Mexican Residency Triggers Obligations. If you're a Mexican tax resident acting as trustee for a foreign trust, you're required to comply with controlling beneficiary rules.
- Apply the Right Rules. Trustees must follow the Federal Tax Code and Tax Miscellaneous Resolution to maintain accurate, complete, and updated records.
- Financial Entities? Use Annexes 25 and 25-Bis. These outline due diligence obligations for financial accounts under the current Miscellaneous Resolution.
鈿狅笍 This isn鈥檛 just technical鈥攊t鈥檚 strategic. Proper identification of controlling beneficiaries can make or break compliance outcomes, especially in cross-border audits and treaty-based exchanges.
馃挰 Does your organization have a clear protocol for identifying controlling beneficiaries? What challenges have you faced with international structures?
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