Global Forum On Transparency and Exchange of Information For Tax Purposes: Global Forum On Transparency and Exchange of Information For Tax Purposes Peer Reviews: Mexico 2014

GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
OF INFORMATION FOR TAX PURPOSES

Peer Review Report
Phase 2
Implementation of the Standard
in Practice
Global Forum on Transparency and Exchange of Information
for Tax Purposes
PEER REVIEWS, PHASE 2: MEXICO
This report contains a Phase 2: Implementation of the Standards in Practice review, as well
as revised version of the Phase 1: Legal and Regulatory Framework review already released
for this country.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 120 jurisdictions which participate in the work of the
Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These
standards are primarily reected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
party. Fishing expeditions are not authorised, but all foreseeably relevant information must
be provided, including bank information and information held by duciaries, regardless of the
existence of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identied by the Global Forum as
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1
reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange
of information, while Phase 2 reviews look at the practical implementation of that framework.
Some Global Forum members are undergoing combined Phase 1 plus Phase 2 reviews.
The ultimate goal is to help jurisdictions to effectively implement the international standards
of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus represent
agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange of
Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency and www.eoi-tax.org.
MEXICO
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Consult this publication on line at http://dx.doi.org/10.1787/9789264217751-en.
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ISBN 978-92-64-21774-4
23 2014 21 1 P
9HSTCQE*cbhhee+
Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Mexico 2014
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
August 2014
(reflecting the legal and regulatory framework
as at May 2014)
This work is published on the responsibility of the Secretary-General of the OECD.
The opinions expressed and arguments employed herein do not necessarily reflect
the official views of the OECD or of the governments of its member countries or
those of the Global Forum on Transparency and Exchange of Information for Tax
Purposes.
This document and any map included herein are without prejudice to the status of
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boundaries and to the name of any territory, city or area.
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Series: Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews
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OECD (2014), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
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PEER REVIEW REPORT PHASE 2 MEXICO OECD 2014
TABLE OF CONTENTS 3
Table of Contents
About the Global Forum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Information and methodology used for the peer review of Mexico. . . . . . . . . . . .11
Overview of Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
A.2. Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
B. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
B.1. Competent Authoritys ability to obtain and provide information. . . . . . . . 66
B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 80
C. Exchanging Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
C.1. Exchange-of-information mechanisms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
C.2. Exchange-of-information mechanisms with all relevant partners. . . . . . . . 96
C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . 100
C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . .101
4 TABLE OF CONTENTS
Summar y of Deter minations and Factor s Under lying Recommendations. . . 109
Annex 1: Jur isdictions r esponse to the r eview r epor t . . . . . . . . . . . . . . . . . . . .113
Annex 2: List of all Exchange-of-Infor mation Mechanisms . . . . . . . . . . . . . . .114
Annex 3: List of laws, r egulations and other r elevant mater ial. . . . . . . . . . . . 122
Annex 4: List of author ities inter viewed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
ABOUT THE GLOBAL FORUM 5
About the Global For um
The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
120 jurisdictions, which participate in the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transpar-
ency and exchange of information for tax purposes. These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commen-
tary as updated in 2004. The standards have also been incorporated into
the UN Model Tax Convention.
The standards provide for international exchange on request of fore-
seeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party. Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed. This process is
undertaken in two phases. Phase 1 reviews assess the quality of a jurisdic-
tions legal and regulatory framework for the exchange of information, while
Phase 2 reviews look at the practical implementation of that framework. Some
Global Forum members are undergoing combined Phase 1 and Phase 2
reviews. The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitor-
ing of jurisdictions following the conclusion of a review. The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to www.oecd.org/tax/transparency and
www.eoi-tax.org.
EXECUTIVE SUMMARY 7
Executive Summar y
1. This report summarises the legal and regulatory framework for
transparency and exchange of information in Mexico as well as the practi-
cal implementation of that framework. The assessment of effectiveness in
practice has been performed in relation to a three-year period. The interna-
tional standard, which is set out in the Global Forums Terms of Reference
to Monitor and Review Progress Towards Transparency and Exchange
of Information, is concerned with the availability of relevant information
within a jurisdiction, the competent authoritys ability to gain timely access
to that information, and in turn, whether that information can be effectively
exchanged with its exchange of information (EOI) partners.
2. The gross domestic product (GDP) of Mexico is the 14
th
largest in the
world. Mexico is a Federal Republic comprised of 31 States plus the Federal
District of Mexico City. The main taxes income tax and value added tax
are levied at the federal level. Some states apply direct taxes to a limited
degree.
3. Mexico is committed to the internationally agreed standard for
exchange of information (EOI) in tax matters. It has signed double tax con-
ventions (DTCs) and taxation information exchange agreements (TIEAs)
with 72 jurisdictions, the large majority of which are currently in force and
allow Mexico to exchange information to the standard. On 1 September
2012, the Convention on Mutual Administrative Assistance in Tax Matters
and its protocol entered into force in Mexico (the Multilateral Convention).
The Multilateral Convention allows Mexico to exchange information with
79 jurisdictions (provided that such jurisdictions have ratified the Multilateral
Convention as well). Mexico is in advanced stages of negotiation of DTCs
and TIEAs with further jurisdictions, mostly Global Forum members. Mexico
has not refused to negotiate an exchange of information instrument with
another member of the Global Forum.
4. Mexicos competent authority for exchange of information for tax
purposes, an entity within the Tax Administration Service, has the neces-
sary powers to access ownership and accounting information in order to
respond to requests from foreign counterparts. These access powers cover
8 EXECUTIVE SUMMARY
both information held within the private sector (including banks and other
financial institutions) and government bodies, including public registries.
5. Obligations requiring the retention of relevant ownership informa-
tion in Mexico are found in a variety of acts: the Commercial Enterprises
Act (which covers companies and partnerships), the Commerce Code, the
Federal Tax Code, the Federal Civil Code, the Foreign Investment Act and
the Negotiable Instruments and Credit Transactions Act. In most cases, these
laws create sufficient requirements to ensure the availability of ownership
and identity information. A small gap that existed regarding identity infor-
mation on settlors, beneficiaries and trustees of foreign trusts with Mexican
trustees have been addressed by Mexico, by means of the combination of its
tax laws and the anti-money laundering legislation.
6. Mexican commercial, tax and anti-money laundering (AML) legisla-
tion requires all commercial entities, including financial institutions, to keep
accounting records, including underlying documentation for a minimum of
five years.
7. In respect of banks and other financial institutions, the combination
of banking, accounting and AML legislation imposes appropriate obligations
to ensure that all records pertaining to customers accounts as well as related
financial and transaction information are maintained and available to the
authorities.
8. During the three-year period under review (1 January 2010 to
31 December 2012), Mexico received 74 incoming requests on direct taxation
matters from 15 jurisdictions. Sixty per cent of the requests were received
from Mexicos main trading partner. Mexico answered 30% of the requests
within 90 days, 54% within 180 days and 80% within one year. Eleven per
cent of the requests were replied to after one year had elapsed and 3% of the
requests were still pending at the time of the on-site visit (6 December 2013).
9. Mexicos EOI team comprises of eight full-time officials including
two managers with more than 20 years of experience with EOI. The work of
the EOI Team is overseen by the Head of International Tax Audits who also
has solid EOI experience. The EOI team manages all steps of the EOI pro-
cess, from the receipt and review of the requests, the collection of information
and the reply to the foreign authorities. The officials are all tax auditors and
have full information gathering powers and can directly access information
from taxpayers and information holders (including a number of government
agencies in Mexico that hold information that is relevant for EOI) as well
as the comprehensive databases maintained by Mexicos tax authority. This
centralised approach ensures that information is collected in a timely fashion
by experienced auditors, allowing Mexico to reply to requests in a complete
and accurate manner, while at the same time protecting the confidentiality of
EXECUTIVE SUMMARY 9
taxpayers, as a minimum number of persons are involved in the processing
of an EOI request.
10. Peers that provided input to this review regarded Mexicos EOI Team
as professional, knowledgeable and dedicated to the exchange of informa-
tion process. Peers also acknowledged the responsiveness and accessibility
of the Mexican competent authority. In most cases, the peers reported that
information has been received in full, in the form requested and in a timely
manner. Peer input indicated that bank information was not always provided
on a timely manner, however. Mexico is recommended to use all its access
powers for bank information as efficiently as possible. Moreover, Mexico
should monitor the application of a new law providing for direct access to
bank information.
11. Mexico has been assigned a rating for each of the 10 essential ele-
ments as well as an overall rating. The ratings for the essential elements are
based on the analysis in the text of the report, taking into account the Phase 1
determinations and any recommendations made in respect of Mexico legal
and regulatory framework and the effectiveness of its exchange of infor-
mation in practice. On this basis, Mexico has been assigned the following
ratings: Compliant for elements A.1, A.2, A.3, B.2, C.1, C.2, C.3, C.4 and
C.5; and Largely Compliant for element B.1. In view of the ratings for each
of the essential elements taken in their entirety, the overall rating for Mexico
is Compliant.
12. A follow up report on the steps undertaken by Mexico to answer the
recommendations made in this report should be provided to the PRG within
twelve months of the adoption of this report.
INTRODUCTION 11
Intr oduction
Infor mation and methodology used for the peer r eview of Mexico
13. The assessment of the legal and regulatory framework of the United
Mexican States (hereafter referred to as Mexico) and the practical implemen-
tation and effectiveness of this framework was based on the international
standards for transparency and exchange of information as described in the
Global Forums Terms of Reference to Monitor and Review Progress Towards
Transparency and Exchange of Information, and was prepared using the
Global Forums Methodology for Peer Reviews and Non-Member Reviews.
14. The assessment has been conducted in two stages: Phase 1, carried
out in 2011/2012, and Phase 2, carried out in 2013/2014.
15. The 2012 Phase 1 Report of Mexico was adopted and published by
the Global Forum in March 2012. The assessment was based on information
available to the assessment team including the laws, regulations, notices
and exchange of information mechanisms in force or effect as of January
2012, Mexicos responses to the Phase 1 questionnaire and supplementary
questions, information supplied by partner jurisdictions, and other relevant
sources.
16. The Phase 2 assessment looked at the practical implementation of
Mexicos legal framework, as well as any amendments made to the legal and
regulatory framework since the Phase 1 review. The assessment was based
on the laws, regulations, and EOI mechanisms in force or effect as at 23 May
2014. It also reflects Mexicos responses to the Phase 1 and Phase 2 question-
naires, other information, explanations and materials supplied by Mexico
during and after the Phase 2 on-site visit that took place in Mexico City from
2-6 December 2013 and information supplied by partner jurisdictions. During
the on-site visit, the assessment team met with officials and representatives of
several divisions and subdivisions of Mexicos Tax Administration Service,
including the General Administration for Large Taxpayers, the Central
Administration for International Audits, the Administration for International
Audits 3, the General Direction of International Treaties, the Collection
12 INTRODUCTION
and Enforcement Division; the Public Registry of Property and Commerce/
Ministry of Economy; the National Registry of Foreign Investments; the
Public Notaries; the Directory for Permissions in the Terms of Article 27 of
the Constitution, the General Direction for Legal Affairs; and the National
Banking and Securities Commission. A list of all those interviewed during
the on-site visit is attached to this report as Annex 4.
17. The following analysis reflects the Phase 1 and Phase 2 assessments
of the legal and regulatory framework of Mexico in effect as at 23 May 2014
and the practical implementation and effectiveness of this framework during
the three-year review period of 1 January 2010 to 31 December 2012.
18. The Terms of Reference breaks down the standards of transparency
and exchange of information into 10 essential elements and 31 enumerated
aspects under three broad categories: (A) availability of information; (B)
access to information; and (C) exchange of information. This review assesses
Mexicos legal and regulatory framework against these elements and each of
the enumerated aspects. In respect of each essential element a determination
is made that: (i) the element is in place; (ii) the element is in place, but cer-
tain aspects of the legal implementation of the element need improvement;
or (iii) the element is not in place. These determinations are accompanied by
recommendations on how certain aspects of the system could be strengthened
where relevant. A summary of the findings against those elements is annexed
to this report. In addition, to reflect the Phase 2 component, an assessment is
also made concerning Mexicos practical application of each of the essential
elements and a rating of either: (i) compliant, (ii) largely compliant, (iii) par-
tially compliant, or (iv) non-compliant is assigned to each element. An overall
rating is also assigned to reflect Mexicos overall level of compliance with
the standards.
19. The Phase 1 and Phase 2 assessments were conducted by teams com-
prising expert assessors and representatives of the Global Forum Secretariat.
For the Phase 1 assessment, they were: Mr. Fatih Kaya, Senior Tax Inspector,
Board of Tax Inspection, Ministry of Finance, Turkey; Mr Thanduxolo Twala,
Manager, International Development and Treaties, Legal and Policy Division,
South African Revenue Service, South Africa; and Mr. Beat Gisler from the
Global Forum Secretariat. In the Phase 2 assessment, the assessment team
comprised Mr. Fatih Kaya, Senior Tax Inspector, Board of Tax Inspection,
Turkish Ministry of Finance; Mr. Thanduxolo Twala, Manager, International
Development and Treaties, Legal and Policy Division, South African Revenue
Service; and Ms. Renata Teixeira from the Global Forum Secretariat.
INTRODUCTION 13
Over view of Mexico
20. Mexico is a North American country bordering the United States of
America to the North, and Belize and Guatemala to the South. Its territory
occupies a surface of 1 964 375 square kilometres and its coastlines extend
for 11 122 kilometres over the Gulf of Mexico, the Caribbean Sea, and the
Pacific Ocean. With about 121 million inhabitants,
1
Mexico is the third most
populous country in the Americas. Spanish is the language spoken by almost
95% of the citizens, with 68 indigenous languages also spoken nationwide.
The currency is the Mexican Pesos (MXN).
2
21. A Gross Domestic Product (GDP) of approximately USD 1 178 bil-
lion in 2012, makes Mexico the 14
th
largest economy in the world.
3
Its GDP
per capita is USD 9 747 (2012).
4
The economy of Mexico largely relies on
the services sector (63%). Industry (mainly automotive and petrochemi-
cal) accounts for 33% of GDP and agriculture about 4%.
5
Mexico is also
the worlds leading silver producer and the sixth-largest oil-producer,
6

with the public owned Petrleos Mexicanos being the largest company in
Latin America.
7
Mexico has a free market economy in which trade in 2010
amounted to about 31.6% (import of goods and services) and 30.4% (exports
of goods and services) of the total GDP.
8
Mexico is the 10
th
largest importer
and exporter worldwide and is party to the North America Free Trade
Agreement, in force since 1994, as well as to other 11 free trade agreements
with 43 countries in total.
9
Mexicos main trading partners are the United
1. As at 31 December 2012. The World Bank, http://data.worldbank.org/country/
mexico#cp_wdi accessed on 10 February 2014.
2. USD 1 =MXN 13.33. Source: Bank of Mexico, www.banxico.org.mx, accessed
on 10 February 2014.
3. The World Bank, http://data.worldbank.org/country/mexico#cp_wdi, accessed on
10 February 2014.
4. The World Bank, http://data.worldbank.org/country/mexico#cp_wdi, accessed on
10 February 2014.
5. Statistics and Geography National Institution (INEGI) at 31 December
2012, www.inegi.org.mx/sistemas/bie/cuadrosestadisticos/GeneraCuadro.
aspx?s=est&nc=492&c=23920, accessed on 10 February 2014.
6. Mexicos Ministry of Economy, http://economia.gob.mx/comunidad-negocios/
mineria, accessed on 10 February 2014.
7. Petrleos Mexicanos, www.pemex.com, accessed on 10 February 2014.
8. OECD (2013), OECD Country Statistical Profile: Mexico, published on at
13 November 2013 www.oecd-ilibrary.org/economics/country-statistical-profile-
mexico_20752288-table-mex, accessed on 10 February 2014.
9. Ministry of Economy, www.promexico.gob.mx/en_us/promexico/Trade_agree-
ments, accessed on 10 February 2014.
14 INTRODUCTION
States, the Peoples Republic of China (hereinafter China), Canada, Japan,
Germany, the Republic of Korea, Spain, Brazil, Italy and Chinese Taipei.
10

These 10 jurisdictions account for 88% of Mexicos exports, 85% of its
imports and 73% of all foreign investment.
11
22. Foreign entities and individuals, as defined by the Foreign Investment
Law, can freely undertake investments in certain areas (e.g. telecommunica-
tions installations, agriculture, construction, maquilas
12
and energy systems
operations) but have to be registered in a register for foreign investments. The
Law establishes nonetheless that certain activities may be reserved for the
government (such as, petroleum exploration, energy and light generation), or
for Mexican corporations or individuals only, or limited to a minority owner-
ship under governmental permit.
23. Mexico is a founding member of the United Nations and of the
Organization of American States, a contracting party to the GATT/WTO since
1985, party to the Asia-Pacific Economic Cooperation since 1993, a member
of the Organisation for Economic Co-operation and Development since 1994,
and a member of the G20. Mexico is further a member of the Financial Action
Task Force on Money Laundering in South America (GAFISUD).
General information on the legal and tax system
Legal system
24. Mexico has been an independent state since the beginning of the
nineteenth century and adopted its current Constitution (Constitucin
Poltica de los Estados Unidos Mexicanos CPEUM) in 1917. The admin-
istrative organisation of the territory is divided into three levels: federal,
state, and municipal. The federation is composed of 31 states which have
control over their internal regimes, each with its own Constitution, and with
a number of municipalities. In addition, the Federal District of Mexico City
is the seat of the government branches.
10. Ministry of Economy, www.promexico.gob.mx/productos-mexicanos/fortalezas-
de-los-productos-mexicanos-en-el- extranjero.html, accessed on 10 February 2014.
11. Ministry of Economy, www.economia.gob.mx/comunidad-negocios/comercio-
exterior/informacion- estadistica-y-arancelaria, and www.economia.gob.mx/
comunidad-negocios/competitividad-normatividad/inversion-extranjera-directa/
estadistica-oficial-de-ied-en-mexico, accessed on 10 February 2014.
12. Maquila is the industrial or service process for the production, transformation
or repair of foreign goods temporarily imported for its subsequent export, or for
providing export services.
INTRODUCTION 15
25. Mexicos Constitution provides for a tripartite government, separated
into legislative, executive, and judicial branches. Legislative power is exer-
cised by the National Congress, which comprises the Senate and the Chamber
of Representatives. The National Congress makes federal law, imposes taxes,
and approves the national budget and international treaties. The executive
branch is represented by the President who is the head of state.
26. The Mexican legal system is based on Roman law, although case
law decisions rendered by the Supreme Court or by Circuit Courts may
apply as precedence for lower courts. The Constitution is the highest source
of law, followed by international treaties and conventions, federal statutes
and codes. Decrees issued by the President, regulations issued under laws
(including under tax laws), administrative regulations, including the Tax
Administrative Regulations, circulars and case law of the Judicial Branch of
the Federation are also binding sources of Mexican law. Treaties and inter-
national agreements take effect after Senate ratification and, according to
Supreme Court decisions, override contradicting domestic legislation below
the Constitutional level. A complete list of all the legislation and regulations
referred to in the course of this review is set out in Annex 3.
27. At the top of the judicial system is the Supreme Court of Justice.
Judicial power is also vested in the Electoral Tribunal, the Circuit Collegiate
Tribunals, the Circuit Unitary Tribunals, the District Courts; the Council
of the Federal Judiciary; the Federal Jury of Citizens; and the State Courts
and those of the Federal District (Art. 94 of the Federal Constitution and
the Federal Judicial Power Organisation Act). Tax cases are, after a possible
appeal to the tax administration (Servicio de Administracon Tributaria
SAT), heard by specialised regional and federal Tax Justice Courts, whose
decisions can be appealed to the Circuit Collegiate Tribunal and further to
the Supreme Court.
Tax system
28. The tax system in Mexico has its foundation in the Constitution
which states that persons subject to taxation are required to comply with tax
obligations adopted by Congress (Arts. 31(IV) and 73(VII)). Although the
Constitution does not prohibit states legislating on taxation matters (other
than customs), there is a legal arrangement between the federal and local
governments that the major aspects of taxation (mainly income tax and VAT)
are conducted by the federal government.
29. The general rules of the Mexican tax system are established in the
Federal Tax Code. It also provides for rights and obligations of taxpayers,
powers of tax authorities, criminal system in connection with tax matters,
tax collection procedures and administrative system in appeal matters.
16 INTRODUCTION
Some powers of the tax administration are further regulated in the Tax
Administration Service Act. It regulates the activities of SAT, the tax admin-
istration in Mexico. Mexicos competent authority for exchange of information
for tax purposes is the General Administration for Large Taxpayers, through
the Central Administration for International Audits.
30. The scope of the tax obligations such as who is liable to pay taxes,
the taxable objects, the taxation basis, exemptions and applicable rates are set
forth in the special acts regulating each type of tax, notably: the Income Tax
Act, the Business Flat Rate Tax Act, the Value Added Tax Law, the Excise
Tax Act, the Cash Deposit Tax Act and the Tax Administrative Regulations.
31. Mexico imposes direct as well as indirect taxes. Income tax is levied
on individuals and legal entities in accordance with the global income prin-
ciple with a maximum rate of 30%. Foreign taxpayers, without a permanent
establishment in Mexico, obtaining income from Mexican sources are subject
to withholding taxes. A legal entity is considered to be resident in Mexico
for tax purposes if it has its principal administration or place of effective
management in Mexico. The main indirect taxes are value-added tax (IVA)
with a maximum rate of 16% and an excise tax on certain goods (IEPS) of up
to 160% (on e.g. cigarettes). In 2010 taxes on income and profits amounted
to 5.2% of the GDP whereas taxes on goods and services amounted to 9.8%
of the GDP.
13
32. Dividends must generally be included in taxable income. As of 2014,
a 10% withholding tax is levied on dividends distributed by resident compa-
nies to resident individuals or non-residents (either individuals or companies).
The distributing company must withhold the tax. Capital gains are generally
included in the taxable income. As of 2014, capital gains derived by resident
individuals from the sale of shares, credit and financial instruments available
to the general public and sold through the Mexican Stock Exchange will be
subject to a withholding tax rate of 10%. Capital gains from the alienation of
shares which is not carried out through the stock markets are exempt from
tax under certain conditions.
33. Mexico is committed to the internationally agreed standards for
the exchange of information for tax purposes since the beginning of the
Global Forum in 2000. Mexico has presently signed 57 double tax conven-
tions (DTCs), 17 tax information exchange agreements (TIEAs) and the
Convention on Mutual Administrative Assistance in Tax Matters. A complete
list of the agreements which have been concluded by Mexico is set out in
Annex 2 to this report.
