The current state of the Mexican tax system brings new figures, such as the controlling beneficiary. A character updates the benefits model from legal actors. You need to figure out what it’s about.

If you have questions about this or other labor law issues and want personalized advice, write to us!

The controlling beneficiary born in 2022

We’ve been hearing about the controlling beneficiary since last year when the Financial Action Task Force unveiled its implementation. Finally, a new actor that comes to reinforce the Mexican tax architecture a bit and that requires your direct knowledge:

• As a general concept, we can discuss the controlling beneficiaries exercising effective control over a legal institution.
• It becomes evident that they will receive direct benefits from the institution or person mentioned.
• The Organization for Cooperation and Development also defines as the actual owners of an organization, company, or association.

Therefore, this reform has become relevant to define the genuine recipient of the benefits of a business. However, do you know why this concept developed in the Mexican and world tax landscape?

What is the importance of the controlling beneficiary?

The concept of the controlling beneficiary would only be created with it serving a purpose regarding the tax landscape. That is why it is so important to know a little about the importance that said character has according to tax agencies:

• Due to the implications of said actor, it is vital to avoid tax evasion. It is because this function can only be performed by natural persons and not legal entities.
• By the very property of its transparency, it understands that it is necessary to prevent money laundering. But unfortunately, one of the most common activities that ghost companies usually carry out is collaborating with drug traffickers and smugglers.
• Based on the previous point, it defines that this character also acts against the financing of terrorism. After all, the diversion of funds to destinations such as criminal organizations is prevented.
• For all of the above, this figure forms part of the collaboration with international forces to fight against corruption.

As there is a natural person who directly benefits from a company, practices such as the establishment of shell companies are avoided. In this way, it is unlikely that criminal and terrorist activities can be carried out by diverting funds. 

What happens if there is no controlling beneficiary?

You might think this actor’s appointment is a suggestion or something of choice, but it’s not really. He is a mandatory figure protected by the Federal Tax Code, and that can lead to sanctions for non-compliance: 

• If an organization or company omits information regarding the existence of a real beneficiary, a fine will impose. This can reach up to 2 million pesos for each actor receiving benefits from the company.
• Some companies may have information on the beneficiaries, but it does not correspond to the present. They are less severe in these cases but can easily reach up to one million pesos per beneficiary.
• The law also sanctions any error or omission of specific information regarding the data of the actual owners. We are talking about amounts around 700,000 pesos, reaching a limit of 800,00 pesos according to what the SAT has.

For this reason, any company must know everything related to what the controlling beneficiary represents. However, sometimes it takes work to be aware of all the updates in the Tax Code and manage business accounting. 

Stay up to date with tax laws with PCP Consultores

Hiring an agency like PCP Consultores is necessary for any Mexico company, organization, or legal entity. After all, many problems are avoided regarding legal deviations and tax obligations that must be fulfilled without fail. 

For this reason, PCP Consultores is your best option as an accounting and tax advisor. Don’t you believe it? You should know our services, and on our website, you can find a lot of information about them. So contact us, and you can also clarify your doubts with our customer service team.