Obligation to Report Income and Transactions in Countries Listed Under the Income Tax Law


The recent amendments to the Omnibus Tax Ruling for 2016, restarts the obligation for Mexican residents with investments in certain countries, to report their income and transactions that have been carried out through foreign vehicles or legal entities located in jurisdictions such as: the Netherlands Antilles (Bonaire, Curacao, Saba, St. Eustache, St. Maarten), Aruba, Bahamas Bahrein, Barbados, Belize, Bermuda, Costa Rica, United Arab Emirates, Gibraltar, Hong Kong, Isle of Man, Cayman Islands, Guernsey, Jersey, Panama, Samoa, St. Lucia, Uruguay.
In accordance with the Third Amendment to the 2016 Omnibus Tax Ruling, rule 3.19.9 and the last paragraph of rule 3.19.11 are repealed. These regulations allowed Mexican residents not to report annually investments that were held in foreign vehicles or legal entities, including those which are transparent for tax purposes, in countries that are listed in the transitory provisions of the Income Tax Law (“tax havens”), provided that their investments did not qualify as Preferential Tax Regimes (“REFIPRES” as its Spanish acronym) and the country where such vehicle or legal entity was located, had in effect an agreement to avoid double taxation or exchange of information with Mexico.
As such, at the heart of the amendment to the abovementioned tax rules; many of the investments that Mexican residents had in the aforementioned countries (those which are included in the transitory provisions of the Income Tax Law), must now be reported to the Tax Administration Service in February of the following fiscal year.
Furthermore, we recommend a thorough revision of the investment structures in place with the abovementioned countries so as to verify the impact of these amendments.
The tax and wealth planning lawyers of the Firm remain at your disposal for any questions or doubts arising out of these provisions, as well as advising on how to comply with the subsequent fiscal obligations in a legal and efficient manner.



Gerardo Nieto nieto@basham.com.mx
Gil Zenteno zenteno@basham.com.mx
Alejandro Barrera barrera@basham.com.mx
Victor Barajas mbarajas@basham.com.mx
Sergio Barajas barajas@basham.com.mx
Mario Barrera mbarrera@basham.com.mx

Mexico City, August 2nd 2016.