Are there New Rules in Mexico about Disclosing Transactions?
Obligations for taxpayers and advisors under Mexico’s mandatory disclosure rules (MDRs) are in effect.
Looking to action 12 of the OECD’s Base Erosion and Profit Shifting framework, in December 2019 Mexico enacted a new chapter of its Federal Tax Code focusing on MDRs. This chapter regulates the Mexican MDR obligations, the esquemas reportable, or Informative Return for Reportable Transactions.
Under the new rules, tax advisors must disclose “generalized” and “customized” (or “personalized”) reportable transactions. Generalized transactions are those that (a) seek to be traded broadly to all kinds of taxpayers or to a specific group thereof; moreover, (b) even if these transactions require minimal or no adaptation to a taxpayer’s specific circumstances, the way of obtaining a tax benefit is the same. Personalized reportable structures are those that are designed, traded, organized, implemented, or managed to adapt to a specific taxpayer’s particular circumstances.
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https://www.linkedin.com/in/derren-joseph-ea-0345332/ DERREN JOSEPH:
If are cross-border tax arrangements, which may help to optimize the taxpayer's position, the accountant or a tax advisor, or a tax lawyer is required to disclose those arrangements to the relevant authorities. Can you comment on the new rules that have been phased into Mexico to that effect as well, please?
CARLOS MORALES:
Yeah, so of course, each year we have at least several huge lists of those transactions with have to be disclosed. And this year, the main portal fingers that the tax return has to be disclosed. So, eh, for individuals who will have to file their own or return on, on April or corporations or March, we have to disclose that. And in you, you have the look that what are you doing? What kind of transaction is the one that should be disclosed also because we have to be very transparent. And if those transactions are, let's say absurd by the authority and you didn't, eh, disclose on your tax return, then there are higher penalties. Eh, so it is very safe to look at this. There are a lot of them it's very convenient to have. This is called miscellanea. If anyone wants the listing, I could send you off course.
DERREN JOSEPH:
Fantastic. Thanks for that.
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