Mexico makes tax reforms every year, and this year’s changes have caused some controversy.
As of January 1, 2021, legal entities (also called legal persons) are now expressly required to hold and protect all documentation regarding changes in their corporate structure.
Previously, the tax department (SAT) requested these documents for verification when supervising an exercise, during an audit or a home visit. However, it is now a requirement to hold and have all these documents included in the entity’s books.
Article 30 of the SAT Code states in detail which documentation required for which event.
SATs documentation requirements change depending on the type of adjustment to the corporate structure, in some instances the docs will be kept as support only.
However, the new requirements cover capital increases (due to capitalization of debt, liabilities and reserves), as well as decreases in capital, mergers, spin-offs, distribution of dividends or repayment of shares—all the most common functions outside the day-to-day.
It is also important to note that there has been a change to the dates for rules introduced in 2020. Article 2.4.19 (Portal of procedures and services – SAT) has been adjusted to confirm filing dates relevant for new taxpayers, and taxpayers who have not complied.
Contact your Auxadi Tax Team for more information or to check on your status.