The Second Section of the Mexican Supreme Court of Justice (SCJN) on June 14, 2023, ruled that it is constitutional for the Tax Administration Service (SAT) to request from taxpayers information related to their controlling beneficiaries.
On January 1, 2022, amendments to articles 32-B Ter to 32-B Quinquies of the Federal Tax Code (CFF) as well as rules 2.1.47(section XXI), 2.8.1.20, 2.8.1.21 and 2.8.1.22 of the General Tax Rules (RMF) entered into force. These amendments impose the obligation on legal entities, trustees, settlors or beneficiaries – in the case of trusts – as well as to contracting parties or members, in case of any other legal concept, the obligation to gather and keep, as part of their accounting records, and to provide to the SAT, complete, reliable and updated information about their controlling beneficiaries.
As a result of the foregoing, constitutional challenges were filed against such amendments. On June 14, 2023, the Second Section of the SCJN ruled the constitutionality of the power granted to the SAT to review and request from taxpayers information related to their controlling beneficiaries. The SCJ considered that the amendments contemplated in the CFF did not affect taxpayers rights, while they help to strengthen the tax system to combat tax evasion, terrorist financing and money laundering.
It is important to mention that the decision of the SCJN is a mandatory precedent for all Mexican jurisdictional authorities. So, it is recommended that taxpayers adopt a proactive position by identifying and documenting the information related to their controlling beneficiaries or, where appropriate, the reasons that prevent such identification.
The attorneys at Holland & Knight are available to assist you with any of these issues. Please contact the Holland & Knight attorney you work with regularly or any of the authors for assistance.