13. OECD (2013), OECD Country Statistical Profile: Mexico, published on
13 November 2013 www.oecd-ilibrary.org/economics/country-statistical-profile-
mexico_20752288-table-mex, accessed on 10 February 2014.
INTRODUCTION 17
Overview of the f inancial sector and relevant professions
34. The financial system is comprised of mainly four sectors: banking,
stock market, retirement savings, and insurance and bonds. Other types of
entities such as factoring or financial leasing companies are also part of the
financial system. The central institution in the financial system is the Central
Bank, an autonomous body whose purpose is the issuance and stabilisation
of the currency, the control of the payments system and, in general, the pro-
motion of a financial system sound development. The regulatory agencies
are the National Banking and Securities Commission (CNBV), the National
Commission of the Retirement Saving System (CONSAR) and the National
Insurances and Bond Commission (CNSF). The Financial Intelligence Unit
within the Ministry of Finance and Public Credit is the central anti-money
laundering authority in Mexico.
35. In 2012 there were 48 banks
14
in Mexico managing assets that in
2012 were equivalent to MXN 6.021 trillion (USD 452 billion)
15
; 39% of
the countrys GDP.
16
The 6 largest banks had 85% of total bank assets.
17
In
2012 there were about 102 insurance companies and about 45 188 insurance
intermediaries
18
. The same year there were approximately 3 000 registered
notaries
19
, 377 787 lawyers and 449 711 accountants. These professions are
regulated on the state level. Further, there were 3 157 foreign exchange centres
and 1 223 money remitters.
20
Recent developments
36. On 23 May 2012, Mexico deposited the instrument of ratification
of the OECD/Council of Europe Convention on Mutual Administrative
Assistance in Tax Matters and its protocol. The Multilateral Convention and
its protocol entered into force in Mexico on 1 September 2012 and allow
Mexico to exchange information with 79 jurisdictions (provided that these
jurisdictions have ratified the Multilateral Convention as well).
37. On 17 October 2012, Federal Law for the Prevention and Identification
of Transactions with Illicit Proceeds LFPIORPI was published on Mexicos
14. The National Banking and Securities Commission, www.cnbv.gob.mx.
15. Corresponding to the assets managed by Mexicos private banking sector, www.
banxico.org.mx.
16. Mexicos BNP in 2008 was USD 1 545 billion (source: http://stats.oecd.org).
17. Bank of Mexico, www.banxico.org.mx.
18. National Insurance Commission, www.cnsf.gob.mx/Home/Paginas/Home.aspx.
19. Mexicos Registered Notaries, www.notarios.com.mx/index.
20. FATF Mutual Evaluation Report 2008, www.fatf-gafi.org/dataoecd/31/45/41970081.
pdf.
18 INTRODUCTION
official gazette. The law, which entered into force on 17 July 2013, strengthens
Mexicos anti-money laundering framework, imposing customer due diligence
to service providers that were not covered under the old legal framework.
38. Article 32-B of Federal Tax Code, which deals with the tax admin-
istrations powers to access bank information directly from banks was
amended by Decree of 9 December 2013, effective as of 1 January 2014. The
amendment clarifies that the tax authorities powers to request bank infor-
mation directly from the financial institutions apply in the context of a tax
investigation (exercise of review powers), tax enforcement or tax collection
procedures. Moreover, Article 32-B also expressly states that the tax authori-
ties access powers are an exception to the banking secrecy established in the
Credit Institutions Law.
COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 19
Compliance with the Standar ds
A. Availability of Infor mation
Over view
39. Effective exchange of information requires the availability of reliable
information. In particular, it requires information on the identity of owners
and other stakeholders as well as accounting information on the transactions
carried out by entities and other organisational structures. Such information
may be kept for tax, regulatory, commercial or other reasons. If informa-
tion is not kept or the information is not maintained for a reasonable period
of time, a jurisdictions competent authority may not be able to obtain and
provide it when requested. This section of the report assesses the adequacy
of Mexicos legal and regulatory framework on availability of information.
It also assesses the implementation and effectiveness of this framework in
practice.
40. Mexican commercial law ensures that ownership information on
companies and partnerships has to be kept. Companies and co-operatives are
required to keep a shareholder/member register. Further, partnerships must
establish, keep and register partnership agreements when the partnership is
registered and when ownership is transferred. All these entities have to keep
and submit information that identifies the payee when distributing profits,
including payment of dividends.
41. Mexican companies, co-operatives and partnerships are subject to the
same or very similar requirements under tax law. They are required to keep
a ledger of owners and partners and therein identify each individual partner
20 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION
by their tax identification number. All Mexican companies, co-operatives and
partnerships have to be registered as taxpayers with the Federal Taxpayers
Register. Further, all persons who have ownership interests in Mexican
commercial entities have to be registered in this register. For non-resident
owners, the entity can alternatively submit annually a list of owners to the
tax administration.
42. The above mentioned registration and filing requirements in connec-
tion with the distribution of profits also apply to foreign companies that are
centrally controlled and managed in Mexico and thus considered resident for
tax purposes. This is supported by customer due diligence obligations which
result in identification of the beneficial, i.e. controlling owners of such com-
panies (including owners who have not received profits) where the companies
are involved in transactions with the Mexican financial industry.
43. Mexican fideicomiso, AML and tax legislation assures that relevant
information is available to identify the fiduciaria (trustee), fideicomitente
(settlor) and fideicomisarios (beneficiaries) of a Mexican fideicomiso (trust).
Mexico has taken reasonable measures to ensure the availability of informa-
tion identifying the settlors, trustees and beneficiaries of foreign trusts which
are administered in Mexico or in respect of which a trustee is resident in
Mexico.
44. In practice, updated ownership information of companies is, as a
general rule, only available with the companies themselves. Filing obligations
with the Registrar refer only to founders, and no update after incorporation
needs to be done. The Mexican tax authorities receive information on share-
holders at the time a company distributes dividends to them, and on foreign
shareholders that opted not to have a Mexican tax identification number on an
annual basis. Mexico had no problems to secure company ownership infor-
mation for EOI purposes during the period under review.
45. Mexican companies, partnerships, trusts and non-profit organisa-
tions as well as branches of foreign enterprises are required to keep adequate
accounting records including underlying documentation for a minimum of
five years. Moreover, the requirements provided under Mexican tax legisla-
tion in combination with the new AML law ensure that sufficient accounting
records are kept in all cases for trusts whose only nexus to Mexico are
Mexican trustees or administrators. In Mexico, compliance with all entities
obligations to maintain ownership and accounting information is monitored
by the tax authorities.
46. In respect of banks and other financial institutions, the commercial,
financial, tax and AML legislation imposes appropriate obligations to ensure
that all records pertaining to customers accounts as well as related financial
and transactional information are available.
47. Mexican tax, AML and foreign investment legislation provide sanc-
tions for non-compliance with requirements to keep relevant ownership and
accounting information for relevant entities.
48. During the period under review, Mexico received 74 EOI request
from its treaty partners. Those requests contained 91 inquiries concerning
ownership information; 270 concerning accounting information and under-
lying documentation (such as contracts and agreements) and 34 concerning
banking information. Mexico has also provided information in relation to
confirmation of the beneficiaries of payments, residency determination,
unreported income, information related to avoidance schemes, tax return
information, details on business activities, information about real estate,
entry/presence of foreign individual taxpayers in Mexico, and contact details
of individuals for debt recovery purposes.
A.1. Owner ship and identit y infor mation
J urisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.
49. The Commercial Enterprises Act (Ley General de Sociedades
Mercantiles LGSM) recognises and regulates a set of six commercial entities:
Sociedad de Responsabilidad Limitada (Limited Liability Companies)
Sociedad Annima (Public Limited Liability Companies)
Sociedad en Comandita por Acciones (Limited Stock Partnerships)
Sociedad en Nombre Colectivo (General Partnership)
Sociedad en Comandita Simple (Limited Partnership)
Sociedades Cooperativas (Cooperatives)
21
50. It should be emphasised that, contrary to what is the case in many
other jurisdictions, the above mentioned partnerships have legal personality
for both civil and tax purposes. They gain legal personality once they are
registered in the Public Registry of Commerce (Art. 2 LGSM) and are subject
to the same requirements regarding availability of and access to ownership
and accounting information. Despite the aforementioned commonalities, for
the purpose of consistency with previous reports, general and limited part-
nerships are dealt with under Partnerships (ToR A.1.3) and the entities are
hereinafter referred to by the name used for comparable common law entities.
21. Cooperatives are mainly regulated by the Cooperatives Act (Ley General de
Sociedades Cooperativas LGSC). However, provisions of the LGSM mutatis
mutandis apply (Art. 10 LGSC).
Companies (ToR
22
A.1.1)
51. Mexican legislation recognises three types of companies
23
:
private limited liability company (Sociedad de Responsabilidad
Limitada SdRL)
24
: An SdRL may have from 2 to 50 owners
(Art. 61 LGSM) and the minimum share capital is MXN 3 000
(USD 225) (Art. 62). Its shares are not freely transferable and cannot
be traded publicly. Change of ownership requires approval of the
majority of the shareholders (Art. 65). There were 94 251 SdRLs in
Mexico as at 13 September 2013;
public limited liability company (Sociedad Annima SA)
25
: SAs
are formed by shareholders (at least two) whose liability is lim-
ited to the value of their shares and their minimum share capital
is MXN 50 000 (USD 3 750) (Art. 89(II)). An SA may be formed
by public subscription or public offering, or through an instrument
executed before a notary public. The SA is the most common type of
corporate entity in Mexico, with 961 101 as at 13 September 2013,
143 of which are publicly listed on the Mexican stock exchange
(Sociedad Annima Burstil); and
limited stock partnership (Sociedad en Comandita por Acciones
SCA)
26
: The capital of an SCA is divided into shares. The minimum
share capital is MXN 50 000 (USD 3 750) (Art. 89(II) and 208). The
entity is formed by general partners who are jointly and severally
liable, without limitation, for the societys obligations and limited
partners who are liable up to the value of their shares (Art. 207
LGSM). Unless otherwise provided, the same rules as for an SA
apply (Art. 208). There were 30 SCAs in Mexico as at 13 September
2013.
co-operatives (Sociedades Cooperativas
27
): Cooperatives have
characteristics of both companies and partnerships. They are formed
by individuals with common interests. Their purpose is to satisfy
individual and collective needs by performing economic activities
(Art. 2 LGSC. Cooperatives may be consumer, producer or savings
22. Terms of Reference to Monitor and Review Progress Towards Transparency and
Exchange of Information.
23. Source for statistics: Mexican authorities based on registration in the Federal
Register for Taxpayers (RFC).
24. Arts. 58 86 LGSM.
25. Arts. 87 206 LGSM.
26. Arts. 207 211 LGSM.
27. Cooperatives Act (Ley General de Sociedades Cooperativas LGSC).
and loans co-operatives (Art. 21). The members liability for the
debts of the entity may be limited to the share of the capital they have
subscribed or a proportion of the debts up to an amount specified in
the charter (Art. 14). Provisions of the LGSM mutatis mutandis apply
to co-operatives (Art. 10 LGSC Cooperatives Act Ley General de
Sociedades Cooperativas LGSC). There were 138 819 co-opera-
tives in Mexico as at 13 September 2013.
52. Prior to incorporation of a company, co-operative or partnership,
a request has to be made to the Ministry of Foreign Relations (Secretaria
de Relaciones Exteriores SRE) for authorisation to use the name chosen
(Art. 15 LIE and Art. 13 RLIE). The SRE will also examine if any intended
participation of foreign capital is allowed (Art. 27(I) CPEUM, Art. 14 RLIE).
53. In order to be incorporated, a charter has to be established for the
company. The charter is a combination of articles of incorporation and by-
laws. This document designates the founding shareholders and members
(including their name, nationality and domicile as well as the amount or
percentage of their interest in the company), members of the board of direc-
tors or the sole administrator of the entity, its principal officers, the statutory
auditor and its domicile (Art. 6 LGSM). The charter also approves issuance
of powers of attorney to one or more representatives of the entity.
54. Companies must be incorporated before a notary public, who issues
a public deed attesting the charter of the enterprise and registers the entity
(Art. 5 LGSM, Art. 150 LNDF). The charter and any subsequent amend-
ments to it are recorded by and under the custody of a public notary (Arts. 119
and 120 LNDF). The notary has to keep this information for a term of five
years after which records are closed and the documents are submitted to
the General Notarial Archive (Archivo General de Notaras AGN) for
safekeeping and custody (Art. 95). The notary provides information on all
the companies he or she incorporates to the Public Registry of Property and
Commerce and the tax administration on a regular basis. The public nota-
ries that are registered under a specific system (System for Registration and
Announcements in the Federal Taxpayers Registry through a notary public
by remote means Sistema de Inscripcin y Avisos al Registro Federal de
Contribuyentes a travs de fedatario pblico por medios remotos) can pro-
vide both incorporation services and the registration with the SAT.
55. Except in very specific cases (e.g. companies having a fixed capital),
circumstances such as (i) changes to shareholders or (ii) capital increases
resulting in new shareholders joining the company do not require amendment
of the charter and do not need to be submitted to a notary.
56. A co-operative acquires legal personality once its charter has been
notarised (Arts. 12(2) and 13(1) LGSC). The charter of a co-operative must
include the name of the founding members (Art. 12(1)(I)). Members entering
or exiting the co-operative must first be approved by the general meeting of
the co-operative (Art. 36). Mexican authorities advise that there is a require-
ment to document such changes in ownership in minutes of meetings.
Information to be provided to public registers
Public Registry of Property and Commerce (RPPC)
57. Mexican companies and co-operatives must be registered with
the Public Registry of Property and Commerce (Registro Pblico de la
Propiedad y del Comercio RPPC) at the place of their domicile
28
. The
companys charter at incorporation and any amendment thereto must be
submitted to the RPPC (Art. 21(V) CCO). Thus, the identity of the found-
ing members is submitted to the RPPC, as is any change of ownership due
to adjustments to the authorised capital and adjustments upon liquidation,
merger etc. Other changes in ownership do not necessitate amendment to the
companys charter and thus do not require registration. However, a change of
ownership is registered in the companys share register (see below).
58. In most Mexican states, the RPPC registers maintained by local
(municipal) authorities keep copies of the articles of incorporation of com-
panies. At state level (as well as in the Federal District Mexico City), an
electronic database is kept with the main information contained in the articles
of association, including information on founders of legal entities. At the fed-
eral level, the Ministry of Economy keeps a centralised electronic database
containing the same information stored in the databases maintained by the
states and the Federal District. In practice, if the competent authority needs
a copy of the articles of association of a company, it would usually request
such copy to the General Notarial Archive, the RPPC/ Ministry of Economy
or directly from the company. The General Notarial Archive includes acts
28. The PRPC consists of two parts: the Public Registry of Commerce which records
mercantile acts and the Public Registry of Property which records the legal acts
concerning real estate as well as the incorporations and charter amendments of
ordinary partnerships in a special section for such entities. In most states of the
Republic the information of both registries is kept by the same office adminis-
trated by local authorities. The property register is regulated by local legislation
whereas the commerce register is regulated by federal legislation (Art. 18 et
seq. Commerce Code Cdigo de Comercio CCO), the Regulations of the
Public Registry of Commerce and relevant commercial and business laws (such
as Commercial Enterprises Act, Credit Institutions Act etc.) and supplemented
by the Federal Civil Code (CCF)). The RPPC is administered by the Ministry of
Economy.
performed by notaries, including, for instance, articles of incorporation and
any amendments thereof. Public Notaries are obliged to deliver to the General
Archive Notaries their books for final guard, which include acts performed
by the notaries. Moreover, notaries are required to inform the General
Notarial Archive changes to notarial deeds.
59. The notary public incorporating the entity is required to verify the
identity of the founding members and shareholders and ensure that all of
them are registered with the Federal Register for Taxpayers (Registro Federal
de Contribuyentes RFC) (Art. 27(8) Federal Tax Code Cdigo Fiscal de la
Federacin CFF), which is maintained by the Mexican Tax Administration
(Servicio de Administracin Tributaria SAT)
29
(see further below).
60. The RPPC keeps the notarised instruments regarding an entitys
incorporation and later amendments. Mexican authorities advise that there
is no minimum retention period for information registered with RPPC and
thus all records must be kept indefinitely. Relevant information kept by gov-
ernment authorities, including the SRE, the Ministry of Finance and Public
Credit (Secretara de Hacienda y Crdito Pblico SHCP) and the Central
Bank, will usually be considered confidential (see Art. 14 LFAIPG) and
therefore reserved for a period of 12 years. Mexican authorities advise that
once this period expires, the information is declassified but maintained by
the authorities.
61. Corporate dissolutions must be approved by a special shareholders
general meeting which must be notarised before a Notary Public and reg-
istered with the RPPC (Article 21 of the Commerce Code and Article 182,
section II of the Commercial Enterprises Act). Companies must present the
notice of liquidation to the tax authorities (Article 25, section X, Regulations
of the Federal Tax Code). Moreover, the notary public must present the infor-
mation to the tax authorities the public instruments that they draft (Article 27
of the Federal Tax Code), including the notice of liquidation.
National Registry of Foreign Investments
62. The Foreign Investment Act (Ley de Inversin Extranjera LIE)
requires that a Mexican legal entity with one or more owners who are resident
or non-resident foreigners, including Mexican companies with a majority of
29. Members, shareholders and limited partners of Mexican companies and part-
nerships who reside abroad are not themselves required to register with the
RFC, provided that the legal entity or a partner residing in Mexico within three
months after the end of the tax year provides the tax authorities with a list of
these owners indicating their address, tax residence and foreign tax identification
number (Art. 27(4) CFF).
foreign owners (Art. 2(II)(b) LIE) and citizens with dual citizenship who
reside abroad (Art. 32(I)(b)), must be registered with the National Registry of
Foreign Investments (Registro Nacional de Inversin Extranjera RNIE
30
)
(Art. 32). This registration has to be renewed annually (Art. 35). The regis-
tration has to include information on the foreign owners name, nationality
and domicile as well as the percentage of their participation (Art. 33(I)(d)).
Changes in ownership also have to be registered (Art. 33(3)) within 40 busi-
ness days from the date of the change (Art. 38(I)). In the case of a branch, the
foreign owner of that branch has to be registered.
Information provided to tax authorities
63. All types of companies and co-operatives have to register in the
RFC and provide information regarding their identity, address and their tax
status (Art. 27(1) CFF, in connection with Arts. 19 and 20 Federal Tax Code
Regulations (Reglamento del Cdigo Fiscal de la Federacin RCFF)).
When registering, the company must present the original copy of its charter,
thus providing information on the initial owners of the company. Subsequent
changes of ownership will not be registered with the RFC. However, such
information will normally be available in the shareholder register which com-
panies have to keep (see below) and to which the SAT has access.
64. Further, with the exception of publicly traded shares, Mexican tax
law requires that all shareholders and members of Mexican companies,
co-operatives and partnerships have to be registered as taxpayers with the
RFC (Art. 27(2) CFF) which will assign a unique Taxpayer Identification
Number (TIN) to each taxpayer. To ensure that this requirement is enforced
in practice, the notary public incorporating a company will inform the tax
authority on whether any of the founder shareholders does not have a TIN.
There are approximately one million persons registered with the tax authori-
ties as shareholders. This requirement does not apply in the case of foreign
owners of such entities, provided that the Mexican entity submits to the tax
authorities, three months following the closing of each fiscal year, form 157/
CFF
31
with a list of the non-resident partners, shareholders or members indi-
cating their domicile, tax residence and foreign tax identification number
(Art. 27(4)). Tax law does not require legal entities to provide ownership
information in tax returns.
30. Like the RPPC, the RNIE is administered by the Ministry for Economy (SE).
31. Form 157/CFF: List of partners, shareholders or partners abroad of legal persons
residing in Mexico who choose not to enrol in the RFC.
Information held by companies
65. Commercial legislation requires that all SAs and SCAs keep a share-
holder register which includes the name, nationality and address of each
shareholder as well as the number, series, classes and other characteristics
of the shares held by them (Art. 128 LGSM). According to Mexican law, all
the corporate and economic rights and obligations attached to a share in an
SA are held by the person who is registered as the owner in the shareholders
register (Arts. 111 and 129 LGSM). The company is required to register the
person who is presenting the title as shareholders (Art. 129(2)). It should also
be noted that the shares in an SCA may not be assigned without the consent
of all general partners and two thirds of the limited partners (Art. 209).
66. SdRLs are required to keep a members book and therein register the
names and addresses of all members (Art. 73(1) LGSM). Also, any change
of ownership requires approval of the majority of the shareholders (Art. 65).
67. Mexican tax law also includes a requirement to keep and update a
shareholders register. All companies, co-operatives and partnerships must
register the Federal Taxpayer Identification Number of each member and
shareholder in the ledger of members and shareholders (Art. 27(3) CFF)
or as mentioned above alternatively for non-resident owners annually
provide a list of such owners (Art. 27(4)). The provision further requires that
each member who attends an owners meeting has to be identified by the TIN
in the minutes of the meeting. The latter document has to be kept during
the existence of the entity and non-compliance with this requirement can be
sanctioned (see below).
68. Mexican tax legislation requires companies and co-operatives to
maintain during the existence of the company the articles of incorporation,
the partnership agreements and the minutes of meetings evidencing the
increase or decrease of the capital (Art. 30(3) CFF). They are further required
to issue and keep copies of certificates to the payees when distributing divi-
dends or profits (Art. 30(3) CFF, Art. 86(1)(XIV)(b) Income Tax Act LISR).
Further, every year, the entity has to submit the names, addresses and TIN
of all the persons to whom it made such distributions (Art. 86(1)(XIV)(c)).
Information held by directors and officers
69. It is the duty of the companys officers and managers to ensure that
the company complies with its obligation to maintain a shareholder register.
The managers of an SA, SCA and an SdRL are personally and jointly liable
for the existence and maintenance of the records and files that are required by
law (Arts. 158(3) and 73(2) LGSM). Therefore, directors and officers of such
companies will normally have access to ownership information.
Foreign companies
70. Mexican law recognises the legal status of foreign companies incor-
porated according to the laws of the jurisdiction where they are incorporated.
They have to be authorised and registered in order to undertake commer-
cial activities in Mexico through a branch (Art. 15 CCO). Registration of a
branch with the RPPC requires prior approval from the Ministry of Economy
(Secretara de Economa SE), in accordance with Articles 17 and 17-A of
the Foreign Investment Act (Ley de Inversin Extranjera LIE) (Art. 251(1)
LGSM). The Mexican authorities advise that both the foreign entity and
its non-Mexican owners have to be registered with the RNIE (Art. 32(II)
LIE). To obtain necessary authorisation and registration with the RNIE
and thereafter the RPPC, companies with branches in Mexico must provide
documentation identifying them and proving their existence according to
the laws of the jurisdiction where they are incorporated (Art. 21 RLIE).
