Tax haven informative return exemption is eliminated in Mexico

On July 14 the Mexican tax authority published an amendment to the Miscellaneous Tax Resolution for 2016 (the “MTR”). Among other changes, this amendment eliminates the last paragraph of rule 3.19.11, which provided an exemption with respect to the obligation to file an information return annually with the Mexican tax authority regarding preferential tax regimes.

By way of background, the second paragraph of article 178 of the Mexican Income Tax Law (the “MITL”) provides that taxpayers on the following two scenarios are required to file an information return annually:

  • Taxpayers that generate income of any kind from jurisdictions considered tax havens, as per the list included in the transitory provisions of the MITL; and/or
  • Taxpayers that perform an activity through foreign fiscally transparent entities.

On that respect, the last paragraph of rule 3.19.11, which is now eliminated through this amendment, stated that taxpayers that obtain income from countries with which Mexico has entered into a comprehensive information exchange agreement were not subject to the information return requirement of the second paragraph of article 178 of the MITL. These jurisdictions are listed on rule 2.1.2 of the MTR.

Accordingly, taxpayers that were exempt from filing said information return due to a comprehensive information exchange agreement with Mexico, are now required to file the information return, which is due on February 2017.

If you wish to discuss how these changes may impact your situation, contact our advisors in Mexico Brook & Cano.