This GMS Flash Alert reports on the obligation taxpayers have to file an “informative return” in 2017 related to fiscal year 2016 when receiving any kind of income from tax haven jurisdictions.
Individuals qualifying as tax residents of Mexico will be required to file an “informative return” (“declaración informativa”) in 2017 related to fiscal year 2016 when:
For Mexican tax purposes, foreign figures or entities are considered to be pass-through when:
In addition, Mexican tax law considers the following to be “foreign figures”: trusts, associations, investment funds, and any other similar legal vehicle established under foreign law that does not have “legal capacity.”
Some rules eliminated on August 15, 2016, from the Miscellaneous Regulations2 had granted an exception for individuals to file an informative return if they were complying with certain requirements. Since the rule’s abolition, the obligation to submit informative returns has become applicable to more taxpayers.
The informative return should be filed in February regarding income generated in the previous fiscal year. However, there is a rule within the Miscellaneous Regulations that allows filing it until May.
Not filing this informative return will presume that the individual has income from a preferential tax regime3 and, in addition, is considered by the tax authorities as a tax offense punishable by a prison sentence of between three months and three years.
Although each case should be examined individually, generally speaking individuals who qualify as tax residents will be obligated to file this informative return if they:
It is not expected that the Mexican tax authorities will again issue rules providing for an exception to file the informative return; as such, this return should be filed no later than May 31, 2017, to mitigate any risks.
1 Tax haven territories listed in the Transitory Provisions of the Mexican tax law (las disposiciones transitorias de la Ley del Impuesto Sobre la Renta) are noted in the table below:
|American Samoa||Hashemite Kingdom of Jordan||Republic of Guyana
|Anguilla||Hong Kong||Republic of Honduras
|Antigua and Barbuda||Independent State of Western Samoa||Republic of Liberia
|Archipelago of Svalbard||Island of Qeshm||Republic of Maldives
|Aruba||Islands of Guernsey, Jersey, Alderney, Great Sark, Herm, Little Sark, Brecqhou, Jethou,Lihou (Channel Islands)||Republic of Mauritius
|Ascension||Republic of Nauru
|Republic of Panama
|Barbados||Isle of Man
||Republic of San Marino
|Belize||Kindom of Switzerland
||Republic of Seychelles
|Bermuda||Kingdom of Tonga
||Republic of the Marshall Islands
|British Virgins Islands||Kirbati
||Republic of Trinidad and Tobago
||Republic of Tunisia
||Republic of Vanuatu
||Republic of Yemen
|Canary Islands Special Zone||Malta
||Saint Kitts and Nevis
|Christmas Island||Nertherlands Antilles
|Cocos or Keeling Islands||Niue||Saint Pierre and Miquelon
|Commonwealth of Dominica||Norfolk Island||Saint Vincent and the Grendadines|
|Commonwealth of Puerto Rico||Pacific Islands||Solomon Islands|
|Commonwealth of the Bahamas||Patau||State of Bahrain|
|Cook Islands||Pitcairn||State of Kuwait|
|Democratic Socialist Republic of Sri Lanka||Principality of Andorra||State of Qatar|
|Eastern Republic of Uruguay||Principality of Liechtenstein||Sultanate of Oman|
||Principality of Monaco||Tokelau|
|Free Zone of Ostrava
||Republic of Albania||Trieste|
||Republic of Angola||Tristan da Cunha|
||Republic of Cape Verde
||Turks and Caicos Islands|
||Republic of Costa Rica
||Republic of Cyprus
||United Arab Emirates|
||Republic of Dijbouti
||United States Virgin Islands|
2 Resolución Miscelánea Fiscal .
3 Having preferential tax regime income means that the taxable income will be what is generated by the foreign entity/figure, although such income may not have been distributed/paid to the individual.
|United States Virgin Islands|
The information contained in this newsletter was submitted by the KPMG International member firm in Mexico.
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