Foreign companies with branches in Mexico also have to register with the
RFC (Art. 19(1) RCFF) and provide their tax identification number in their
jurisdiction of residence.
71. Foreign companies centrally managed and controlled in Mexico
are considered resident in Mexico for tax purposes, irrespective of whether
they have Mexican source income (Art. 9 II CFF). Pursuant to Article 6 of
the Regulations to the Federal Tax Code, a legal entity is deemed to have
established in Mexico the place of administration of its business or its head-
quarters on the basis of effective management, when the place where the
person or persons who take or carry out the decisions concerning control,
direction, operation, or management regarding (i) the legal entity or (ii) the
principle activities performed by such entity, is located within the Mexican
territory. A branch office alone would make the enterprise to become tax
resident, however. Foreign companies centrally managed and controlled
in Mexico are subject to the same requirements under Mexican tax law as
Mexican-incorporated tax-resident companies. Thus they are required to
maintain the articles of incorporation and minutes of meetings evidencing
the increase or decrease of the capital during the existence of the company
(Art. 30(3)). They are further subject to the requirement to keep and update
a shareholders register and to identify in the minutes of the meeting each
member (with his/her TIN) who attends an owners meeting (Art. 27(3) CFF).
They are also required to issue and keep a copy of certificates issued to the
payees when distributing dividends or profits (Art. 30(3) CFF and Art. 86(1)
(XIV)(b) LISR). Further, every year, the entity has to submit the names,
addresses and TINs of all the persons to which it made such distributions
(Art. 86(1)(XIV)(c) LISR).
Nominees
72. The Terms of Reference requires that jurisdictions ensure that infor-
mation is available to their competent authorities that identify the owners of
companies and any bodies corporate. Owners include legal owners, and, in
any case where a legal owner acts on behalf of another person as a nominee
or under a similar arrangement, that other person, as well as persons in an
ownership chain, to the extent that it is held by the jurisdictions authorities
or is within the possession or control of persons within the jurisdictions ter-
ritorial jurisdiction.
73. All the rights and obligations of a shareholder in a company are
assigned to the person who is registered as the shareholder (Art. 111 LGSM)
(Art. 129). This person is regarded as the owner for all corporate and eco-
nomic purposes. This includes tax obligations in respect of the assets.
74. There is an exception to this recognised in the Mexican system: for
publicly traded shares the intermediary (broker) will be registered as the
shareholder.
32
Only AML-regulated entities can act as such intermediaries.
Due to customer due diligence requirements in Mexican AML legislation
the intermediary has to keep information on the identity of the actual share-
holder. The SAT has the power to obtain that information either directly from
the company (Article 32-B, Section IV, first paragraph CFF) or through one
of the financial regulatory agencies (Art. 117(5) Credit Institutions Act (Ley
de Institucines de Crdito LIC)).
33
75. There is no provision in Mexican law that prohibits a person from
holding shares in a company in his or her name but on behalf of another
person based on a contractual arrangement. Mexican legislation recognises
the concept of mandate without representation (mandato sin representacin).
Under such an arrangement, a person (mandatary mandatario) can act in its
own name, e.g. buy shares in a company, on behalf of another person (prin-
cipal mandante) without revealing the existence of this relationship to the
company (Arts. 2554 and 2560 CCF). In a mandate without representation,
the principal will have no legal claims against any person other than the man-
datary (Art. 2561). The Mexican authorities emphasise that the mandatary has
all the rights and obligations of the owner, including tax obligations.
32. The shares have to be registered with the National Registry of Securities
(Registro Nacional de Valores) which is public and administered by the CNBV.
Their transfer is performed by institutions created for the custody of securi-
ties. Currently, the INDEVAL is the only entity authorised for carrying out this
activity.
33. National Banking and Securities Commission (CNBV), the National Commission
of the Retirement Saving System (CONSAR) and the National Insurances and
Bond Commission (CNSF).
76. A mandate is a bilateral agreement which must be in writing, signed
by the mandatary and principal, if the underlying transaction exceeds
MXN 2 991 (USD 224). It has to be given in a public deed or power of attor-
ney if the value of the underlying transaction is unlimited or if it exceeds
MXN 59 820 (USD 4488) or the underlying transaction itself requires a
public deed, i.e. the acquisition of real estate (Arts. 2555 and 2556 Federal
Civil Code). Under the Commercial Code and tax legislation, a mandatary
who is acting in a business capacity has to keep the agreement as an under-
lying document related to their accounting records and this information is
accessible to the tax administration. Further, the Mexican authorities advise
that irrespective of whether a mandatary is acting in a business capacity
34
or
not,
35
they have to keep such a contract for tax purposes. Further, if the man-
datary is an obliged entity under the AML legislation, they have to identify
their customers and their beneficial owners, as described below. Mexican
tax authorities emphasise that they have the power to require any manda-
tary, including e.g. a lawyer, to provide any information for purposes of the
exchange of information. Thus, any person acting as nominee would have to
disclose the identity of the person for whose account the shares are held. The
Mexican authorities advise that while mandates may be used frequently in
Mexican business, there are no statistics regarding the number of such con-
tracts in existence. However, the tax authorities have never received an EOI
request involving such a contract.
Information held by service providers AML legislation
77. Mexican AML legislation covers all the principal sub-sectors of the
financial system: Credit institutions and money exchange and transmitting
institutions (Art. 115(5) Credit Institutions Act, Arts. 87-D and 95-Bis of
the General Act on Auxiliary Credit Organizations and Activities); Savings
and popular credit entities (Art. 124 Savings and Popular Credit Act); finan-
cial leasing and factoring companies (Art. 95 Auxiliary Credit Activities
Act); brokerage firms (Art. 212(1)(III) Securities Market Act); Retirement
Funds (Art. 108Bis Retirement Savings Act); investment companies (Art. 91
Investment Companies Act); insurance institutions (Art. 40 Institutions
and Mutual Insurance Act); and bonding institutions (Art. 112 Bonding
Institutions Act).
78. The acts regulating the various, above mentioned entities within the
Mexican financial industry provide the legal basis on which the Ministry
34. The term business capacity refers to anyone who, according to commercial
law, professionally and habitually makes business transactions.
35. Commonly private individuals with mandates from family or close acquaintances.
of Finance established detailed administrative AML regulations
36
. The acts
require that the regulations have to include rules concerning obliged entities
obligations to:
request information to fully identify persons who seek to open
accounts or enter into contracts relating to operations and services; and
keep information and documentation regarding the identity of present
and former customers and users for at least ten years.
79. All of the regulations have the same basic structure but vary to some
degree in details and scope, depending on the types of institutions. Chapter II
(customer identification policy) and Chapter III (know-your-customer policy)
of the various Administrative AML Regulations establish relatively compre-
hensive CDD requirements for regulated entities that apply to both occasional
transactions and when business relationships are established. Some of the
regulations specifically distinguish between transactions with occasional cus-
tomers (where certain thresholds may apply) and business relations with other
customers. Regulated entities are required to perform CDD prior to opening
accounts, execution or completion of contracts or transactions of any type.
80. The regulations require regulated entities to establish procedures to
identify the effective (i.e. beneficial) owners who are understood to be those
persons who, through another person or by any act or mechanism, obtain the
benefits derived from an account, contract or operation and who ultimately
exercise the rights of use, benefit, or disposition of resources as the true
owners of such resources. It also comprises persons exercising control of a
legal person
37
, as well as the beneficiaries of a fideicomiso, the brokers of a
brokerage agreement and the agents of an agency agreement.
36. Individual regulations are established for credit institutions, SOFOLES (Limited
Purpose Finance Companies Sociedades Financieras de Objeto Limitado),
SOFOMES (Multiple Purpose Finance Companies Sociedades Financieras de
Objeto Mltiple), money exchange, exchange centers, money transmitters, sav-
ings and popular credit entities, general deposit warehouses, financial leasing,
factoring companies, brokerage firms, AFORES (Retirement funds management
companies Administradoras de Fondos para el Retiro), investment companies,
insurance companies and bonding institutions.
37. In general, according to Mexican AML legislation, control of a legal person
implies the ability of a person or group of persons, through ownership of securi-
ties, the conclusion of a contract or any other legal act, to (i) impose, directly or
indirectly, decisions in the general meeting of shareholders or partners or the
equivalent governing body of a legal entity, (ii) appoint or dismiss the majority
of the directors, managers or equivalents of a legal entity, (iii) maintain owner-
ship of rights to allow, directly or indirectly, to exercise a vote for more than
81. For the purposes of identification, financial institutions must request
identification information and documents regarding their customers and the
beneficial owners of these customers. Financial institutions are required to
open customer identification files before opening accounts or conducting
transactions. Where a customer or beneficial owner has to be identified,
the required pieces of information include name, address, TIN, nationality,
copies of passports/articles of incorporation, powers of attorney, etc. of the
persons and their representatives (Chapter II of the Regulations). The regu-
lated persons have to perform annual checks in order to make sure customer
identification documentation is up to date.
82. On 17 July 2013, Federal Law for the Prevention and Identification
of Transactions with Illicit Proceeds (LFPIORPI) entered into force. This
law extends the scope of Mexicos AML framework to cover profession-
als that carry out vulnerable activities, as defined in its Article 17. These
include provision of services performed by notaries public concerning the
establishment of legal entities, amendments to incorporation acts, increase or
decrease of capital, merger, split, or the sale of shares and partnership inter-
ests (LFPIORPI, Art. 17, XII, A, c)). The concept of vulnerable activities
also include the independent provision of professional services when the fol-
lowing operations are prepared for or are carried out on behalf of a customer:
(a) the sale and purchase of real estate or property rights transfer acts on such
assets; (b) the administration and management of resources, securities or
other assets of their clients; (c) the management of bank, savings or securi-
ties accounts; (d) the organisation of capital contributions or other resources
for the establishment, operation and management of corporations, or (e) the
establishment, split, merger, operation and management of corporations or
corporate vehicles, including fideicomisos and the purchase or sale of busi-
ness entities (LFPIORPI, Art. 17, XI).
83. The persons performing vulnerable activities are required to iden-
tify their customers and verify their identities based on credentials or official
documents and to obtain copies of those documents (LFPIORPI, Art. 18, I).
They are also required to inquire from their customers about the existence
of a beneficial owner and, where appropriate, to provide official documenta-
tion identifying such beneficial owner or if there is none, the customer is
required to make a statement in this regard (LFPIORPI, Art. 18, III).
84. The beneficial owner is understood as the controlling beneficiary
(Article 14, Regulations to the LFPIORPI). Pursuant to Article 3, section III,
of the LFPIORPI controlling beneficiary is the person or group of persons
who: (a) through another person or any act, obtains the benefit derived from
fifty percent of the capital stock of a legal entity, and (iv) conduct, directly or
indirectly, management, strategy and major policies of a legal entity.
them and, ultimately, exercises the rights of use, enjoyment, utilisation or dis-
posal of an asset or service, or (b) exercises control of the legal entity that, as
client or user, carries out acts or operations with whom performs vulnerable
activities, as well as the persons through which it undertakes them. A person
that exercises control include a person who (i) imposes, directly or indi-
rectly, decisions at general meetings of shareholders, partners or equivalent
bodies, or appoint or remove a majority of the directors, managers or their
equivalents; (ii) maintains ownership rights to allow, directly or indirectly, to
exercise the vote in respect of more than fifty percent of the share capital; or
(iii) direct, directly or indirectly, management, strategy and major policies of
the company.
85. The regulations to the LFPIORPI were issued on 1 September
2013. Following the regulations, the professionals performing vulnerable
activities were required to register with the Financial Investigation Unit
(FIU) of the Ministry of Finance and Public Credit from 31 October 2013 to
17 December 2013. The Mexican FIU estimates that approximately 320 000
professionals could be covered by the LFPIORPI. The FIU is planning to
issue best practices and other guidelines concerning the application of the
law in the different sections and further implement monitoring and enforce-
ment action.
Conclusion
86. Mexican commercial law and tax law ensures that information on
ownership of Mexican companies is available. All Mexican companies are
required by the Commercial Enterprises Act and the Federal Tax Code to
maintain a register with the names of all shareholders/members. It is the
responsibility of the companys officers that such registers are maintained.
This requirement is supplemented by incorporation and registration obliga-
tions on the companies.
87. Foreign companies centrally managed and controlled in Mexico are
considered resident in Mexico for tax purposes and are subject to the same
requirements under Mexican tax law as Mexican-incorporated companies.
Thus, such entities are subject to the requirement in Mexican tax law to keep
and update a shareholders register.
In practice
88. Updated ownership information of companies is filed with govern-
ment authorities in certain circumstances, as summarised below:
companies are required to file information on founders with the
Registrar (Public Registry of Property and Commerce). Changes in
ownership or increases of capital are not required to be filed with the
Registrar (unless in case where a company has a fixed capital and is
required to amend its articles of incorporation to increase its capital,
which is not a very common situation in Mexico);
companies that make distributions are required to submit to the tax
authorities on an annual basis the names, addresses and TINs of the
shareholders receiving the distributions;
companies must file with the tax authorities a list of all non-resident
shareholders, partners or members (indicating their domicile, tax
residence and foreign tax identification number) in case these persons
have not opted to have a Mexican TIN;
if a shareholder that is tax resident in Mexico sells the shares it holds
and wishes to deduct losses derived from the sales of the shares,
the seller and the buyer must file a notice with the tax authorities
within ten working days after the sale of shares (LISR, Article 31,
section VIII);
in case of non-resident shareholders that sell the shares they hold in a
Mexican company, they will be able to benefit from deduction rules
under certain conditions if they inform a registered public account-
ant in Mexico who will, in turn, file a notice with the Mexican tax
authorities within ten working days after the sale of shares.
38
89. Updated ownership information is also required to be available with
the companies themselves (CFF, Art. 27(3) and 28).
90. It is also noted that, with the exception of publicly traded shares,
Mexican tax law requires that all shareholders and members of Mexican
companies, co-operatives and partnerships have a TIN. However, there is
no requirement that such shareholders/members inform the tax authority
about which companies they are shareholders of (or whether they are no
longer shareholders). Once a TIN is obtained, no update needs to be done if
the condition of the shareholder has changed (i.e. the person does not need
to inform the tax authority if he/she is no longer a shareholder, if he/she
38. Pursuant to Article 190 of the LISR, foreign resident shareholders selling shares
representing, for Mexican tax purposes, the property of goods in Mexican
entities or in relation to any entity whose share value is mainly derived assets
located in Mexico, are, as a general rule, subject to income tax at a rate of 25%
over the total amount of the sale without any deduction. However, if the foreign
resident seller has a representative in Mexico and submit the sale transaction to
a registered public accountant in Mexico (who will in turn file a notice to the tax
authority), he or she will be entitled to be taxed at the net gain from the sale of
shares.
increases his/her shareholding, or if he/she becomes a shareholder in another
company. Companies themselves are not required to file updated ownership
information in their tax returns. Companies must include a reference to the
shareholders TIN in the book of shareholders; therefore, the tax authorities
can have access to this book during an audit and check whether shareholders/
companies complied with their obligations.
91. Mexico reports that ownership information is often reviewed in the
course of a tax audit following a risk assessment framework. Mexico con-
ducts approximately 90 000-100 000 audits a year, covering approximately
0.9% of Mexicos taxpayers subject to the obligation to file tax returns
during the period under review (more details on the auditing function on
section A.1.6 of this report). Most of these audits are performed on corporate
taxpayers.
92. During the period under review, Mexico had no problems to secure
company ownership information for EOI purposes. Mexico received 74 EOI
requests which contained 91 inquiries for ownership information during years
2010-12 (26 in 2010, 21 in 2011 and 44 in 2012). The information requested
included copies of articles of incorporation/ by-laws, list of shareholders and
members, information concerning the amount of participation of a certain
shareholder in a Mexican legal entity and property deeds.
93. In order to answer the EOI requests, the EOI team would first consult
the SAT databases and the RNPC to further identify the company (i.e. con-
firm the name and address). Subsequently, the EOI team would contact the
relevant company.
94. In some cases, requests were made in respect of entities that were
not in fact created or resident in Mexico. The competent authority has, in
all cases, conducted full searches in the tax databases as well as databases
maintained by other government authorities, as well as investigations in
other sources of information. It appears that in those cases the legal enti-
ties and individuals involved were not residents/taxpayers in Mexico or that
potentially, the identification information provided by the foreign competent
authority was not accurate/ complete (see more details in section B.1.1). In
one case Mexico conducted searches in the SAT database, the commercial
registrar, the presence of the companys legal representative in Mexico and
the EOI team has also visited the address provided by the foreign authority,
having found address a long-time established telecommunications company
(not the foreign company that was the subject of the request).
95. Peer input from Mexicos EOI partners confirmed that full answers
have been received in all cases and that partners are satisfied with their
quality.
Bearer shares (ToR A.1.2)
96. Mexican law does not allow the issuance of bearer shares. The shares
of an SA, an SdRL or an SCA are represented by nominative, enforceable
certificates that evidence and transfer the status and rights of shareholders.
Mexican legislation specifically states that shares of an SA and an SCA have
to be nominal shares (Arts. 111, 125 and 208 LGSM). It also states that shares
of an SdRL may not be represented by negotiable nominative nor bearer
instruments (Art. 58 LGSM). Further, certificates representing the shares of
members of a co-operative have to be nominative (Art. 50 LGSC).
97. No issues concerning bearer shares have been raised by Mexicos
EOI partners in their peer input.
Partnerships (ToR A.1.3)
98. Mexico has ordinary (civil), general and limited partnerships and so-
called Non-Incorporated Joint Ventures:
ordinary partnership (Sociedad Civil SC)
39
: An SC is formed
pursuant to an agreement between two or more persons to combine
resources and efforts to attain a common goal. An SC cannot run a
business. Managing partners are jointly and personally liable for the
obligations and debts of the partnership. Other members are liable up
to the amount of their contribution, unless otherwise agreed. In prac-
tice the SC is very common (there were 143 689 as at 13 September
2013
40
) and is used for non-profit entities and professional practition-
ers such as lawyers;
general partnership (Sociedad en Nombre Colectivo SNC)
41
: An
SNC is an entity that exists under a business name and in which
all partners are jointly and severally liable, without limitation, for
the entitys obligations even if they agreed to limit the liability to a
certain portion or fee among themselves. However, the partners may
agree amongst themselves that the liability of one or more of them
will be limited to a certain portion or fee. There were 391 SNCs as at
13 September 2013;
limited partnership (Sociedad en Comandita Simple SCS)
42
: An
SCS exists under a business name with one or more general partners
39. Arts. 2688 2735 CFF.
40. Source: Mexican authorities based on registration in the Federal Register for
Taxpayers (RFC).
41. Arts. 25 50 LGSM.
42. Arts. 51 57 LGSM.
who are jointly and severally liable for the entitys obligations and
one or more limited partners who are only liable up to the value of
their agreed contribution. There were 310 SCSs as at 13 September
2013; and
non-Incorporated Joint Ventures (Asociacin en Participacin
AP)
43
: APs share many characteristics of a silent partnership and are
the second most common type of partnerships for business purposes
(there were 2 372 as at 13 September 2013). They are a contractual
agreement whereby a person grants others, who contribute assets
or services, participation in the profits and losses of a commercial
enterprise or operations. The agreement must be in writing but is not
subject to registration. Under commercial law, activities are carried out
in the name of the active partner who is personally liable for the debts
of the joint venture, whereas the contributing partners are liable only
to the extent of their contributions. APs have neither legal status nor a
corporate or business name. However, an AP is treated as an entity for
tax purposes and taxed, like a company, separately from its partners.
99. Contrary to many other jurisdictions, none of the above mentioned
entities are transparent and they are generally taxed in the same way as com-
panies. Therefore, most of the legal framework applicable to companies also
applies to partnerships. Further, Mexican branches and permanent establish-
ments of foreign partnerships are subject to the same requirements regarding
availability of information and taxation as those of foreign companies with
a Mexican branch. Also, non-resident partners of Mexican partnerships are
subject to the same requirements as non-resident members and shareholders
of Mexican companies, i.e. they have to be registered with the RNIE.
Information provided to government authorities
Incorporation and registration
100. For all Mexican partnerships other than ordinary partnerships and
non-incorporated joint ventures (APs), the following incorporation and regis-
tration rules apply (the same as described above for companies):
a request has to be made to the SRE for authorisation to use the name
chosen and the SRE will examine if any intended participation of
foreign capital is within the limits of the law;
a charter has to be established including a partnership agreement which
contains identity information on the founding partners (including their
name, nationality and domicile as well as the amount or percentage of
43. Arts. 252 259 LGSM.
their interest in the partnership), members of the board of directors or
the sole administrator of the entity, its principal officers, the statutory
auditor and its domicile;
the charter and subsequent changes to it have to be presented to a
notary who issues a public deed attesting the charter of the entity.
The notary has to verify the identities of the partners and assure that
they are registered as taxpayers with the RFC;
the charter, including the partnership agreement, must be submitted
to the RPPC at the place of its domicile; and
if the partnership has foreign partners, these partners (founding or
subsequent) have to be registered with the RNIE and provide name,
nationality and domicile as well as the percentage of their participation.
101. The above requirements ensure that the founding partners of a
partnership, other than an ordinary partnership, are held by the notary (or
the AGN) and the RPPC. Further, transfer of ownership in a general or lim-
ited partnership requires the consent of at least a majority of the partners
(Arts. 31 and 57 LGSM). With regard to changes in ownership, each partners
liability for the partnerships debts prima facie depends on the information
registered in the RPPC. Mexican authorities advise that this and the fact that
partnerships are based on the personality of the parties (intuitu personae
characteristic of partnerships) implies not only a requirement to produce
a record of transfer of ownership that has to be kept by the entity but also
a legal requirement and an incentive to amend the partnership agreement
which has to be notarised and then registered with the RPPC as the partner-
ship agreement is a fact that has to be registered in the RPPC according to
Article 21(V) of the CCO.
44
Thus, information on subsequent owners of such
partnerships will also be held by the notaries and the RPPC.
102. Ordinary partnerships are not incorporated unless their partner-
ship agreement is registered in the Civil Societies Registry (Registro
de Sociedades Civiles RSC)
45
(Art. 2694 CCF). The agreement has to
include the names of the partners (Art. 2693(I)). As for other partnerships,
the Mexican authorities advise that ordinary partnerships are based on the
personality of the parties. Therefore, a change of members is considered a
modification of the partnership agreement which also has to be registered in
the RSC.
44. This article requires the registration of public instruments that state the constitu-
tion of commercial entities as well as their transformation, merger, dissolution or
liquidation.
45. The RSC is a section of the Public Registry of Property which again is a part of
the PRPC.
