In tax regulation, a term that has become increasingly important in recent years is ‘controlling beneficiary’. What exactly is this key player in the corporate arena and why is it crucial for regulatory compliance and tax transparency?
The term ‘controlling beneficiary’ refers to a person who, without necessarily being the majority shareholder or having a significant shareholding in a company, trust, or other legal entity, exercises direct or indirect control over it, obtaining benefits derived from his or her participation.
This figure is of great importance for the Tax Administration Service (SAT), which requires its identification as part of the tax obligations. In cases where it is difficult to identify the controlling beneficiary, as in the case of public issuers, the natural person who holds the position of Sole Administrator or the members of the Board of Directors is considered as such, according to the Mexican Institute of Finance Executives (IMEF).
The obligation to identify the controlling beneficiaries is established in Article 32-B of the Federal Tax Code as of January 1, 2022, with the purpose of combating tax evasion and money laundering. This responsibility falls on corporations or other legal entities, excluding individuals.
IMEF highlights the importance for companies to establish internal control procedures to keep the information of the controlling beneficiaries updated, thus avoiding potential problems with the SAT.
Failure to comply with this obligation can result in considerable fines, reaching up to 2 million pesos for each undeclared controlling beneficiary that is part of the legal entity.
Therefore, it is essential that companies are aware of these tax obligations and take appropriate measures to comply with them. Proper identification of controlling beneficiaries is not only a legal requirement but also a fundamental practice to ensure integrity and ethics in the business environment.
Furthermore, the establishment of internal procedures not only helps to avoid potential sanctions for non-compliance but also strengthens the company’s reputation.
In a landscape of increasingly stringent regulation and oversight, tax compliance diligence becomes a key factor for the long-term success and sustainability of any organization.
Derived from the above, the specialized team in the tax area of Vega, Guerrero & Asociados is available to offer the necessary support and guidance to comply with these regulations in the tax field. We are committed to providing you with the necessary support to address these changes and ensure your company’s compliance.
