On September 22, 2023, jurisprudences were issued by the Second Chamber of the Supreme Court of Justice of the Nation and published in the Judicial Weekly of the Federation. These jurisprudences resolved the constitutionality of the obligation to identify, obtain, conserve, and provide information to the Tax Administration Service concerning the controlling beneficiaries or “Beneficiario Controlador”.
The Beneficiario Controlador, a response to the increasing demand for transparency in financial dealings, refers to the persons who ultimately own or control a legal entity or arrangement such as a company, trust, or foundation. They have been subject to increased scrutiny in recent years.
As per the resolution, it is indeed constitutional for entities obliged to enforce this measure. It primarily includes financial institutions like banks, financial services firms, and in some cases, real estate brokers, accountants, and lawyers. These entities are required to collect, maintain and share this information to the Tax Administration Service.
Understanding the Beneficiario Controlador’s role can help prevent illicit activities often hidden behind layers of complex and opaque ownership structures. It could include acts like tax evasion, money laundering, and corruption. Detailed assessment and clear reporting of these controller beneficiaries can feed into a heightened level of transparency and accountability.
The new obligation highlights an important development in Mexico’s legal framework concerning financial transparency and signals a more significant role for compliance in the region’s financial sector. As the government continues to tighten its grip on these measures, this development might act as the catalyst for many more such changes in the future.
For more detailed insights about the resolution, please visit Hogan Lovells’ full article.