103. The retention period for information provided to and produced by the
notary and the RPPC is the same as described above for companies, i.e. such
information is in principle kept indefinitely.
104. Since an AP (non-incorporated joint-venture) is not a legal entity
but a contractual agreement where the active partner acts in its own name, it
is not subject to registration with the RPPC. Nevertheless, such an entity is
otherwise subject to the same requirements as other commercial legal enti-
ties to register with the RFC as a taxpayer and keep a list of partners with
the Mexican TIN or, for foreign partners, alternatively submit a list of such
partners to the tax administration. Also, foreign partners have to register
with RNIE. Further, partnership agreements have to be kept by the partners
as long as the AP exists (see obligations to maintain information accord-
ing to tax law and commercial law below) and can be requested by the tax
administration.
Tax authorities
105. Partnerships are not transparent for tax purposes: they are taxed like
companies (Art. 8 LISR) and are therefore subject to mainly the same tax
rules as companies.
46
Thus, the requirements described earlier in this report
with respect to registration with the RFC and registration of the partners as
taxpayers, as well as the annual requirement to file third-party information to
the SAT identifying owners when distributing profits to them, for companies
apply mutatis mutandis to partnerships. All partnerships are required to reg-
ister in the RFC and provide information regarding their identity, address and
their tax status (Art. 27(1) CFF in connection with Arts. 19 and 20 RCFF).
When registering, the partnership must present the partnership agreement,
thus providing information on initial partners. Subsequent changes of owner-
ship will normally not be registered with the RFC.
Information held by partnerships and by partners
106. Commercial law does not require partnerships to keep a register of
the partners. However, as for companies and co-operatives, there is a require-
ment in Mexican tax law to keep a ledger of members which includes the
TIN of each partner (Art. 27(3) CFF). As is the case for companies, instead
of registering non-resident partners with the RFC and including the Mexican
TIN in the ledger of partners, partnerships can alternatively submit annu-
ally a list of such partners to the tax administration (Art. 27(4)).Tax law
also requires partnerships, during their existence, to keep the partnership
46. Payments to the partners are taxed as dividends with the exception of such pay-
ments from an ordinary partnership which are treated as deductible salaries.
agreements, the minutes of meetings evidencing the increase or decrease
in the capital and certificates issued regarding distribution of dividends or
profits (Art. 30(3)).
107. The general partners of a partnership are responsible for the manage-
ment of the partnership and are severally and jointly liable for damage caused
by any non-compliance with the above requirements (Art. 2(5) LGSM). They
will therefore normally make sure that documents required by law, such
as partnership agreements including the names of all current partners, are
available.
Information held by service providers
108. Entities in the financial industry
47
providing services to partnerships
are subject to the same AML requirements as described above for entities
providing services to companies. As a result, whenever a partnership is a
customer of a financial institution in Mexico, the institution will identify not
only the person acting for the partnership but also the partnership itself and
its partners.
Foreign partnerships
109. Foreign partnerships with a branch in Mexico are subject to the same
obligations as foreign companies with a Mexican branch (described previ-
ously). Thus they have to:
obtain authorisation by the SE and registered with RPPC in order to
undertake commercial activities in Mexico through a branch;
register with the RNIE and hereby provide documentation identify-
ing them and proving their existence according to the laws of the
jurisdiction where they are incorporated;
register with the RFC and provide their tax identification number in
their jurisdiction of residence;
if they are centrally managed and controlled in Mexico then they are
considered resident for tax purposes and subject to the same require-
ments under Mexican tax law as Mexican-incorporated partnerships,
including the requirement to
- keep a ledger of members (including the Mexican TIN of all
partners or alternatively submit a list of partners annually to the
tax administration);
47. See section A.1.1 Information held by service providers AML legislation for an
overview of the types of regulated entities.
- identify in the minutes of the meeting each partner who attends
an owners meeting;
- issue and keep a copy of certificates issued to the payees when
distributing profits and submit the names, addresses and TINs
of all the persons to which it made such distributions to the tax
administration; and
- maintain the articles of incorporation and minutes of meetings
evidencing the increase or decrease of the capital during the
existence of the partnership.
Conclusion
110. Mexican commercial law and tax law as well as foreign investment
legislation ensure that up-to-date ownership information is available for all
types of partnerships. Partnerships have to submit ownership information
to the Commercial Register as well as the tax authorities and keep a list of
partners. Further, foreign partners have to register with National Registry of
Foreign Investments.
In practice
111. During the period under review, Mexico has no inquiries for owner-
ship information of partnerships.
112. In practice, with regard to changes in ownership, each partners
liability for the partnerships debts prima facie depends on the information
registered in the RPPC. Mexican authorities advise that this and the fact that
partnerships are based on the personality of the parties (intuitu personae
characteristic of partnerships) implies not only a requirement to produce a
record of transfer of ownership that has to be kept by the entity but also a
legal requirement and an incentive to amend the partnership agreement which
has to be notarised and then registered with the RPPC.
113. The identity of partners would normally be checked in the course of
a tax audit. Mexico conducts approximately 90 000 to 100 000 audits a year,
covering around 0.9% of Mexicos total taxpayers (see section A.1.6 for more
details).
Trusts (ToR A.1.4)
114. Mexico does not recognise the concept of a common law trust.
However, Mexican law does not prohibit a resident from acting as a trustee
or trust administrator for a foreign trust. Further, Mexican law recognises an
institute similar to common law trusts in the form of the fideicomiso
48
. Such
an arrangement is regulated under the Negotiable Instruments and Credit
Transactions Act (Ley General de Ttulos y Operaciones de Crdito LGTOC).
Fideicomiso
115. In a fideicomiso, the fideicomitente (settlor) transfers to a fiduciaria
(trustee) property or title to assets for a defined purpose. A fideicomiso is
generally considered to be a contractual arrangement. The Mexican Supreme
Court of Justice has recognised that the fideicomiso is a legal transaction,
in which the fideicomitente constitutes an autonomous patrimony which is
separated from the assets of the parties involved in the transaction (Supreme
Court Decision 769/84). They do not need to be registered in any public reg-
istry with the exception of the taxpayers register (see below) and the RPPC in
the case of a real estate fideicomiso. The purpose may benefit a named third
party (fideicomisario) (Art. 381 LGTOC) which may be appointed prior or
after the establishment of the fideicomiso (Art. 382(2)).
116. Only the following, highly regulated, financial institutions can act
as a fiduciaria: credit institutions, brokers, insurance companies, bail bond
institutions, multiple-purpose financial companies, general deposit ware-
houses (Art. 395 LGTOC). As at 13 September 2013 there were a total of
1 366 entities authorised to act as fiduciaria
49
.
Information filed with tax authorities
117. Every year a fideicomiso receives any kind of income, the fiduciaria
is required to submit to the SAT a tax return which includes the following
information: the names, domiciles, and countries of residence for tax purposes
of the settlors and beneficiaries and, if applicable, their TIN (Art. 32-B(VIII)
CFF). Where a fideicomiso generates business income, the fiduciaria is
required to comply with more comprehensive regulations similar to those
imposed on companies and partnerships (Art. 13 LISR). No tax return has to
be filed for some types of fideicomisos such as those where profits only can
be used to finance officially recognised studies that would lead to a university
degree for a descendant in a direct line of the settlor, non-profit organisations
or fideicomisos issuing participation certificates publicly placed on the stock
market; (regulation I.2.1.13 of the administrative 2011 Miscellaneous Tax
Regulations Resolucin Miscelnea Fiscal 2011 RMF 2011).
48. This report uses Spanish terms for trust and involved persons when referring to
Mexican fideicomisos and English terms when referring to foreign trusts in order
to separate between these two entities.
49. Source: National Banking and Securities Commission (CNBV).
118. Mexican tax law requires a fiduciaria to register the fideicomiso
with the RFC if they are involved in business activities or for non-business
fideicomisos when they have generated income (Arts. 27 CFF, 19(X) RCFF
and regulation I.2.4.5 RMF 2011). The Mexican authorities have indicated
that all non-business fideicomisos will generate income and thus will have
to be registered. As at 13 September 2013, there were 1 923 non-government
fideicomisos registered with the RFC. The following information has to be
provided when registering (see Form R-1/R1P1A03):
identification information of the fiduciaria (including TIN);
the name of the fideicomiso; and
the fideicomiso agreement with the name and signature of the fide-
icomitente, the fideicomisarios and any legal representatives, as well
as the legal representative of the fiduciaria.
119. It is the fiduciaria who has to comply with obligations under
Mexican tax law, including (for business fideicomisos) regular payments of
estimated tax (Art. 13 LISR). However, the trust is not a taxable entity, it is
the fideicomisarios who have to include in their tax return their share of the
fideicomiso income as gross income. The fideicomiso will carry forward
losses from a business fideicomiso and deduct them from future income
accrued by the fideicomiso, i.e. losses may not be deducted from profits other
than those obtained by the fideicomiso. The fideicomisarios get credits for
taxes paid by the fiduciaria (Art. 13 LISR). Non-residents being fideicomisa-
rios of a fideicomiso engaged in business activities, will be deemed to have a
permanent establishment in Mexico. Therefore, they shall comply with all tax
obligations applicable to residents (though only for the income attributed to
the PE). Whenever it is not possible to identify the fideicomisarios of a given
fideicomiso, tax law will attribute the business activities to the fideicomitente.
The fideicomisarios and the fideicomitente may be severally liable for the
fiduciarias non-compliance.
Public registries and notaries
120. Where the asset of a fideicomiso is real estate, the fiduciaria is reg-
istered as the owner in the property part of the RPPC at the place where the
real estate is located (Art. 388 LGTOC). No information needs to be provided
as part of this registration with respect to the identity of the fideicomitente
or fideicomisario(s). However, the fact that the asset is held as part of a fide-
icomiso is registered.
121. Fideicomisos where non-Mexican entities or Mexican nationals who
possess another nationality and reside abroad have rights, are required to
register with the RNIE (Art. 32(III) LIE). When registering, the following
information is required: description of the fideicomisos purpose; identity of
the fideicomitente and the fideicomisario(s); origin, value and general char-
acteristics of the investment made in Mexico (Arts. 32 and 33 LIE and Art. 9
LIE Regulation).
122. Upon creating a fideicomiso before a notary public, the said notary
is required to maintain any related information for a term of five years after
such records are closed, and thereafter, said information is remitted to the
General Notarial Archive for safekeeping and custody (Art. 95 LNDF).
Information held by trustees and service providers
123. The fideicomiso agreement has to be in writing (Art. 387 LGTOC).
Mexican authorities advise that the identity of the contracting parties and
the fideicomisarios (if defined when establishing the contract) are essential
elements of such a contract and the fideicomitente and fideicomisario will
therefore in such cases be sufficiently identified in the document. Also, the
fideicomiso agreement has to be amended in cases where the fideicomisa-
rio is changed or added after the establishing of the fideicomiso. As tax
law requires the fiduciaria to keep the agreement and other documentation
regarding the creation and purpose of the fideicomiso (Art. 30(1) and (3)
CFF), the fiduciaria will be in the possession of identity information regard-
ing fideicomitente and fideicomisario.
124. Further, AML legislation requires entities within the financial
industry
50
which provide services to fideicomisos to sufficiently identify fide-
icomitente and fideicomisarios (see e.g. s. 12 Credit Institutions Regulations)
in line with the CDD requirements described in the companies section of
this report.
Foreign trusts
125. As mentioned above, Mexico does not recognise the concept of a
common law trust and has not signed the Convention on the Law Applicable
to Trusts and on their Recognition. However, Mexican law does not prohibit
a resident from acting as a trustee or trust administrator for a foreign trust.
There are no requirements regarding form or registration pertaining to
Mexican trustees acting on behalf of foreign trusts. Nor are there require-
ments to involve notaries in such activities.
126. There is no requirement in Mexican tax law that a trustee of a for-
eign trust has to provide information regarding trust assets or income from
such assets in the tax return. However, if questioned by the tax authorities,
50. See types of regulated entities listed under Companies earlier in this report.
a trustee of a foreign trust would have to prove that the trust assets are held
in trust to prevent being taxed on its income as its owner. Tax obligations
would arise based on Mexican tax law which requires all Mexican residents
(individuals and legal entities) to pay income tax on all their income, regard-
less of the location of the source of wealth of such income (Art. 1(1) LISR).
No distinction is made between a taxpayers income derived from his own
assets and those of the foreign trust, unless the trustee proves that the assets
are held and income received on behalf of the foreign trust. The Mexican
authorities advise that in order to prove the latter, the trustee would have to
provide contracts (trust deed), bank accounts and accounting records. Thus,
the identity of the settlor and the beneficiary would have to be provided as the
aforementioned documents would include this information.
127. Mexican AML legislation requires entities in the financial industry
that provide services to foreign trusts to sufficiently identify fideicom-
itente/settlor(s) and beneficiaries of the trust. Moreover, since 17 July 2013,
Federal Law for the Prevention and Identification of Transactions with Illicit
Proceeds (LFPIORPI) broaden the scope of Mexicos AML framework
to cover a number of professionals that carry out vulnerable activities, as
defined in its Article 17. These include the independent provision of profes-
sional services including the administration and management of resources,
securities or other assets of their clients; and the management of bank, sav-
ings or securities accounts (LFPIORPI, Art. 17, XI, b) and c)). The activities
performed by a Mexican resident acting as trustee of a foreign trust on a pro-
fessional basis involve the holding and management of assets of other persons
and therefore would be covered by the LFPIORPI. Pursuant to the General
Law of Professions, professional practice should be understood as any act
rendered in a usual manner regardless if fees are charged or not (Article 40).
As a result, persons that perform the management of resources on behalf of a
client are subject to the LFPIORP if they perform those activities in a usual
basis even if they do not change for their services.
128. The professionals performing vulnerable activities are required
to identify their customers and verify their identities based on credentials
or official documents and to obtain copies of those documents (LFPIORPI,
Art. 18, I). They are also required to inquire from their customers about the
existence of a beneficial owner and, where appropriate, to provide official
documentation identifying such beneficial owner or if there is none, the
customer is required to make a statement in this regard (LFPIORPI, Art. 18,
III).
129. The regulations to the LFPIORPI were issued on 1 September 2013.
Following the regulations, the professionals performing vulnerable activi-
ties were required to register with the Financial Investigation Unit (FIU)
from 31 October 2013 to 17 December 2013. The Mexican FIU estimate that
approximately 320 000 professionals could be covered by the LFPIORPI.
Subsequently to the registration, the FIU is going to issue best practices and
other guidelines concerning the application of the law in the different sections
and further implement monitoring and enforcement action.
130. The Mexican tax authorities advise that they are aware of only a few
cases where Mexican residents act as trustees of foreign trusts. Though, no
statistics exist. Mexican authorities have never received an EOI request with
regards of such a trust. Moreover, the Mexican competent authority consulted
other departments of the SAT as well as the AML authorities and these
authorities reported having encountered no professional trustees residing in
Mexico in the course of their work during the period under review.
Conclusion and Practice
131. Mexican fideicomiso, AML and tax legislation assures that relevant
information is available to identify the fiduciaria, fideicomitente and fideico-
misarios of a Mexican fideicomiso. Moreover, Mexico has taken reasonable
measures to ensure the availability of information identifying the settlors,
trustees and beneficiaries of foreign trusts which are administered in Mexico
or in respect of which a trustee is resident in Mexico. Mexico has a worldwide
tax system that would ultimately require a resident trustee or administrator of
a foreign trust to provide information regarding trust assets or income from
such assets. The tax requirements, coupled with the AML requirements,
ensure that information identifying the settlors, trustees and beneficiaries of
foreign trusts with Mexican resident trustees or administrators is available
in Mexico.
In practice
Fideicomisos
132. Fideicomiso is a very common legal arrangement in Mexico and it is
used to hold a variety of assets, including real estate. During the period under
review, Mexico has received inquiries for ownership information of provided
ownership information concerning real estate owned through a fideicomisos
created under Article 27 of the Mexican Constitution.
133. Under the Mexican Constitution, foreign individuals and entities may
not hold direct title to real estate in Mexico located within 100 kilometres
of the borders or 50 kilometres from the coastline. However, such individu-
als and entities may hold the beneficial interest in such real estate through
a fideicomiso. The Secretary of Foreign Relations/Director for Permissions
in terms of Article 27 of the Constitution is the authority empowered to
authorise the constitution and modifications of border/coastline real estate
fideicomisos. There are currently approximately 41 000 of such real state
fideicomisos on the Mexican borders/ coastlines where the settlor/ benefi-
ciaries are foreigners. As mentioned earlier in this section, fideicomisos in
Mexico have a maximum duration of 50 years (which can be extended) and
the trustee thereof must be a Mexican bank.
134. The requests received by Mexico during the review period would
usually refer to whether the taxpayers under investigation own any real estate
in Mexico. During the period under review, Mexico received 10 requests that
had a real estate fideicomiso involved. In order to reply to such requests, the
Mexican competent authority not only confirm whether any real estate is
owned directly by the taxpayer with the land registry but it also requests the
assistance of the Secretary of Foreign Relations/Director for Permissions in
terms of Article 27 of the Constitution to confirm if the given taxpayer is a
party in a real estate fideicomiso. The ownership of fideicomisos is gener-
ally considered confidential information; however, the Mexican competent
authority can access it via the Secretary of Foreign Relations/Director for
Permissions in terms of Article 27 of the Constitution.
135. Mexico reports having had no issues in securing ownership informa-
tion of fideicomisos. It reports that it commonly exchanges information on
borders/coastlines real estate fideicomisos. All banks acquiring real estate in
restricted areas (borders and coastlines) oin behalf of foreign beneficiaries
must obtain a permit from the Secretary of Foreign Relations. Information
on settlor and beneficiaries, including their names and nationality, of all bor-
ders/ coastlines real estate fideicomisos set by foreigners must be provided
by banks (fiduciarias) to the Secretary of Foreign Relations (Article 9 of
the Regulations on the Foreign Investment Law). The Secretary of Foreign
Relations maintains an electronic database where it is possible to search for
the name of any foreign national that is either a settlor or a beneficiary of a
property held though a fideicomiso. Mexicos competent authority can secure
all information on fideicomisos from the Secretary of Foreign Relations
and reports that there has been no problem to do so in practice. Moreover,
Mexicos competent authority can also secure information on the benefi-
cial owners of fideicomisos. As noted earlier in this section, only financial
institutions can act as a fiduciaria (trustee), which are subject to the AML
legislation and, as such, required to identify the beneficial owners of their
customers.
Foreign Trusts
136. Mexicos competent authority reports and the peer input confirm that
there have been no requests related to foreign trusts with Mexico trustees or
administrators. Since Mexican law already provides for a specific institute
to deal with the situation where assets are held on a fiduciary basis (the
fideicomiso), foreign trusts are not commonly used in Mexico. The potential
adverse tax consequences under Mexico worldwide income tax system for the
beneficiaries of the trust and the lack of a specific legal framework recog-
nizing foreign trusts may also hinder the development of a trust business in
Mexico. In practice, the tax authorities have never come across the situation
of a Mexican trustee of a foreign trust, either in its domestic work or in rela-
tion to exchange of information.
Foundations (ToR A.1.5)
137. Mexican legislation does not recognise foundations equal to the ones
that can be found in some European civil law jurisdictions. However, there
are two types of legal entities that are often referred to as foundations, see
next section of this report.
Other entities and arrangements
138. As mentioned above, there are two types of legal entities in Mexico
that are often referred to as foundations, though they are not entities in the
sense of foundations found in some European civil law jurisdictions: Civil
Associations (asociacines civiles ACs) formed by two or more individuals
to fulfil a common non-profit purpose and Private Assistance Institutions
(institucines de asistencia privada IAPs) established for social and
humanitarian assistance. Mexican legislation requires registration and tax
controls for such entities. ACs and IAPs cannot carry on activities for profit.
They have to be registered with the RPPC or a supervisory body respectively.
As legal entities, they are required to be registered with the Federal Register
for Taxpayers (RFC) and thereby provide information regarding their identity
(including a copy of their notarised charter which has to contain the names of
the founding members). Tax law further requires them to retain and maintain
their charter and statutes. The tax authorities have the necessary powers to
request information on members and beneficiaries.
139. As at 13 September 2013, there were 169 057 ACs and 1 667 IAPs in
Mexico. ACs and IAPs are supervised and monitored by specific supervisory
bodies depending on their purposes. In Mexico, there are federal and local
authorities that function as supervisory bodies of ACs and IAPs. At federal
level such authority is the Commission for the Promotion of Organization
Activities of Civil Societies. At local level, for instance, there is the Secretary
for Social Development in the Federal District.
140. The tax authorities maintain a register and directory of entities
authorised to receive deductible donations, and these organisations should
inform the tax authorities of the following changes within ten days after the
date on which the change took place (Miscellaneous Tax Regulations 2014,
rule I.3.9.2): (i) offices, (ii) corporate name (iii) TIN, (iv) merger, (v) extinc-
tion, (vi) liquidation or dissolution, (vii) changes to statutes or other
requirements that may have been considered for granting authorisation to
receive deductible donations, (vii) legal representative. In addition, when
such entities receive funds provided by the Mexican federal government,
states and municipalities, they are obliged to provide any information that is
requested from them by relevant authorities in relation to their object, stat-
utes, programmes, activities, beneficiaries, origin of domestic and foreign
financing, assets, administrative and financial operations, and to notify the
Federal Register of Civil Society Organizations of any amendments made
to their charter, and the changes in their governing bodies, management and
representation within a period of forty-five working days from the respective
modification.
141. During the period under review, Mexico has not received requests for
ownership information in relation to ACs and IAPs.
Enforcement provisions to ensure availability of information
(ToR A.1.6)
Information held by the entity
142. Mexican commercial legislation does not include sanctions for not
maintaining required ownership information. However, in the case of a public
or private limited liability company, it is the duty of the companys officers
and managers to ensure that the company complies with all requirements to
keep registers. They are personally and jointly liable for damages caused by
non-compliance with the requirement to keep such registers (Arts. 158(3)
and 73(2) LGSM). Further, non-compliance with obligations to keep relevant
ownership information for commercial entities can be sanctioned under
Mexican tax law, see below.
143. During the period under review, there have three claims litigated
concerning the liability of companys officers and managers for the failure to
keep registers. Two claims were considered by the courts to be unsubstanti-
ated and one case is pending in court. In practice, it appears uncommon that
companies officers and managers are held personally and jointly liable for
damages caused by non-compliance with the requirement to keep registers.
144. Failure to correctly register the TIN of every partner or shareholder
in the ledger of shareholders and partners (Art. 27(3) CFF) of a company, co-
operative or partnership can be sanctioned with a fine between MXN 13 650
and 27 300 (USD 1024 and 2 408) (Art. 7(VII) and 80(VI)). Mexican authori-
ties advise that this sanction also applies if the owners are not registered at
all. Further, this sanction applies in cases where the entity neither registers
non-resident owners TIN in the ledger of owners nor submits a list of such
owners. Separate statistics concerning the application of the above-mentioned
fines were not available. Those penalties are applied when non-compliance
is identified in the context of tax audits (statistics on tax audits are included
later in this section).
145. Non-compliance with AML requirements to record all transactions
with customers can be sanctioned with fines, closure of establishments
and criminal charges, according to the acts regulating the various types of
entities within the financial industry. In the case of credit institutions and
SOFOLES for instance, such fines can vary between MXN 62 330
51
and
311 650 (USD 4 676 to 23 380) (s. 66 Credit Institutions Regulations and
Article 58 of General Provisions referred to in Art. 115 Credit Institutions
Act, applicable to financial companies with limited scope, in relation with
Art. 108(II)(e) LIC).
146. The CNBV maintains statistics on the inspections carried out in
financial institutions concerning the compliance with AML requirements.
Detailed statistics concerning customer due diligence in isolation are not
available. The table below shows the total number of inspections and penal-
ties imposed during years 2011 and 2012:
Year Number of AML inspections Amount of AML penalties imposed
2011 34 USD 27.2 million
2012 34 USD 1.6 million
147. In 2011, one financial institution received a penalty of approximately
USD 26.4 million for non-compliance with AML regulations. In that case,
several breaches of the applicable AML regulations were identified, including
deficiencies in customer identification, customer due diligence, maintenance
of records, automated systems, reporting of suspicious transactions, training
and internal structures. Fines for each specific violation were applied, result-
ing in the high amount of the penalty applied. That penalty alone represented
97% of the total penalties imposed in that year. The penalty was paid by the
financial institution in year 2012.
148. Pursuant to the LFPIORPI, if the persons carrying out Vulnerable
Activities fail to perform customer due diligence in terms of Article 18
of the law, they will be subject, upon conviction, to a fine in the amount
equivalent to 200 and up to 2 000 days of the daily minimum wage applica-
ble in Mexicos Federal District (Arts. 53 and 54). The daily minimum wage
51. In some laws, Mexican fines are defined as a multiple of days of minimum wage
(DSM). Currently a DSM amounts to MXN 62.33 (USD 4.67).
in Mexicos Federal District is currently MXN 63.33 (USD 4.67); there-
fore the fine would range from MXN 12 466 (USD 935) to MXN 124 660
(USD 9 352). Since the law was recently enacted, this penalty has not yet
been applied in practice.
Registration with public registers
149. There are no penalties for non-compliance with requirements to reg-
ister with and submit information to the RPPC. However, representatives or
agents of a commercial enterprise not properly registered in the RPPC, are
severally and jointly liable for any damage caused by this non-compliance
(Art. 2(5) LGSM). After consultation with the Mexican judicial authorities,
there appears to have been no instances during the period under review where
the representatives or agents were liable for damages related to the failure to
register a commercial enterprise with the RPPC.
150. Not submitting information or submitting incomplete or incorrect
information to the RNIE can be fined with MXN 1 870 to 6 233 (USD 140
to 467) (Art. 38(IV) LIE). Further, if any type of entity (including a Mexican
fideicomiso) with foreign interests is registered with the RNIE on false
grounds, the Ministry may revoke the authorisation and it may declare acts,
agreements or partnership agreements and statutory agreements null and
void (Art. 37(2)). In practice, during the period under review, neither acts nor
agreements were declared null and void pursuant to that provision.
Providing information to tax authorities
151. Non-compliance with the tax registration requirement for relevant
entities can be sanctioned with a fine between MXN 710 and 27 440 (USD 53
to 2 058) (Arts. 79 and 80 CFF). Non-compliance with the requirement to
file tax returns and submit other information can be sanctioned with fines
between MXN 30 and 382 000 (USD 2 to 28 657) (Arts. 81(I) and (II) as well
as 82(I) and (II)).
152. The Mexican Tax Administration Service (SAT) is the government
agency responsible for the implementation of the tax and customs legisla-
tion, collecting federal taxes, auditing taxpayers compliance with their tax
obligations, promotion of voluntary compliance with, and provision of the
necessary information for the design and evaluation of Mexican tax policy.
153. The SAT keeps a database with comprehensive taxpayer informa-
tion. As at September 2013, there were 39 653 505 individuals and 1 412 248
legal entities in the SATs database, totalling 41 065 753 taxpayers. The SAT
further clarifies that from the 39 653 505 individuals, only 9 690 741 are
obliged to file annual tax returns as all the remaining ones (i.e. 29 962 764
individuals), although registered at RFC, are considered captive taxpayers
taxed as salaried employees and income tax is withheld by their employers.
154. The SAT does not maintain separate statistics concerning the
instances where companies making distributions failed to submit information
on their shareholders. Statistics on the number of tax audits that have identi-
fied non-compliance by corporate taxpayers with the obligation to maintain
an updated share register is not available either.
155. General statistics on the compliance with the filing of annual tax
returns are available. Similarly, information on tax audits conducted by the
SAT is also available concerning the period under review.
156. In order to review the compliance with their tax obligations, the SAT
divides taxpayers in several categories. Corporate taxpayers are divided into
four main categories:
Large taxpayers: comprising Mexicos financial sector, legal entities
that consolidate taxes (holding companies and subsidiaries), legal
entities that for the last fiscal year have reported as taxable income an
amount equal or greater than USD 49 715 333, among others;
Audited (Dictaminados): corporate taxpayers who have their finan-
cial statements audited by an independent public accountant;
Main: legal entities accounting for 70% of the tax collection, exclud-
ing large taxpayers, audited and secondary.
Secondary: legal corporate entities that account for 15% of the tax
collection, excluding large taxpayers, audited and main categories.
157. In addition to the categories above, there is another category of small
business (which includes the corporate taxpayers that do not fall within the
categories described above).
158. The level of compliance is evaluated at two periods in a given year: at
the end of the month of March, when the annual income tax returns are due,
in order to review voluntary compliance; and at year end, after tax controls
and other actions are taken by the SAT against non-compliant taxpayers. The
compliance with tax filing obligations can vary significantly per category of
taxpayer.
159. During years 2010 to 2012, the compliance by large taxpayers with
the obligation to file annual income tax returns was around 79% on March
and around 90% at year end. For the main sector, it started around 72-73%
in March, and finished around 93-94%. In relation to all categories, a compli-
ance of 90% with the filing obligations was reached at year end.
160. The compliance of small business with their filling obligations is
considered low. The Mexican authorities report that they often abandon
economic activity without cancelling their tax registration. This leads of a
number of tax registrations that do not correspond to active businesses in
the small business sector. Audit activity is more focused on taxpayers with
greater economic capacity.
161. The SAT developed a risk assessment framework to guide its audit-
ing function. From 2010 to 2012 approximately 0.9% of Mexicos taxpayers
subject to the obligation to file tax returns were audited. The table below
summarises the verification measures taken by SAT and the amount collected
in connection to such verifications in years 2010 and 2011:
2010 2011
Large Taxpayers
Number of taxpayers subject to
verification actions
(e.g. tax controls, tax audits)
1 154 1 166
Amount of taxes, penalties, interest
raised as a result of verification
actions (in MXN million)
59 645.9
(USD 4 474 million)
60 387.8
(USD 4 530 million)
Other Taxpayers
Number of taxpayers subject to
122 541 120 144
38 348.03
(USD 2 877 million)
42 234.34
(USD 3 168 million)
Conclusion
162. Mexican commercial legislation regarding relevant entities does not
provide for sanctions in case of non-compliance with provisions requiring
relevant ownership information to be kept. However, Mexican tax, AML and
foreign investment legislation include provisions to keep necessary ownership
information and corresponding sanctions for all relevant entities. A small
potential gap in sanctions exists with respect to limited stock partnerships
and co-operatives incorporated in Mexico but not considered resident for tax
purposes (because their principal place of business and effective management
is not in Mexico). Mexico should monitor this potential gap to ensure that it
does not in any way interfere with the effective exchange of information in tax
matters. During the period under review, no requests were received in connec-
tion to limited stock partnerships and co-operatives incorporated in Mexico.
Deter mination and factor s under lying r ecommendations
Phase 1 determinati on
The el ement i s in pl ace.
Phase 2 rating
Compli ant
A.2. Accounting r ecor ds
J urisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements.
163. A condition for exchange of information for tax purposes to be effec-
tive, is that reliable information, foreseeably relevant to the tax requirements
of a requesting jurisdiction is available, or can be made available, in a timely
manner. This requires clear rules regarding the maintenance of accounting
records. The obligations to maintain reliable accounting records are found in
the Commerce Code and tax law.
General requirements (ToR A.2.1)
Commercial enterprises
164. Accounting requirements for commercial entities in Mexico are regu-
lated in the Commerce Code (CCO). They apply to all Mexican companies,
partnerships, businesses run by a trust, not for profit entities and branches of
foreign commercial enterprises (Art. 3). They are obliged to keep and main-
tain an adequate accounting system which must allow the
identification of the individual transactions and their characteristics;
connection of individual transactions to the underlying documents;
connection of individual transactions to the accumulated accounts
and vice versa; and
preparation necessary financial statements (such as balance sheet and
profit and loss account) (Art. 33 CCO).
165. Further, the Income Tax Act (LISR) requires all types of legal entities
to keep and maintain accounting records in accordance with the Federal Tax
Code (CFF) and the Regulations of that Law, as well as to issue supporting
documentation for the activities that they carry out and keep a copy thereof
available to the tax authorities. The CFF states that accounting records must
be maintained as prescribed in the Regulations of the Code (Art. 28(1)(I)).
These regulations require that the accounting system as a minimum shall
identify each transaction, act or activity, and their features;
allow to link each transaction with supporting documentation, so that
the former may be matched with the various contributions, rates and
fixed amounts;
produce financial statements;
link the financial position statements with the accounts of every
transaction; and
include documentation and information concerning the entries of all
the transactions, acts or activities (Art. 29 RCFF).
166. Financial Reporting Standards (NIF) issued by the Consejo
Mexicano para la Investigacin y Desarrollo de Normas de Informacin
(CINIF) serve as guidelines for accounting and are supported by the tax
administration. They require financial statements to meet qualitative criteria,
such as reliability, comprehensibility, truthfulness, sufficiency of information
etc. Though, the NIF does not have the force of law. There are sectors that
also have specific regulations on standards and formats of financial reports
depending on their activity e.g. the financial sector. In general, these criteria
conform to the NIF.
167. Accounting records of AML regulated entities must allow the
reconstruction of individual transactions (see e.g. ss.51 and 59 AML Bank
Credit Institutions Regulations and ss.46 and 54 SOFOLES Regulations).
Moreover, under the new AML framework (LFPIORPI), the reporting per-
sons (described in section A.1.1 of this report) must also keep information
and documents that support the activities that they conduct on behalf of their
customers (Art. 18). Pursuant to the LFPIORPI, if the reporting persons fail
to maintain such documentation, they will be subject to, upon conviction,
a fine in the amount equivalent to 200 and up to 2 000 days of the daily
minimum wage applicable in Mexicos Federal District (LFPIORPI, Arts. 53
and 54). Currently, the amount vary between MXN 12 466 (USD 935) to
MXN 124 660 (USD 9 352).
168. Failing to keep required accounting records and making inaccurate
accounting entries required by tax legislation can be sanctioned with fines
between MXN 260 (USD 19) and 11 960 (USD 897) depending on the type
of infringement (Arts. 83(I and II) and 84 CFF). Further, a sanction of three
months to three years in prison will be imposed on persons who totally or
partially conceal, alter, or destroy the accounting records and systems, as
well as the documentation corresponding to the respective entries, that the
tax laws require them to maintain (Art. 111(I)(II)). The same sanction applies
if a manager of a company for personal gain alters accounts or contract terms
(Arts. 388 and 400 Federal Penal Code (Cdigo Penal Federal CPF)).
169. The SAT is the government agency responsible for auditing account
information in the context of tax audits/controls it performs and to apply
sanctions to non-compliant taxpayers.
Trusts
170. In its accounting based on commercial, tax, financial legislation law
etc., a fiduciaria must keep separate accounting information for each fide-
icomiso, and register in their own accounting records any assets entrusted
to them, as well as any increase or decrease of assets (Art. 386 LGTOC and
Art. 79 LIC).
171. The Central Bank Regulation 1/2005 requires a fiduciaria to regis-
ter and maintain evidence of the transactions executed in accordance with
the relevant governing law, i.e. not only related to records for accounting
purposes but any other purpose for which the trustee is required to keep
records. Further, the Administrative Banking Regulations require a fiduci-
aria to maintain the original books, records and documentation regarding
their fideicomisos operations, as well as those related to their accounting,
in accordance with the federal laws or any regulations issued by CNBV
(Art. 301 Administrative Banking Regulation).
172. If a fideicomiso is engaged in commercial activities accounting
records have to be kept under tax law at the tax domicile of the fiduciaria
in the same manner as described previously for commercial enterprises
(Arts. 27, 28 and 30 in connection with Art. 13 CFF). The definition of
accounting records is very wide as it includes accounts and records required
by tax provisions, other records kept by taxpayers, even if not mandatory,
and records required by other laws (Art. 28(3) CFF). They further include
working papers, the documentation used to support the respective accounting
entries and any records evidencing that the tax provisions have been complied
with.
173. Non-compliance with record keeping requirements in Mexican tax
law as well as, in the case of commercial activities, commercial law by trusts
can be fined as described above for commercial entities. Non-compliance
with the requirement of keeping separate accounting information for each
fideicomiso can be sanctioned with a fine between MXN 62 330 (USD 4 676)
and 311 650 (USD 23 380) (Art. 108(II)(d) and (e) LIC). No sanctions apply
based on LGTOC. However, a fiduciaria can face legal claims from the
fideicomitente or the fideicomisarios for damages caused by non-compliance
with these accounting rules.
174. Fideicomisos are subject to the SATs tax control framework as other
entities and arrangements in Mexico.
175. No specific accounting rules exist for foreign trusts administered
by Mexican trustees. However, business activities of the trust will be sub-
ject to Mexican accounting obligations if these activities are carried on in
Mexico. Also, a professional Mexican trustee will be subject to the previously
described Mexican accounting rules regarding his own business activities as
a trustee. Further, the Mexican authorities advise that all income received by
a Mexican resident is considered income for tax purposes, regardless of its
source and must be declared in tax returns. Therefore, where trust income is
derived by a Mexican resident acting as a trustee of a foreign trust, the trust
income is considered as income of the Mexican resident, unless the trustee
proves the income is received on behalf of a third party.
176. Article 75 of the Mexican Commercial Code establishes those acts
that are considered as commerce acts. Among others, the following: i) acqui-
sitions, disposal and rental with commercial speculation purposes of goods,
furniture or merchandise, either in natural state or after being transformed;
ii) real estate acquisitions and sales, when these are made with commercial
speculation purposes; iii) shares and corporate bonds acquisitions and sale;
iv) commission corporations, agency corporations and business office corpo-
rations, and; v) any analogous act of the stated in such Code.
177. In this regard, if a Mexican resident trustee carries out any of the
activities above on behalf of the foreign trust, such activities would be con-
sidered as commercial acts. As such, the trustee would be subject to all the
obligations stated on the Commercial Code; including book-keeping and
the duty to register before the Public Property and Commerce Registrar.
Article 33 of the Commercial Code provides that those who perform com-
mercial acts must maintain adequate accountable records that comply with
the following requirements: (i) identify individual transactions and their
characteristics, and connect such transactions with underlying documenta-
tion; (ii) allow the preparation of financial statements; (iii) connect individual
transactions to the accumulated accounts and vice-versa.
178. Pursuant to the Commercial Code, accounting records and underly-
ing documentation should be kept for a minimum period of 10 years.
179. Moreover, Mexican tax residents, including persons acting as trus-
tees, are subject to income tax on a worldwide basis (articles 17 and 106
LISR, for enterprises and individuals). Thus, if a professional acting as a
trustee fails to separate his/her accounts/funds from the ones of his/her client,
he/she will be liable to tax on the income/ funds that belong to his/her client.
As a result, in order to prevent the negative tax outcome, the trustee would
need to keep the accounting records comprising his/her own assets, liabilities,
income and losses separately from similar records in connection to the trusts
he/she administers.
180. In addition, the LFPIORPI, which extends the coverage of Mexicos
AML framework to a number of professionals, including the ones providing
services such as the administration and management of resources, securities
or other assets of their clients; and the management of bank, savings or secu-
rities accounts (LFPIORPI, Art. 17, XI, b) and c)). The activities performed
by a Mexican resident acting as trustee of a foreign trust on a professional
basis involve the holding and management of assets of other persons and
therefore would be covered by the LFPIORPI. The LFPIORPI imposes
the obligation on the professionals covered by the law to keep information
and documents supporting the activities performed on behalf of the client
(LFPIORPI, Art. 18, IV).
Non-profit entities
181. Non-profit entities have to keep accounting records as set forth in
the CFF and its Regulations (Art. 101(1)(I) LISR). Hence, they are required
to keep and maintain accounting records at their place of fiscal domicile as
specified in the RCFF (Art. 28(1)(I and III) CFF). Their accounting records
have to comply with the minimum requirement provided in Article 29 of the
RCFF as described in more detail above for commercial enterprises.
Conclusion
182. Mexican companies, co-operatives, partnerships, trusts and non-
profit organisations as well as branches of foreign enterprises are required to
keep adequate accounting records.
Underlying documentation (ToR A.2.2)
183. Under the Commercial Code, all businesses must keep accounting
information which allows identification of the individual operations and
their characteristics, as well as connect individual operations to the original,
evidencing documents and vice versa (Art. 33 CCO). Businesses are also
required to keep the original documents of their operations, in such a manner
that they are able to be related with said operations and with the registry
made from the same (Art. 38).
184. Tax legislation requires that underlying documentation be kept by all
types of legal entities (including fideicomisos and non-profit entities) as there
is a requirement that each transaction in such an entity can be linked with
supporting documentation (Art. 29(1)(I) RCFF). Further, tax law requires all
types of legal entities to issue supporting documentation for the activities
that they carry out and keep a copy thereof available to the tax authorities
(Art. 86(II) LISR). Further, it should be noted that where provisions within
CFF refer to accounting records, the term will be understood to include
working papers, accounting records and the documentation used to support
accounting entries as well as records evidencing that the tax provisions have
been complied with (Art. 28(4) CFF).
185. Failure to maintain underlying documentation are subject to fines
ranging from MXN 730 (USD 55) to MXN 9 560 (USD 717) (Arts. 83(VI)
and 84(V) CFF).
The 5-year retention standard (ToR A.2.3)
186. All commercial entities have to keep their accounting records, under-
lying documents and business correspondence for a minimum of ten years
(Arts. 38, 46, 47 and 50 CCO).
187. All taxpayers that are legal entities are explicitly required to keep
accounting records, underlying accounting documentation as well as other
tax-relevant documentation for a minimum of five years (Art. 30(3) CFF).
188. Records of transactions, contracts and other documentation required
by AML legislation have to be kept for a minimum period of ten years after
the execution of the transaction (e.g. s. 59 Credit Institutions regulation and
s. 54 SOFOLES regulations).
In practice
189. During the three-year period under review Mexico received 74 EOI
requests which contained 270 inquiries for accounting records and/or under-
lying records from its EOI partners (49 in 2010, 141 in 2011 and 80 in 2012).
The information requested included copies of accounting records, invoices
and tax returns, income slips, tax withheld and income paid to foreign corpo-
rations and authentication of accounting documents.
190. Peer input from Mexicos EOI partners confirmed that full answers
have been received in all cases and that partners are satisfied with their
quality.
191. In relation to a few requests, it has happened that a taxpayer had
failed to file annual tax returns. However, after being requested by the
Mexican competent authority to provide the relevant accounting records, the
taxpayers did provide the records and filed late returns.
192. In the few instances, Mexico was not able to identify the entities/
individuals that were the subject of the request. In such instances, the Mexico
EOI team made a thorough investigation of the entities/individuals, and found
no traces of the transaction under investigation abroad (i.e. this would nor-
mally refer to the existence of a transaction between a foreign taxpayer and
a Mexican taxpayer). Mexico has reviewed all information sources available
including, for instance, the customs database, SATs databases regarding
operations with foreigners and specific import or export permits. The EOI
team has also contacted the Mexican taxpayers involved as a last resort before
closing the investigation (as communicated to the EOI partners) who in most
cases confirmed that they had not engaged in the referred transactions.
193. The SAT does not maintain separate statistics concerning the penal-
ties applied in connection with the failure to keep proper accounting records
and underlying records. The amount of penalties imposed and collected is
registered in a very generic manner. Notwithstanding the above, as of year
2014, tax auditors are required to clearly identify all amounts referring to
each category of infractions specified in the CFF, following the recommenda-
tions made by the OECD working group on bribery.
194. The review of accounting records and underlying documentation is
usually done in the course of a tax audit. From 2010 to 2012 approximately
0.9% of Mexicos taxpayers subject to the obligation to file tax returns were
audited. The table below summarises the verification measures taken by SAT
and the amount collected in connection to such verifications in years 2010
and 2011:
2010 2011
Large Taxpayers Number of taxpayers subject to
1 154 1 166
59 645.9
(USD 4 474 million)
60 387.8
(USD 4 530 million)
Other Taxpayers Number of taxpayers subject to
122 541 120 144
38 348.03
(USD 2 877 million)
42 234.34
(USD 3 168 million)
195. The level of compliance with tax filing obligations in Mexico varies
per category of taxpayer. During years 2010 to 2012, the compliance by large
taxpayers with the obligation to file annual income tax returns was around
79% in March and around 90% at year end. For the main sector (please see
A.1.6 for a description), the compliance started around 72-73% in March, and
finished around 93-94%. In relation to all categories, a compliance of 90%
with the filing obligations was reached at year end.
196. In addition to the auditing activity, the Mexican tax authority also
performs a more extensive monitoring of the filing obligations, including
verification of filing of tax returns and cross-checking of information filed
by taxpayers and some third parties, such as employers and banks. There
were 3.6 million controls in years 2010 and 2011 and 5.5 million controls in
year 2012.
197. With regard to the cases prosecuted by SAT pursuant to Article 111
of Federal Penal Code, the statistics are as follows: three cases were pros-
ecuted in 2010, two in 2011 and one in 2012. Out of these cases, one resulted
in imprisonment, three are still pending and two were closed without the
application of the imprisonment penalty.
Phase 2 rating
Compli ant
A.3. Banking infor mation
Banking information should be available for all account-holders.
Record-keeping requirements (ToR A.3.1)
198. As described above under the Part A.1 (companies), Mexican AML
legislation covers all the principal sub-sectors of the financial system: credit
institutions and money exchange and transmitting institutions; savings and
popular credit entities; financial leasing and factoring companies; broker-
age firms; retirement funds; investment companies; insurance institutions;
and bonding institutions. The financial institutions are, under the various
Administrative AML Regulations, required to keep records of all their
transactions (see e.g. s. 51 Credit Institutions Regulation and s. 46 SOFOLES
Regulations). Accounting records must allow the reconstruction of individual
transactions (see e.g. ss.51 and 59 AML Bank Credit Institutions Regulations
and ss.46 and 54 SOFOLES Regulations). Under the Credit Institutions Act,
banks are required to record all their transactions the same day they execute
them (Art. 99). In addition, institutions within the financial sector are required
to keep accounting records, including underlying documents evidencing the
transactions executed through them, pursuant to regulations issued by the
regulators (CNBV, CNSF and CONSAR). All entities in the Mexican finan-
cial sector are required to keep accounting information (including transaction
records) for a minimum of ten years (Arts. 38 and 46 CCO).
199. For the purposes of identification, financial institutions must request
identification information and documents regarding their customers and the
beneficial owners of customers. Financial institutions are required to open
customer identification files before opening accounts or conducting transac-
tions. They have to identify their customers by name, address, identification
numbers (if available) and they have to require and keep copies of original
or certified official identification documents for both individuals and legal
persons. When the customer is acting for another person under a power of
attorney, the original copy of the power of attorney has to be requested or a
certified copy thereof, as well as the identification and proof of address of
the agent. This information has to be kept for at least 10 years. The regulated
entities have to do annual checks in order to make sure customer identifica-
tion documentation is up-to-date (Chapter II of the Regulations).
200. In respect of banks and other financial institutions, the combination
of banking, commercial, tax and AML legislation imposes appropriate obli-
gations to ensure that all records pertaining to customers accounts as well as
related financial and transactional information are available.
In Practice
201. The CNBV is the government body responsible for regulating
Mexicos banks and foreign banks operating in Mexico. Banks must be
licensed with the CNBV to operate in Mexico. In 2012, there were 48 banks
operating in Mexico. The CNBV has approximately 10 inspectors special-
ised in AML, and an additional 15 inspectors that can also perform an AML
review if necessary. The table below summarises the number of verifications
(including AML verifications) and penalties imposed by the CNBV on the
licensed entities:
Year Number of verifications Amount of penalties imposed Amount of penalties paid
2010 308 USD 8.4 million USD 5.3 million
202. The main breaches identified by CNBV referred to the failure to
comply with the AML legislation, resulting in the application of penalties in
the amount of USD 28.8 million (in one case, a financial institution commit-
ted a major offense resulting on a penalty of USD 26.4 million).
203. Mexican tax administration receives bank information from finan-
cial institutions on an automatic basis. Information received include interest
payments, stock sales, investment societies, mortgages, cash deposits over
MXN 15 000 (USD 1 125).
204. During the period under review, Mexico received 74 EOI requests
which contained 34 inquiries for banking information (9 in 2010, 12 in 2011
and 13 in 2012). The information requested included copies of contracts for
the opening of bank account, signature cards, monthly or periodic bank
statements, copies of cancelled checks, deposit slips, wire transfers or other
deposits, withdrawals, copies of certificates of deposits, safe deposit box con-
tracts and banking loan agreements. The clients concerned were individuals,
companies and fideicomisos.
205. The Mexican competent authority reports that, occasionally, it was
not able to provide the banking information requested because no bank
account was found in the name of the accountholder provided by the request-
ing jurisdiction. In all cases, Mexico has performed verifications in its tax
databases and with the banks to determine whether the person referred by the
foreign jurisdiction has a bank account in Mexico (more details in section B.1
of this report).
206. Some requests involved records covering three/four years and a
number of different bank accounts. Delays were occasionally experienced (as
reviewed in section B.1 of this report).
Phase 2 rating
Compli ant
COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION 65
B. Access to Infor mation
Over view
207. A variety of information may be needed in a tax inquiry and jurisdic-
tions should have the authority to obtain all such information. This includes
information held by banks and other financial institutions as well as informa-
tion concerning the ownership of companies or the identity of interest holders in
other persons or entities, such as partnerships and trusts, as well as accounting
information in respect of all such entities. This section of the report examines
whether Mexicos legal and regulatory framework gives to the authorities access
powers that cover relevant persons and information, and whether the rights and
safeguards that are in place would be compatible with effective exchange of
information. It also assesses the effectiveness of this framework in practice.
208. Mexican legislation provides the competent authority with the
necessary powers to access ownership and accounting information held by
relevant entities irrespective of whether these entities are legally required
to keep the information or not. Ownership information can to some extent
also be obtained from public registries, including the Public Register for
Property and Commerce and the National Register for Foreign Investment.
Furthermore, the competent authority has the power to access necessary
accounting information. None of these access powers depend on the existence
of a domestic tax interest.
209. In practice, Mexicos competent authority has been able to gather
information from taxpayers and third party holders to respond to exchange
of information requests. The Mexico tax administration maintains compre-
hensive databases to which the competent authority has direct access. In a
number of instances, the competent authority could gather the information
requested by its treaty partners in such databases. The officials of the EOI
team are all tax auditors and have full information gathering powers and can
directly access information from taxpayers and information holders (includ-
ing a number of government agencies in Mexico that hold information that
is relevant for EOI). This centralised approach ensures that information is
66 COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION
collected in a timely fashion by experienced auditors, allowing Mexico to
reply to requests in a complete and accurate manner.
210. Mexico has broad powers to access bank information which were
consistently used to gather bank information for EOI purposes during the
review period. The access to bank information was, in practice, performed
via the National Banking and Securities Commission. On average the
Mexican competent authority was able to access and provide bank informa-
tion to its EOI partners within approximately eight months. Response times
to a number of requests exceeded six months and in some cases one year and
were considered not timely by one of Mexicos main exchange of informa-
tion partners. Mexico has also recently amended its law providing for direct
access to banking information, but it has not been yet tested in practice.
Mexico is recommended to monitor the new law and use all its access powers
for bank information as efficiently as possible.
211. Only in isolated cases taxpayers have not provided the requested
information within the given timeframe. Mexico has invariably imposed
sanctions in these instances and the taxpayers involved eventually co-oper-
ated with the Mexican competent authority. Mexico has not had to employ
search and seizure measures to compel the production of information in rela-
tion to an EOI request.
212. The Mexican authorities are not required to notify the person that is
the subject of the exchange of information request concerning the existence of
such request. Moreover, to date, there have been no instances in which attor-
ney-client privilege has been invoked by persons from whom information has
been requested for purposes of EOI. In practice, the rights and safeguards that
apply in Mexico have not restricted or delayed an answer to an EOI request.
B.1. Competent Author it ys abilit y to obtain and pr ovide infor mation
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information).
Bank, ownership and identity information (ToR B.1.1) / Accounting
records (ToR B.1.2)
The Competent Authority
213. The capacity to exchange information in Mexico lies on the Mexican
Tax Administration Service (SAT) and more specifically with the General
Administration for Large Taxpayers (Tax Administration Service Act
Ley del Servicio de Administracin Tributaria LSAT, Art. 7 (IX), and
Administrative Tax Service Regulations (Reglamento Interior del Servicio
de Administracin Tributaria RISAT), Articles 20 and 21). This capac-
ity is legally and operatively delegated to the Central Administration for
International Audits. Therefore, the latter department is registered as the
Mexican competent authority for EOI purposes.
214. The Central Administration for International Audits is formed by
four Administrations. Three Administrations are dedicated to international
fiscal audits and the other one, the Administration for International Audits
3, is exclusively dedicated to exchange of information.
215. The contact information of the Mexican competent authority is fully
identifiable in the OECD and Global Forum websites. Moreover, Mexico
generally provides the contact information of its competent authority to treaty
partners when finalizing treaty negotiations.
Access in general
216. Access powers relevant for the Mexican competent authorities are
regulated in Article 7 of the LSAT as well as Articles 32-B and 42 Federal
Tax Code (Cdigo Fiscal de la Federacin CFF)). Article 7 of the LSAT
outlines the SATs general functions. It provides the SAT with the power to
use its access powers in order to provide information and documentation
from taxpayers and third parties to supervising and regulating agencies of
other countries with which Mexico has signed an agreement (Art. 7(IX)).
217. The SATs information gathering powers, which can be used irre-
spective of whether an information holder is under a legal obligation to keep
the information in question, include the power to (Art. 42 CFF):
access accounting records of taxpayers, parties jointly and severally
liable with them or third parties related to them, at their establish-
ments or at the offices of the tax authorities, or request them to
provide information or access to other documents (Art. 42(II));
conduct field audits of taxpayers, parties jointly and severally liable
with them or third parties related to them, and review their account-
ing records including underlying documents, assets and merchandise
(III and V(1));
review documents prepared by public accountants on taxpayers
financial statements and on their transfers of shares (IV);
request taxpayers to provide information necessary to correctly reg-
ister said taxpayers in the RCF (V(2));
gather from officials and public employees on federal, state and
municipal level as well as from persons with notary functions the
documents and data that they have obtained in performing their
duties (VII); and
gather evidence needed for criminal proceedings regarding tax
offences (VIII).
218. It should be noted in connection with the above powers, that the
definition of accounting record in Mexican tax law is very wide as it includes
not only all accounts and records required by tax provisions but also other
records kept by the requested taxpayers, parties jointly and severally liable
with them or third parties related to them, even if not mandatory, and the
records required by other laws (Art. 28(3) CFF).
In Practice
219. In practice, the Mexican competent authority is directly involved in
gathering information to answer the requests for exchange of information. All
members of the competent authority/EOI team have also a solid experience
in tax auditing and have served other departments of the SAT before taking
part on the EOI work.
220. The Mexican EOI team has direct access to most of SATs insti-
tutional databases, which have been very useful in the context of EOI. A
number of requests could be replied based on information available in such
databases. In other cases, the databases are a helpful starting point (in cases,
for instance, where the name of the taxpayer as provided by the requesting
jurisdiction is incomplete or not accurate). If the information requested is in
the EOI databases, a reply to the EOI requested is provided in average within
15 working days.
221. If the information requested in is the hands of other government
authorities, the EOI team will directly contact the relevant authority (except
the National Banking and Securities Commission with which contact in done
via another department in SAT as further analysed in this section). The EOI
team will as a rule send a written request to the relevant authority without the
need of including any details of the foreign competent authority or the for-
eign investigation. The Mexico EOI team does not impose a deadline to the
assistance to be provided by the other authority. As such, the response times
vary considerably depending on the authoritys workload. Nevertheless, the
EOI team reports that it does follow-up with the pending requests and that
authorities co-operate in a timely manner in the great majority of the cases.
Timeliness was not a problem, except in certain cases related to the access to
bank information (as further described in this section). The main government
authorities/agencies contacted for purposes of gathering information for EOI
are:
the Public Registry of Property and Commerce, for information on
incorporation of legal entities and real estate property;
the National Registry of Foreign Investments, for information on
foreign owners of Mexican legal entities and foreign investments in
general.
the National Banking and Securities Commission, for banking infor-
mation (more details are provided later in this session)
the Office of Passports/ Ministry of Foreign Relations, for informa-
tion on individuals (database searches can be made using a passport
number, a birth date and/or a last name).
the Central Administrator for Customs Investigations, for informa-
tion on arrival and departure of individuals in Mexico;
Director for Permissions in terms of Article 27 of the Constitution in
the Ministry of Foreign Relations, for information on certain types
of fideicomiso.
222. The EOI Team also has the powers to approach a taxpayer or infor-
mation holder in Mexico. It commonly does so in order to reply to requests
for ownership information, accounting records and underlying documentation
(unless this information is already available with the SAT/other government
agency). In those cases, the EOI team will issue a notice for production
of information requesting the taxpayer/information holder to provide the
requested information within 15 working days (a 10-working-day extension
is available if requested by the taxpayer information holder. If the taxpayer/
information holder does not answer in that period, or an answer comes but
it is not accurate or complete, the EOI team will impose sanctions as further
analysed in section B.1.4 of this report.
223. In practice, during the review period, the Mexican competent author-
ity was able to access information to reply to EOI requests, as confirmed by
peer input. Peer input indicates that on one occasion, Mexico was not able
to provide the information requested in relation to an individual, because
the requesting jurisdiction could not provide Mexico with one of the last
names of the individual in question. In the absence of the Mexican taxpayer
identification number, passport number, date of birth, etc., Mexico can still
query information based on the taxpayers name; however, it will generally
need both the paternal and maternal last names in order to conduct the query.
Similar to other Latin America countries, most individuals names include
two last names (one maternal and one paternal). The peer in question does
not use the maternal last name as part of name or identification; therefore, at
times, it may be difficult for it to obtain this information.
224. During the period under review Mexico has accessed and provided
to treaty partners information on ownership and identity of legal entities,
accounting records and underlying documentation, and bank information.
In addition, Mexico has also accessed and provided information concern-
ing beneficiary of payments, residency determination, unreported income,
information related to avoidance schemes, tax return information, details on
business activities, information about real estate, entry/presence of foreign
individual taxpayers in Mexico, and contact details of individuals for debt
recovery purposes.
Access to bank information
225. Since 2009 tax authorities have the power to request information
regarding deposits, services, trusts or any other type of transactions
directly from entities within the financial industry (financial entities and
loan and savings co-operatives) (Art. 32-B(IV) CFF). This includes access
all relevant information, including transactions, account opening informa-
tion, mandates, etc. Moreover, on 24 October 2013, Article 32-B (IV) of CFF
mentioned above was modified to expressly provide that the tax authorities
powers to request information on bank accounts, credit and loan transactions
apply in the context of a tax investigation (exercise of review powers), tax
enforcement or tax collection procedures. This amendment aimed at clarify-
ing that the tax authorities can access information directly from a bank when
an investigation is still ongoing. Prior to this amendment, the use of access
powers in the course of a (foreign) investigation was not successful (see more
details below).
226. Prior to 2009, SAT had access to such information only through
regulators of the financial industry, such as National Banking and
Securities Commission (CNBV) (Art. 117(5) Credit Institutions Act (Ley
de Institucines de Crdito LIC). Pursuant to Article 117 of the LIC, the
obligation of financial institutions to maintain banking secrecy is restricted
by their obligation to provide information to certain government authori-
ties, including the SAT. In the terms of Article 117, the SAT as well as other
government agencies listed in the law may request information to financial
institutions via the CNBV under the procedures established by the CNBV.
That law also authorises CNBV to sanction financial institutions that fail to
provide the requested information.
227. Neither of the two access channels (i.e. direct access and access via
the CNBV) requires SAT to provide a particular type of information to the
financial institution in order to identify the taxpayer or information holder.
In practice
228. In practice, during the period under review, the Mexican competent
authority always accessed banking information via the CNBV.
229. The CBNV has developed an automated system for accessing bank-
ing information which has been operative since 2006. Subsequently, it
developed interfaces with other government agencies, which allow such agen-
cies to request banking information via the automated system as well. All
requests are sent to the banks by CNBV in a standard electronic format. The
usage of this format has significantly reduced the time to request information
as well as response times. Since November 2011, the SAT has been connected
to the CNBV system and can electronically send the requests to CNBV via
the system which transmits the requests (in original format) to the financial
institution(s). Previously, the SAT needed to send a request in paper format
to CNBV which transmitted the request to the banks. The request follows the
flowchart below:
CA
Drafs the
request for
banking
informaton
SATs Dptmof
Expediton
Includes the
request in the
electronic
system
CNBV
Ataches a
control
number to the
request/
validate it and
send it to the
nancial
insttuton (s)
Bank
Reply to the
request (by
courier)
CNBV SAT
Reviews
the reply
230. The banks are given 27-29 working days to reply to requests. The
response times depend on the amount and type of information requested.
Banks can generally obtain an extension of the deadline if they so request.
If, for instance, copies of cheques and deposits and bank transfer are needed,
the bank first provide bank statements; then the EOI team needs to make a
separate request for the specific cheques, deposits and transfers in relation to
which it requires more detailed information. The banks are given another 27
to 29 days to respond to this subsequent request. If the EOI request refers, for
instance, to copies of a specific cheque or cheques, they can be obtained in
one step, however.
231. The system also allows the requesting agency/CNBV to indicate
that the request is urgent. Requests connected to EOI are treated as priority.
However, the CNBV receives requests from many authorities/ government
agencies, amounting to 90 000 to 125 000 instances of access to banking
information per year during the years 2010 2012. The CNBV noted a very
significant increase in the number of requests for banking information: in
2001, it received 20 236 requests for bank information from Mexican govern-
ment agencies including SAT; in 2012, the number increased to 124 605. The
SAT alone has made 20 000 to 30 000 requests for banking information on
an annual basis during the period 2010 2012). As a result, time is required
by CNBV to process and administer that large demand.
232. During the period under review, the EOI team was able to access
banking information from the CNBV within five months on average.
However, the answer to a few requests has considerably exceeded this time-
frame (more details later in this section).
233. As a matter of practice, the requests for bank information sent by
the EOI team to the banks via the CNBV include, as part of the legal basis
to the request, a reference to the fact that information is being requested on
the terms of an EOI instrument entered by Mexico, without referring to the
specific EOI instrument.
234. The Mexican competent authority reported a number of reasons to
justify why the access via the CNBV would be in practice more efficient than
accessing information directly from the banks.
Mexico receives a number of requests from its EOI partners where
the name of the bank and the number of the bank account are not
provided. The access via the CNBV gives the possibility to directly
enquire all Mexican banks at once on whether a certain person has a
bank account there. Therefore, Mexico is able to provide to its EOI
partners information on all bank accounts a person holds in Mexico.
The Mexican competent authority reports that it would be very dif-
ficult and time-consuming to make a similar consultation by means
of sending a letter to every single Mexican bank;
via the CNBV system, the request is received by the right contact
person in the bank. As a rule, only certain personnel in the bank have
access to the CNBV system. Therefore, it is expected that the request
will be handled by a centralised contact point, already familiar with
this type of requests, expediting response times. This can in a way
ensure only a restricted number of banking officers become aware of
the request for information from the tax authorities;
the banks are prohibited from disclosing the requests received from
the CNBV to the account holders (Sole Banking Circular Circular
nica de Bancos);
the CNBV can assess significant penalties in case the banks delay
or fail to respond (which are in some cases higher than the penalties
applicable under tax law).
235. In two instances during the period under review, the Mexico tax
authority attempted to collect information directly from a bank, as per the
request of its treaty partner. The treaty partner in question is Mexicos main
EOI partner and has sent the majority of the requests for banking informa-
tion received by Mexico. The treaty partner reports that in its experience,
the process via the CNBV was very protracted and, as a result, Mexico was
not able to provide bank information on a timely manner. The Mexican
competent authoritys powers to access information directly from the banks
were only introduced in 2009, so therefore, the Mexican competent author-
ity did not have experience in using them before, as at that time, access to
bank information was always via the CBNV and the process had proven to
be reliable to access information both for domestic and EOI purposes. In the
two instances, the Mexican competent authority faced a refusal from the
banks, as they claimed that the authorities access powers would be restricted
to situation where a tax credit is already in place (and therefore not in the
case of on-going investigations). The Mexican authorities support that their
access powers are adequate and can be used; however, in order to reply to
the EOI requests without further delays that would be involved in a court
case, the competent authority requested information via the CNBV. The
banks have not refused to co- operate to reply to the same requests when they
were received via the CNBV as the access powers provided under the Credit
Institutions Law (analysed earlier in this section) are clear. Bank information
was eventually obtained and provided to the treaty partner in relation to the
requests. However, according to the partner, the responses were not timely.
236. On 24 October 2013, the tax authoritys powers to gather informa-
tion directly from the banks, under Article 32-B (IV) of CFF, were clarified
to expressly provide that the tax authorities powers to request information
on bank accounts, credit and loan transactions apply in the context of a tax
investigation or tax collection procedure. With this clarification, the Mexican
competent authority does not foresee any problems in using direct informa-
tion gathering powers, should they wish to pursue this venue in the future.
However, this new procedure was introduced after the review period and has
not been tested. The competent authority reports, nonetheless, being satisfied
with the access of information via the CNBV and has not been faced with
a case where it would prefer to directly gather information from the bank.
Mexico is recommended to monitor the application of the new law providing
for direct access of bank information.
237. The Mexican competent authority reports that the timeliness of the
access via the CNBV has improved over time, especially since November
2011, when the SAT became directly connected to CNBVs electronic system
maintained. In 2011 when the SAT was migrating from manual access to
banking information to CNBVs electronic system, it took a maximum
period of 334 days to access information via the CNBV (this does not include
the time taken by the EOI team to review and answer the request, but just
the time to access bank information). In 2012, the maximum time period
has decreased significantly to 125 days, what represents a 63% decrease.
The complete timeframes for access to bank information via the CNBV are
described below:
2010: Mexico received eight requests for banking information.
Response times from CNBV ranged from 40 to 256 days (average
of 133 days). In relation to some cases, the volume of the responses
was significant, including a case where information was requested in
relation to 11 bank accounts for the period of two years. Moreover,
there were seven requests made for open accounts i.e. requests
for information on all accounts opened by a given person in Mexico.
Those requests usually take longer to be replied to as all Mexican
banks need to provide a reply;
2011: Mexico received 11 requests for banking information. Response
times from CNBV ranged from 36 to 334 days (average of 174 days).
In relation to some cases, the volume of the responses was significant.
Moreover, there were five requests made for open accounts;
2012: Mexico received five requests for banking information. This
includes the two cases where the requesting jurisdiction asked
Mexico to go directly to the bank to obtain information (as described
above). The CNBV took the maximum time of 125 days to reply to
the requests.
238. In average, Mexico was able to reply to requests involving bank
information on average on eight months during the review period (207 days
in 2010, in 250 days in 2011 and 281 days in 2012). Mexico reports that in
many instances time the requests involved not only bank information but
other types of information requiring additional time to provide full responses
to the requests. Moreover, with regard to the gathering of bank information,
Mexico reports that it has in many occasions necessary to spend some time
identifying the accountholder (see more details below), reviewing the infor-
mation provided by the bank and making further inquiries to CNBV when
the information provided was not complete.
239. All requests for banking information received by Mexico during the
period under review contained the name of accountholder. Mexico reports
that occasionally the name of the taxpayer was not complete or accurate
(e.g. one of the last names of the individual was missing or the spelling was
not accurate). Mexico attempts to reply to requests even in these circum-
stances. The EOI team can search the SAT databases for different spelling
of names (e.g. Rodriguez and Rodrigues) as well as for incomplete names.
In a few occasions, however, despite the effort made, it was not possible to
identify the account holder, as for instance, when hundreds of persons in
Mexico have the same first name and one of the last names provided by for-
eign authority. Moreover, in some cases a great deal of time was spent before
a banking information request could be issued to the CNBV, as the EOI team
was trying to identify the individual involved. Some full names are also very
common in Mexico, corresponding sometimes to 50/100 taxpayers. In those
cases, additional identity information (such as the date of birth) would be
required to identify the individual that is the subject of the EOI request.
240. Mexicos main EOI partner who has sent the majority of the requests
for banking information received by Mexico considered that the responses
received were not timely, as in 72% of the cases, responses were received
after 180 days, being in 29% of the cases received more than one year after
the request. Two other EOI partners that requested bank information from
Mexico and provided input to this review did not raise concerns concerning
timeliness. While it is acknowledged that progress has been made since the
migration to electronic access of banking information via the CNBV, Mexico
is recommended to monitor the use of its access powers for bank information
as efficiently as possible.
Sanctions
241. If a person refuses to provide information as requested to the SAT,
they can be sanctioned with a fine between MXN 13 720 and MXN 41 170
(USD 1 029 to 3 088) (Arts. 85 and 86 CFF). In practice, the competent
authority will impose a fine in the amount of MXN 13 720 (USD 1 029) if
the taxpayer/information holder fails to comply with the notice for produc-
tion of information or produces inaccurate or incomplete information. In such
cases, the notice will be in that case reissued. If the taxpayer/information
holder fails to comply with the second notice an increased fine in the amount
of MXN 41 170 (USD 3 088) will be imposed. After the application of the
second fine, the Mexican competent authority has under its disposal the sanc-
tions described in section B.1.4 below.
242. Non-compliance by financial institutions with a request by SAT to
provide information, regardless of the purpose for which the information has
been requested (exchange of information or domestic needs), can be sanc-
tioned with fines up to MXN 794 140 (USD 59 575) (Arts. 84-A and 84-B
CFF). Where non-compliance relates to a request for information made by
the CNBV on behalf of SAT, the CNBV may sanction credit institutions with
a fine of up to MXN 6 233 000 (USD 467 592) (Art. 108 LIC). During the
period under review, the Mexican competent authority did not apply the pen-
alty provided in Articles 84-A and 84-B of the CFF. In the instances where
the bank refused to provide information as described above, the competent
authority has obtained the information via the CNBV and no penalties were
applied.
Conclusion
243. Mexican legislation provides the Mexican competent authority with
the necessary powers to access bank, ownership and accounting information
for EOI purposes and provides for sanctions to ensure enforcement of these
access powers. In practice, those powers have been effectively used and
information for EOI purposes gathered. Bank information was not always
accessed in a timely manner, but it was nonetheless provided in the form
requested in all instances where it was available. Mexico should ensure that
bank information can be accessed in a timely manner.
Use of information gathering measures absent domestic tax interest
(ToR B.1.3)
244. The concept of domestic tax interest describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes.
245. Subject to the existence of an international agreement (double tax
convention or taxation information exchange agreement) and reciprocity, the
SAT can use all its domestic access powers also for EOI purposes (Art. 7(IX)
LSAT). Mexican law does not have any provisions limiting access to infor-
mation to those circumstances where Mexico has an interest in the requested
information for its own tax purposes.
246. In practice, the Mexican competent authority had no problems to use
its information gathering measures absent domestic tax interest. For instance,
the requests for bank information sent by the Mexican competent authority to
the banks expressly cited the treaty as the reason for the request and Mexico
had no problem in securing the information.
Compulsory powers (ToR B.1.4)
247. Jurisdictions should have in place effective enforcement provisions to
compel the production of information.
248. As noted above, non-compliance with requests to provide informa-
tion to the SAT can be sanctioned. In addition, when taxpayers, or parties
jointly and severally liable with them or third parties related to them, physi-
cally oppose or obstruct the execution of SATs powers, the latter may take
any of the following enforcement actions (Art. 40 CFF):
request the assistance of law enforcement agencies;
impose a fine in accordance with the CFF; or
seize property of the taxpayers goods or business.
249. For the above purposes, federal judicial authorities and law enforce-
ment or police agencies must provide timely support when so requested
by the tax authorities and must take necessary measures so that the tax
authorities may enter the fiscal domicile, establishments, branches, prem-
ises, fixed or semi-fixed establishments, places for storage of merchandise
and, in general, any premises or establishment that may be used to conduct
the taxpayers activities, to begin or continue the relevant review procedure
(Art. 40(3)). The tax administration does not itself have the power to search
private homes or other premises not used for business purposes.
In practice
250. During the period under review, Mexico imposed fines to taxpayers
that failed to provide the information requested by the EOI authorities within
the timeframe given in the notice. Fines were applied in relation to seven of
the 74 requests received by Mexico during the review period i.e. 9% of
the total requests. In total, thirteen fines were applied (under Article 85(I),
CFF) ranging from MXN 13 720 (USD 1 029) to MXN 41 170 (USD 3 088).
In some cases, the same taxpayer has been fined more than once, as it has
failed to comply with the first and the second notice for provision of informa-
tion. In relation to five of the seven cases where penalties have been applied,
such penalties were sufficient to compel the relevant persons to provide the
requested information. In relation to the two other cases, the provision of
information is still pending, although Mexico has already performed exten-
sive investigation in relation to these cases. Mexico is currently evaluating the
course of action to take in these cases.
251. The Mexican competent authority reports that, during the period
under review, it was not required to apply more forceful enforcement meas-
ures (such as seizure or the support of law enforcement agencies to search
the taxpayer premises), as taxpayers have always co-operated with the EOI
authorities (i.e. taxpayers have not refused to provide information). The use
of such measures was therefore not required.
Secrecy provisions (ToR B.1.5)
Bank secrecy
252. Several acts regulating the Mexican financial industry include con-
fidentiality provisions. These provisions are included in the LIC for banks
as well as entities in the retirement savings, insurance and bonds sector; the
Securities Market Act (Ley del Mercado de Valores LMV) for brokerage
firms and for security deposit institutions. However, all of these provisions
have explicit exemptions regarding the tax administrations access to such
information (Art. 117(1 and 3) LIC, Arts. 192(1) and 295(1) LMV). Further,
as noted above, since 2009 the CFF specifically provides that the tax admin-
istration can access information regarding deposits, services, trusts or any
other type of transactions directly from entities within the financial industry
(Arts. 32-B CFF) or, with regards to credit institutions, also via the CNBV
(Art. 117(5) LIC). In practice, as mentioned in section B.1.1 of this report,
bank secrecy was lifted in all instances where the Mexican tax authorities
requested bank information via the CNBV.
Professional privileges
253. The professional privilege is regulated both in the civil codes and
penal codes of Mexico. The legislation in the Federal District states, based
on Article 5 of the Constitution, that all professionals (lawyers, tax advisors,
accountants, technical consultants, etc.) are required to maintain confidenti-
ality of the matters entrusted to them by their clients, except for the reports
that the respective laws establish as mandatory (Art. 36 Regulations of
Article 5 of the Constitution with respect to the exercise of professions in the
Federal District). The Mexican authorities advise that legislation in each State
is consistent regarding this issue and that the term mandatory report refers
to documents such as statutory audit reports.
254. Breach of professional secrecy is a criminal act if the disclosure
caused harm to the interested party and it is made without consent and with-
out a legitimate reason. Penalties can be fines, suspension of authorisation to
practice as a professional for up to one year and up to five years imprison-
ment (Art. 210 and 211 Federal Penal Code (Cdigo Penal Federal CPF)).
Additionally, for criminal procedures, the Federal Penal Procedure Code
provides in Article 243Bis section I that when called as a witness, a lawyer,
technical consultant or public notary will not be obligated to make a decla-
ration on the information they receive, have knowledge of or have in their
power [] with respect to matters in which they have been involved, when
the information they have must be reserved to practice their profession.
52

Thus, in criminal cases, no legal privilege applies if a lawyer holds infor-
mation due to activities as a nominee shareholder, trustee, settlor, company
director or under a power of attorney to represent a company in its business
affairs. The Mexican authorities advise that this is also the case with regards
to administrative tax cases where, in any case, a general exemption based on
the principle of legal justification applies, see below.
255. The Mexican tax authorities advise that the professional privilege
stated in the previously mentioned Art. 36 of the Regulations of Article 5
52. Translation provided in FATF Mutual Evaluation Report 2008, www.fatf-gafi.
org/dataoecd/31/45/41970081.pdf, paragraph 692.
of the Constitution, and consequently the described criminal sanctions in
the above paragraph, do not apply in cases where the tax administration, for
domestic or EOI purposes, requests information based on Article 42 CFF, see
next paragraph. Such access to information would be considered to be in the
interest of society and, according to Article 6 of the Regulation of Article 5 of
the Constitution, such interest prevails over the interests of the professional.
256. For tax purposes, Mexican tax legislation specifically provides SAT
with the power to access reports prepared by certified public accountants on
taxpayers financial statements (Art. 42(IV) CFF) as well as documents and
information from persons with notary functions which they have obtained in
performing their duties (Art. 42(VII)). There are no provisions in Mexican
tax law specifically addressing access to information held by lawyers, tax
advisors etc. On the other hand, the previously presented general access
powers, in particular Article 42(II), do not include any exemptions for cer-
tain professions. Mexican authorities advise that these general powers apply
to all persons and information held by them, regardless of their profession
provided the request for information is founded and motivated
53
. Further,
under the concept of legal justification, providing information subject to
confidentiality is not a criminal offence if there was a legal justification. A
request for information from the tax administration is considered to be such
a legal justification. Although there may appear to be a conflict between this
interpretation and Article 243 of the penal code, the Mexican authorities have
stated that there is no case law questioning their powers to access informa-
tion held by specific professionals, that information that is arguably subject
to professional privilege is obtained in practice and that the professional
privilege has never been claimed in an investigation where information was
being collected for EOI purposes.
257. In conclusion, Mexican legislation includes a general requirement
for all types of professionals to keep information entrusted to them by their
clients as confidential. With two exceptions regarding certain information
held by accountants and notaries, there are no provisions in the tax law
specifically allowing the tax administration to access information held by
professionals. However, the general access powers in the Mexican tax legisla-
tion combined with the concept of legal justification seem to provide access
to information in all relevant cases. The Mexican authorities are not aware of
any existing case law concerning the scope of the attorney-client privilege or
other professional privileges in Mexico. Moreover, the attorney-client privi-
lege/ or other professional privileges have never been claimed in Mexico in
53. Founded means that the requirement should present all the legal articles appli-
cable to the case. Motivated means that a description of the circumstances that
gave rise to the application of the law should always be presented in conjunction
with the founded concept.
order not to provide information to the tax authorities, whether in relation to
EOI cases or cases related to domestic taxation. Nevertheless, Mexico should
monitor this to ensure that in all cases information is obtained for exchange
of information in tax matters.
Phase 2 rating
Largel y Compli ant
Factors underl ying
recommendati ons Recommendati ons
Mexico has broad powers to access
bank information which were
consistently used for EOI purposes
during the review period. Access and
response times in relation to a number
of requests for bank information
exceeded six months and in some
cases one year; and were considered
not timely. Mexico has also recently
amended its law providing for direct
access to banking information, but it
has not been yet tested in practice.
Mexico should monitor the new law
providing for direct access to bank
information and use all its access
powers for bank information as
efficiently as possible so that bank
information can be exchanged in a
timely manner.
B.2. Notification r equir ements and r ights and safeguar ds
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.
Not unduly prevent or delay exchange of information (ToR B.2.1)
258. The Terms of Reference provides that rights and safeguards should
not unduly prevent or delay effective exchange of information. For instance,
notification rules should permit exceptions from prior notification (e.g. in
cases in which the information request is of a very urgent nature or the
notification is likely to undermine the chance of success of the investigation
conducted by the requesting jurisdiction).
259. The Mexican authorities advise that under Mexican domestic law
there is no obligation for the Mexican authorities to give notice to the person
who is the object of a request for information made by another jurisdictions
competent authority. As a consequence, the domestic law of Mexico does not
contain a disposition that allows the person who is the object of a request for
information to oppose and appeal such request and exchange. Further, a tax-
payer or third party information holder can only appeal procedural errors, not
the request for information as such. The Mexican competent authority reports
that no such appeals have ever been filed in the context of EOI.
260. The peer input received confirms that rights and safeguards have not
unduly prevented or delayed effective EOI.
Phase 2 rating
Compli ant
COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION 83
C. Exchanging Infor mation
Over view
261. Jurisdictions generally cannot exchange information for tax purposes
unless they have a legal basis or mechanisms for doing so. A jurisdictions
practical capacity to effectively exchange information relies both on having
adequate mechanisms in place as well as an adequate institutional frame-
work. This section of the report assesses Mexicos network of exchange of
information (EOI) agreements against the standards and the adequacy of
its institutional framework to achieve effective exchange of information in
practice. In Mexico, the legal authority to exchange information is derived
from tax information exchange agreements after the same are ratified by the
Congress. These agreements hold the status of domestic law.
262. Mexico has a considerable network of bilateral agreements that
provide for exchange of information in tax matters. This network currently
covers 72 jurisdictions through 57 double tax conventions (DTCs) as well
as 17 tax information exchange agreements (TIEAs).
54
All agreements are
in force with the exception of four DTCs, three Protocols to a DTC and
four TIEAs, the vast majority of which were signed post-2012. Moreover,
on 1 September 2012, the OECD/Council of Europe Convention on Mutual
Administrative Assistance in Tax Matters and its protocol (the Multilateral
Convention) entered into force in Mexico. The Multilateral Convention allows
54. The 17 TIEAs include an agreement with the United States with which Mexico
also has DTCs. Also, following the dissolution of the Netherlands Antilles on
10 October 2010, two separate jurisdictions were formed (Curaao and Saint
Maarten) with the remaining three islands (Bonaire, St. Eustatius and Saba)
joining the Netherlands as special municipalities. The TIEA concluded with the
Kingdom of the Netherlands, on behalf of the Netherlands Antilles, will continue
to apply to Curaao, Sint Maarten and the Caribbean part of the Netherlands
(Bonaire, St. Eustatius and Saba) and will be administered by Curaao and
St. Maarten for their respective territories and by the Netherlands for Bonaire,
St. Eustatius and Saba. Thus, Mexico has TIEAs with 16 jurisdictions.
84 COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
Mexico to exchange information with 79 jurisdictions (provided that they
have ratified the convention as well). Mexicos EOI agreements cover its
major trading partners and the majority of the Global Forum members as well
as 23 EU and 31 OECD member jurisdictions. In total, Mexico can exchange
information with 93 jurisdictions. Mexico has not refused to enter into an
EOI agreement with any Global Forum member seeking to do so.
263. Only one of Mexicos agreements (with Switzerland) does not meet
the international standard, because of an issue concerning the obligations for
certain identity information to be included in EOI requests. However, Mexico
and Switzerland are both signatories of the Multilateral Convention and this
convention has already entered into force in Mexico. It will therefore become
possible to exchange of information to the standard under this convention
once it is also ratified by Switzerland.
264. There is no distinction drawn in Mexicos agreements between civil
and criminal tax matters, and no dual criminality conditions apply. There are
no restrictions in its EOI provisions that would prevent Mexico from provid-
ing information in a specific form, as long as this is consistent with its own
administrative practices. All EOI articles in Mexicos DTCs and its domestic
legislation also contain relevant confidentiality provisions. In addition, all
of Mexicos agreements ensure that the parties are not obliged to provide
information that would disclose any trade, business, industrial, commercial or
professional secret or information the disclosure of which would be contrary
to public policy.
31 December 2012), Mexico has received 74 incoming requests on direct
taxation matters from 15 jurisdictions. Sixty per cent of the requests were
received from Mexicos main trading partner, the United States. Mexico
answered 30% of the requests within 90 days, 54% within 180 days and 80%
within one year. Eleven per cent of the requests were replied to after one year
had elapsed and 3% of the requests were still pending at the time of the on-
site visit (6 December 2013). In relation to five EOI requests, Mexico was not
able to provide the specific information requested by the foreign jurisdictions;
however, most of these cases refer to individuals and corporations that did not
appear to have a presence in Mexico (more details in section C.5.1). Mexico
also uses EOI as a tool in its tax audits and investigation. During the period
under review, it has sent 364 outbound requests (110 in 2010, 113 in 2011 and
141 in 2012).
266. Mexicos EOI team is made up of eight full-time officials including
two managers with more than 20 years of experience with EOI. The work
of the EOI Team is overseen by the Head of International Tax Audits who
also has solid EOI experience. The EOI team manages all steps of the EOI
process, from the receipt and review of the requests from the collection of
information and the reply to the foreign authorities. The officials are all tax
auditors and have full information gathering powers and can directly access
information from taxpayers and information holders (including a number of
government agencies in Mexico that hold information that is relevant for EOI)
as well as access the comprehensive databases maintained by Mexicos tax
authority. This centralised approach ensures that information is collected in a
timely fashion by experienced auditors, allowing Mexico to reply to requests
in a complete and accurate manner, while at the same time protecting the
confidentiality of taxpayers, as a minimum number of persons is involved in
the processing of an EOI request. In Mexico the same processes are involved
in order to reply to a request pursuant to a DTC, TIEA or the Multilateral
Convention.
as professional, knowledgeable and dedicated to the exchange of information
process. Peers also acknowledged the responsiveness and accessibility of the
Mexican competent authority. In most cases (except in a few cases related
to access to bank information), the peers reported that information has been
received in full, in the form requested and in a timely manner.
C.1. Exchange-of-infor mation mechanisms
Exchange of information mechanisms should allow for effective exchange of information.
268. Mexico can exchange information with partners in accordance
with 57 double taxation agreements (DTCs) as well as TIEAs. All agree-
ments are in force with the exception of five DTCs, three protocol to a DTC
and four TIEAs which are in various stages of ratification in either or both
jurisdictions.
55
269. In addition, on 27 May 2010 Mexico signed the joint COE/OECD
Convention on Mutual Administrative Assistance in Tax Matters (the
Multilateral Convention) and its amending Protocol.
56
The Multilateral
Convention provides for all possible forms of administrative co-operation
between states in the assessment and collection of taxes, in particular
with a view to combating tax avoidance and evasion. Its protocol brings
the Multilateral Convention in line with the international standard for
EOI. On 23 May 2012, Mexico deposited the instrument of ratification of
55. The DTCs with Venezuela (1997), United Arab Emirates (2012), Malta (2012),
Turkey (2013) and Costa Rica (2014); and the TIEAs signed in 2012 and 2013
with Aruba, Gibraltar, Liechtenstein and Saint Lucia.
56. The Mexican authorities advise that 22 November 2011 the Senate approved
Mexicos signing of the convention and the instruments and the act was pub-
lished in the Federal Official Gazette 13 February 2012.
Multilateral Convention and its Protocol, which entered into force in Mexico
on 1 September 2012. Under this agreement Mexico will be able to exchange
information to the standard with a further 21 jurisdictions.
57
270. All of the TIEAs signed by Mexico use language akin to the 2002
Model Agreement on Exchange of Information in Tax Matters. Similarly,
it is Mexican policy to include the latest version of Article 26 of the OECD
Model Tax Convention in all its new DTCs and Mexico would normally
seek to include this in any Protocol to existing DTCs that are being rene-
gotiated. Further, Mexico interprets all of its older treaties, even if they use
language that predates the language used in Article 26 of the 2005 Model Tax
Convention, subject to reciprocity as providing for information exchange
to the standard. Though, no formal notice of such interpretation has been
sent to treaty partners. However, SAT has issued Regulation I.2.1.1. This
regulation includes a list of jurisdictions with which Mexico has a treaty that
includes an EOI provision that does not use the language of the 2005 OECD
Model Tax Convention but which nevertheless provide information in accord-
ance to standard. Based on the principle of reciprocity, Mexico on its side will
exchange the same types of information.
271. Deficiencies have been identified regarding the agreement with
Switzerland. This agreement is not fully in line with the international standard
because it requires the requesting EOI partner to provide certain identity infor-
mation in its EOI requests. Switzerland is taking steps to bring the agreement
into line with the standard and negotiations between Mexico and Switzerland
are progressing. Moreover, since Mexico and Switzerland are signatories to
the Multilateral Convention, exchange of information to the standard can take
place under this convention once it is ratified by Switzerland.
272. In addition to exchanging information upon request, Mexico currently
exchanges information on an automatic basis with a number of treaty partners
on a reciprocal basis. Information exchanged automatically includes informa-
tion on dividend income, interest income, royalties, capital gains, salaries,
wages and similar remuneration, directors fees and similar payments, income
by artists and sportsmen, pension and similar remuneration, other income,
commissions and similar payments. Mexico exchanges information in an
encrypted format using the OECD Standard Magnetic Format. The legal basis
for the exchange is the DTCs, TIEAs and the Multilateral Convention. Mexico
has also announced its intention to further engage in automatic exchange with
Chile, Colombia and Peru, in the context of the Pacific Alliance.
57. Albania, Andorra, Anguilla, Argentina, Croatia, Faroe Islands, Georgia, Ghana,
Greenland, Guatemala, Kazakhstan, Moldova, Montserrat, Morocco, Nigeria,
San Marino, Saudi Arabia, Slovenia, Tunisia, Turks and Caicos Islands and
British Virgin Islands.
273. More than half of Mexicos EOI activity takes place with its main
trading partner, the United States of America. The United States and Mexico
share a border of nearly 2 000 miles with extensive trade in additional to their
historical ties. Mexico enjoys an excellent working relationship with its main
EOI partner, as confirmed by peer input.
Foreseeably relevant standard (ToR C.1.1)
274. The international standard for exchange of information envisages
information exchange on request to the widest possible extent. Nevertheless it
does not allow fishing expeditions, i.e. speculative requests for information
that have no apparent nexus to an open inquiry or investigation. The balance
between these two competing considerations is captured in the standard
of foreseeable relevance which is included in Article 26(1) of the OECD
Model Tax Convention:
The competent authorities of the Contracting States shall
exchange such information as is foreseeably relevant for carrying
out the provisions of this Convention or to the administration or
enforcement of the domestic laws concerning taxes of every kind
and description imposed on behalf of the Contracting States,
or of their political subdivisions or local authorities, insofar as
the taxation thereunder is not contrary to the Convention. The
exchange of information is not restricted by Articles 1 and 2.
275. Thirty of Mexicos DTCs provide for the exchange of information if
it is foreseeably relevant and 27 provide for exchange if it is necessary for
carrying out the provisions of the DTC or the administration and enforcement
of the domestic tax laws of the requesting jurisdiction.
58
Fifteen of Mexicos
TIEAs provide for the exchange of information that is foreseeably relevant
and one (Bermuda) if it is relevant for carrying out the provisions of the
TIEA or the administration and enforcement of the domestic laws of the
parties. While the TIEA with the United States, simply states that the com-
petent authorities shall exchange information to administer and enforce the
domestic laws of the Contracting States, EOI with this jurisdiction is also
covered by a DTC that does allow for exchange of all foreseeably relevant
information.
58. The term necessary is recognised in the commentary to Article 26 of the
OECD Model Tax Convention to allow for the same scope of exchange as
does the term foreseeably relevant. See Article 1 of the OECD Model TIEA,
para. 5.4 of the Revised Commentary (2008) to Article 26 of the UN Model
Convention and para. 9 of the Commentary to Article 26 of the OECD Model
Convention.
276. The protocol amending the Mexico-Austria DTC requires that the
name and address of the person in possession of the requested information in
Austria must be provided in the incoming request. This restriction does not
conform to the standard, as the international standard requires only that the
jurisdiction provide the identity of the person under examination or inves-
tigation (see Article 5(5) of the OECD Model TIEA and its Commentary).
On 10 February 2012, Mexico and Austria concluded a memorandum of
understanding with the result that the requirement now is that the requesting
jurisdiction provides the name and address of any person believed to be in
possession of the requested information only to the extent known.
277. The treaty with Panama contains the language of Article 5 of the
OECD Model TIEA. However, its Protocol states that the requesting State
shall provide the name and fiscal domicile of the person under investiga-
tion. This restriction does not conform to the standard, as the international
standard requires only that the jurisdiction provide the identity of the person
under examination or investigation. The Protocol further states that the
requesting State shall provide the name and address of the person believed
to be in possession of the information, without including the qualifying
phrase to the extent known found in the OECD Model Convention. This
requirement also restricts the exchange of information and does not conform
to the international standard. Finally, the Protocol contains a provision that
provides that exchange of information does not include measures (1) aimed
only at the simple collection of pieces of evidence or (2) measures when it
is improbable that the requested information will be relevant for control-
ling or administering tax matters of a given taxpayer in a Contracting State
(fishing expeditions). On 6 June 2012, Mexico and Panama concluded a
memorandum of understanding to bring the Protocol in line with the inter-
national standard. The memorandum of understanding contains provisions
whereby the requested state waives: (i) the requirement to provide the name
and fiscal domicile of the person under examination or investigation and
(ii) the requirement to provide the name and address of any person believed
to be in possession of the requested information, if they are not known. The
memorandum of understanding also clarifies that the expression foresee-
ably relevant contained in the Mexico-Panama treaty shall be interpreted
in accordance with paragraph 5 of the commentary to Article 26 of the 2010
OECD Model Tax Convention.
278. The Mexico-Switzerland DTC includes provisions in its Protocol
requiring the requesting party to provide the name and address of the tax-
payer and the name and address of the holder of information when making
an EOI request. These requirements are inconsistent with the international
standard. However, Switzerland is taking steps to bring the agreement into
line with the standard. In addition, Switzerland is also a signatory of the
Multilateral Convention, and EOI to the standard will take place once this
convention is ratified by Switzerland.
279. The TIEA with Bermuda provides (a) that a senior official of the
competent authority of the applicant party shall certify that the request is
relevant to, and necessary for, the determination of the tax liability under the
laws of the Applicant Party (Art. 6(7)). The Mexican authorities advise that
the use of the words tax liability in this provision does not limit the purposes
set out in Article 1 of the agreement, and for instance does not prevent EOI
relevant to the collection of tax, or the investigation or prosecution of tax
matters. Further, under this agreement, the applicant party must provide
information to demonstrate why the requested information is relevant to the
determination of the tax liability of a taxpayer (Art. 6(8)). The requirement
to certify the relevance of the request is additional to the requirements of the
OECD Model TIEA. It is also noted that under this agreement a requested
party is under no obligation to provide information which relates to a period
more than six years prior to the tax period under consideration (Art. 6(5)(ii)).
280. Under Article 4(5) of the TIEA with the Bahamas, the requesting
party must specify the reasons for believing that the information requested
is foreseeably relevant to tax administration and enforcement of the request-
ing Party. This provision creates a requirement for establishing a valid
request which is in addition to those set out in Article 5(5) of the OECD
Model TIEA. However the variation appears to be in line with the purpose
of the requirements in Article 5(5) of the OECD Model TIEA, which is to
demonstrate the foreseeable relevance of the information sought.
281. During the period under review, the Mexican competent authority
reports receiving no requests which raised doubts in terms of their foresee-
able relevance. Mexico has not declined to reply a request on the basis that it
was not foreseeably relevant and asked no clarification from its treaty part-
ners in this regard.
In respect of all persons (ToR C.1.2)
282. For exchange of information to be effective it is necessary that
the obligation to provide information is not restricted by the residence or
nationality of the person to whom the information relates or by the resi-
dence or nationality of the person in possession or control of the information
requested. For this reason the international standard for exchange of informa-
tion envisages that EOI mechanisms will provide for exchange of information
in respect of all persons.
283. The DTC with Barbados indicates that certain entities receive the
benefits of the DTC other than the benefits of enumerated articles (divi-
dends, interest, royalties, etc.). As exchange of information is not a benefit,
information on the exempted companies will be exchanged and this provision
does not limit EOI.
Obligation to exchange all types of information (ToR C.1.3)
284. Jurisdictions cannot engage in effective exchange of information if
they cannot exchange information held by financial institutions, nominees
or persons acting in an agency or a fiduciary capacity, as well as owner-
ship information. Both the OECD Model Convention (Article 26(5)) and the
OECD Model TIEA (Article 5(4)), which are primary authoritative sources of
the standards, stipulate that bank secrecy cannot form the basis for declining
a request to provide information and that a request for information cannot be
declined solely because the information is held by nominees or persons acting
in an agency or fiduciary capacity or because the information relates to an
ownership interest.
285. All of Mexicos TIEAs explicitly provide for exchange of the types of
information mentioned above, including bank information, as they all include
Article 5(4) of the Model TIEA or a provision akin to it. Further, all 33 DTCs,
except for the DTC with Latvia, signed or amended post-May 2006 include
the wording of Article 26(5) of the OECD Model Tax Convention
59
, stating
that a contracting state may not decline to supply information solely because
the information is held by a bank, other financial institution, nominee or
person acting in an agency or a fiduciary capacity or because it relates to
ownership interests in a person
286. None of the 24 DTCs
60
Mexico signed or updated before June 2006
and the DTC with Latvia include language akin to Article 26(5). One of
jurisdictions in this group (the United States) has a TIEA with Mexico which
includes the necessary language. The United States and another 22 out of
these 26 jurisdictions
61
are also covered by an agreement fully to standard
59. Austria, Bahrain, Belgium, Barbados, Canada, Colombia, Costa Rica, Estonia,
Germany, Hong Kong (China), Hungary, Iceland, India, Indonesia, Italy, Kuwait,
Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Panama, Peru,
Qatar, Singapore, South Africa, Switzerland, Turkey, Ukraine, United Arab
Emirates, the United Kingdom and Uruguay.
60. Australia, Brazil, Chile, China, the Czech Republic, Denmark, Ecuador, Finland,
France, Greece, Ireland, Israel, Japan, Korea (Republic of), Norway, Poland,
Portugal, Romania, the Russian Federation, the Slovak Republic, Spain, Sweden,
the United States and Venezuela.
61. Australia, Brazil, Chile, China, Czech Republic, Denmark, Finland, France,
Greece, Ireland, Japan, Korea (Republic of), Latvia, Norway, Poland, Portugal,
Romania, the Russian Federation, Slovakia, Spain and Sweden.
in this respect once the Multilateral Convention enters into force between
Mexico and these jurisdictions.
287. The above leaves three jurisdictions
62
with which Mexico have not
signed a bilateral or multilateral agreement that includes language akin to
Article 26(5). However, the absence of this provision does not automati-
cally create restrictions on the exchange of information held by banks, other
financial institutions, nominees, agents and fiduciaries, as well as owner-
ship information.
63
Mexicos domestic laws allow it to access information
referred to in Article 26(5) even in the absence of such a provision in the
DTC. However, exchange will be subject to reciprocity (Art. 7(IV) LSAT)
and there may be domestic limitations in place in the laws of some of these
partners.
64
Mexico should therefore continue its programme of renegotiating
its older treaties in order to incorporate wording in line with Article 26(5) of
the OECD Model Tax Convention.
288. During the period under review, Mexico had no issues to exchange
bank information with its treaty partners (with exception to delays, as already
reviewed under section B.1 of this report).
Absence of domestic tax interest (ToR C.1.4)
289. The concept of domestic tax interest describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes. A
refusal to provide information based on a domestic tax interest requirement
is not consistent with the international standard. Jurisdictions must be able
to use their information gathering measures even though invoked solely to
obtain and provide information to the requesting jurisdiction. This is specifi-
cally stated in both the OECD Model Convention (Art. 26(4)) and the OECD
Model TIEA (Art. 5(2)).
62. Ecuador, Israel and Venezuela.
63. The Commentary to Article 26(5) indicates that while paragraph 5 represents a
change in the structure of the Article, it should not be interpreted as suggesting
that the previous version of the Article did not authorise the exchange of such
information.
64. Nineteen of the 25 jurisdictions with DTCs that do not include Article 26(5) have
already been reviewed by the Global Forum (Australia, Brazil, Chile, China,
the Czech Republic, Denmark, France, Greece, Ireland, Israel, Japan, Korea,
Norway, Poland, Portugal, the Russian Federation, Slovakia Spain and Sweden).
No relevant limitations have been identified within the legislation of these
jurisdictions.
290. All TIEAs signed by Mexico include language equal to or akin to
Article 5(2) of the Model TIEA. Further, all 33 DTCs
65
Mexico signed or
amended post-May 2006 include the wording of Article 26(4) of the OECD
Model Tax Convention. In addition the DTC with the Russian Federation
includes language akin to this paragraph of the Model DTC.
291. Twenty-four DTCs
66
signed or updated by Mexico before June 2006
do not include a wording akin to Article 26(4). However, here too, EOI with
the United States is also covered by a TIEA that includes the necessary provi-
sion. Further, EOI with the United States and another 21 jurisdictions
67
out
of the 26 will also be covered by an agreement fully to standard once the
Multilateral Convention enters into force between Mexico and these jurisdic-
tions. Finally, none of the remaining DTCs include a provision specifically
requiring a domestic tax interest.
292. A domestic tax interest requirement may exist in some of Mexicos
partners domestic laws
68
. In such cases, the absence of a provision requiring
exchange of information unlimited by domestic tax interest will serve as a
limitation on the exchange of information which can occur under the relevant
agreement. Thus Mexico should continue its programme of renegotiating
older treaties in order to incorporate wording in line with Article 26(4) of the
OECD Model Tax Convention.
293. In practice, Mexico did not have issues to access and exchange infor-
mation in relation to which it did not have a domestic tax interest.
65. Austria, Bahrain, Belgium, Barbados, Canada, Colombia, Costa Rica, Estonia,
Germany, Hong Kong (China); Hungary, Iceland, India, Indonesia, Italy, Kuwait,
Latvia, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Panama,
Peru, Qatar, Singapore, South Africa, Switzerland, Turkey, Ukraine, United Arab
Emirates, the United Kingdom and Uruguay.
66. Australia, Brazil, Chile, China, the Czech Republic, Denmark, Ecuador, Finland,
France, Greece, Ireland, Israel, Japan, Korea (Republic of), Norway, Poland,
Portugal, Romania, the Russian Federation, the Slovak Republic, Spain, Sweden,
the United States and Venezuela.
67. Australia, Brazil, Chile, China, the Czech Republic, Denmark, Finland,
France, Greece, Ireland, Japan, Korea (Republic of), Norway, Poland, Portugal,
Romania, the Russian Federation, Slovakia, Spain and Sweden.
68. Nineteen out of the 24 jurisdictions that do not include Article 26(4) and are not
covered by a TIEA to the standard have already been reviewed by the Global
Forum (Australia, Brazil, Chile, China, Czech Republic, Denmark, France,
Greece, Ireland, Israel, Japan, Korea (Republic of), Norway, Poland, Portugal,
the Russian Federation, Slovakia, Spain and Sweden). No relevant limitations
have been identified within the legislation of these jurisdictions.
Absence of dual criminality principles (ToR C.1.5)
294. The principle of dual criminality provides that assistance can only be
provided if the conduct being investigated (and giving rise to an information
request) would constitute a crime under the laws of the requested country if
it had occurred in the requested country. In order to be effective, exchange of
information should not be constrained by the application of the dual criminal-
ity principle.
295. There are no such limiting dual criminality provisions in any of
Mexicos bilateral or in its multilateral agreements, and in practice no issue
linked to dual criminality has arisen.
Exchange of information in both civil and criminal tax matters
(ToR C.1.6)
296. Information exchange may be requested both for tax administration
purposes and for tax prosecution purposes. The international standard is not
limited to information exchange in criminal tax matters but extends to infor-
mation requested for tax administration purposes (also referred to as civil
tax matters). Mexico provides assistance at the administrative level when
the requested information relates to a criminal tax matter in the requesting
jurisdiction. Mexico will, on request, give as much priority to such cases as
possible.
297. All of Mexicos EOI agreements provide for exchange of information
in both civil and criminal tax matters. Mexico reports that processes involved
in the collection of information are the same regardless of whether the request
involved civil or criminal investigation.
Provide information in specif ic form requested (ToR C.1.7)
298. In some cases, a Contracting State may need to receive information
in a particular form to satisfy its evidentiary or other legal requirements.
Such forms may include depositions of witnesses and authenticated copies
of original records. Contracting States should endeavour as far as possible to
accommodate such requests. The requested State may decline to provide the
information in the specific form requested if, for instance, the requested form
is not known or permitted under its law or administrative practice. A refusal
to provide the information in the form requested does not affect the obligation
to provide the information.
299. There are no restrictions in the EOI provisions in Mexicos agree-
ments that would prevent Mexico from providing information in a specific
form, as long as this is consistent with its own administrative practices.
Indeed, some of Mexicos agreements include specific clauses to reinforce
the need to provide information in the form requested. Though, the TIEA
concluded with Bermuda only provides for the applicant party to specifically
request that information be provided in the form of authenticated copies of
original records (Art. 5(3)).
300. In practice, no particular problems were raised by peers regarding the
form in which the information was exchanged. Moreover, peers recognised
that Mexico was able to provide information in the form requested including
authenticated copies of original documents.
301. Mexico has entered into memoranda of understanding with certain
treaty partners to regulate issues such as the provision of official translations
and the incurrence of extraordinary costs. On one occasion, the volume of a
response to an EOI case exceeded 10 000 pages; therefore it was important
that the parties could agree on how to share the costs of translation and deliv-
ery of the documentation.
In force (ToR C.1.8)
302. Exchange of information cannot take place unless a jurisdiction has
EOI arrangements in force. Where such arrangements have been signed, the
international standard requires that jurisdictions must take all steps necessary
to bring them into force expeditiously.
303. All of Mexicos agreements are in force with the exception of the
following instruments which are in various stages of ratification in either or
both jurisdictions:
DTCs with Venezuela (1997), Malta (2012), United Arab Emirates
(2012), Turkey (2013) and Costa Rica (2014)
69
;
protocol to DTC with Italy (2011)
70
, Belgium (2013) and Indonesia
(2013); and
TIEAs signed in 2012 and 2013 with Aruba, Gibraltar, Liechtenstein
and Saint Lucia
71
.
304. EOI agreements are entered into by the Government, signed by the
Mexican President, and are then submitted to the Senate for ratification
(Arts. 76(I), 89(X) and 133 CPEUM). Once the agreement is approved, the
President signs the instrument of ratification and the other contracting party
69. The DTCs with Malta and the United Arab Emirates have been ratified by
Mexico.
70. The Protocol with Italy and Belgium have been ratified by Mexico.
71. All these TIEAs other than the one with Saint Lucia have been ratified by the
Mexican Senate.
is informed about the completion of the Mexican internal ratification proce-
dures. Once both jurisdictions have ratified the agreement, it is published in
the Federal Official Gazette. In practice, since 2013, the Senate has been per-
forming a more detailed review of the economic impact of tax treaties during
the process of ratification (for instance, information on the investment flows
from and to the treaty partner needs to be provided to the senators). This has
not cause any delays in the ratification process.
305. For the large majority of agreements, ratification by Mexico has
occurred within 12 months of signing. Indeed, the majority of Mexicos
agreements were ratified in less than 8 months and entered into force less
than 18 months after signing. Mexicos 12 agreements (including protocols)
not yet in force were, with two exceptions (DTC with Venezuela and Protocol
to the DTC with Italy), signed in 2012 or later. The agreements not yet ratified
are in various stages of the ratification process. Mexico has ratified seven of
the 12 agreements (Protocols to DTCs with Belgium and Italy; DTCs with
Malta and the United Arab Emirates; and the TIEAs with Aruba, Gibraltar
and Liechtenstein) not yet in force and is awaiting ratification by the other
jurisdiction. In relation to the DTC signed with Venezuela in 1997, there was
a disagreement between the parties concerning certain clauses. There has
not been yet an agreement concerning the start of the renegotiation of the
agreement.
In effect (ToR C.1.9)
306. For information exchange to be effective, the parties to an EOI
arrangement need to enact any legislation necessary to comply with the
terms of the arrangement. As outlined in Part B of this report, Mexicos
DTCs and TIEAs have been given effect in domestic law by means of the Tax
Administration Service Act and the Federal Tax Code.
Phase 2 rating
Compli ant .
C.2. Exchange-of-infor mation mechanisms with all r elevant par tner s
The jurisdictions network of information exchange mechanisms should cover
all relevant partners.
307. Ultimately, the international standard requires that jurisdictions
exchange information with all relevant partners, meaning those partners
who are interested in entering into an information exchange arrangement.
Agreements cannot be concluded only with counterparties without economic
significance. If it appears that a jurisdiction is refusing to enter into agree-
ments or negotiations with partners, in particular ones that have a reasonable
expectation of requiring information from that jurisdiction in order to prop-
erly administer and enforce its tax laws it may indicate a lack of commitment
to implement the standards.
308. Mexicos network of signed bilateral and multilateral agreements
encompasses a wide range of counterparties:
26 of the 28 EU jurisdictions
72
;
all the other 33 OECD countries;
all of its 10 primary trading partners
73
except for Chinese Taipei;
all G20 jurisdictions; and
86 Global Forum member jurisdictions.
72. Mexico does not have agreements with Bulgaria and Cyprus*.
* Footnote by Turkey: The information in this document with reference to
Cyprus relates to the southern part of the Island. There is no single authority
representing both Turkish and Greek Cypriot people on the Island. Turkey rec-
ognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and
equitable solution is found within the context of the United Nations, Turkey shall
preserve its position concerning the Cyprus issue.
Footnote by all the European Union Member States of the OECD and the
European Union: The Republic of Cyprus is recognised by all members of the
United Nations with the exception of Turkey. The information in this document
relates to the area under the effective control of the Government of the Republic
of Cyprus.
73. Brazil, Canada, China, Colombia, Germany, Italy, Japan, Korea (Republic of),
Chinese Taipei and the United States.
309. Mexico has a full programme of negotiations. It is currently nego-
tiating or has finalised negotiations of DTCs (including protocols) with
11 jurisdictions
74
and TIEAs with three jurisdictions.
75
310. No peers have reported that Mexico declined to establish an EOI
agreement with a jurisdiction seeking the same. Mexicos network of agree-
ments includes DTCs as well as TIEAs.
Factors underl ying
Mexico should continue to develop its
EOI network with all relevant partners.
Phase 2 rating
Compli ant .
C.3. Confidentialit y
The jurisdictions mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received.
Information received: disclosure, use, and safeguards (ToR C.3.1)
311. Governments would not engage in information exchange without the
assurance that the information provided would only be used for the purposes
permitted under the exchange mechanism and that its confidentiality would
be preserved. Information exchange instruments must therefore contain
confidentiality provisions that spell out specifically to whom the information
can be disclosed and the purposes for which the information can be used.
In addition to the protections afforded by the confidentiality provisions of
information exchange instruments, countries generally impose strict confi-
dentiality requirements on information collected for tax purposes.
74. Argentina, Austria, Ireland, Jamaica, Malaysia, Morocco, Oman, Pakistan, Saudi
Arabia, Slovenia and Switzerland.
75. The Marshall Islands, Monaco and Vanuatu.
312. All of the EOI articles in Mexicos DTCs include provisions ensuring
confidentiality of information received. Mexicos TIEAs have confidentiality
provisions modelled on Article 8 of the OECD Model TIEA.
313. Mexican tax law states that tax information is strictly confidential
(Art. 69(1) CFF) and can only be revealed for defined purposes. These
purposes including situations where such disclosure is necessary for the
functions of SAT (including judicial procedures) or disclosure is permit-
ted by another enactment (including EOI arrangements, see Art. 69(6))).
Confidential information submitted by other jurisdictions to Mexico is
categorised as classified (Art. 13(1)(II) Federal Access to Government
Public Information Act (Ley Federal de Acceso a la Informacin Pblica
Gubernamental LFAIPG). Public officials who unduly remove, destroy, dis-
close information or reveal information considered classified or confidential
they have access to, will be sanctioned in accordance with the Federal Law
of Administrative Responsibilities of Public Servants (Art. 63). These sanc-
tions can range from an internal reprimand to ineligibility to hold a position
in public service of up to ten years (Art. 13), including penalties of not less
than what the public official had gained economically from his actions; or
imprisonment of up to seven years (Art. 214 Penal Code).
314. In addition, provisions in Mexicos EOI agreements override contra-
dicting domestic legislation. Therefore Mexicos authorities are required to
keep confidential all information received as part of a request or as part of a
response to a request regardless of any provisions in other laws.
All other information exchanged (ToR C.3.2)
315. Confidentiality rules should apply to all types of information exchanged,
including information provided in a request, background documents to
such requests, and any other documents or communications reflecting such
information.
316. The confidentiality provisions in Mexicos agreements use the stand-
ard language of Article 8 of the OECD Model TIEA and Article 26(2) in
the Model DTC or language comparable to these articles. Thus, they do not
draw a distinction between information received in response to requests and
information forming part of the requests themselves. As such, these provi-
sions apply equally to all requests for information, background documents to
such requests, and any other document reflecting such information, includ-
ing communications between the requesting and requested jurisdictions and
communications within the tax authorities of either jurisdiction. Further, the
confidentiality provisions in Mexicos domestic law do not draw a distinction
between information received in response to requests or information forming
part of the requests themselves. As such, these provisions too, apply equally
to all requests for such information.
In practice
317. Mexico has implemented several practices and procedures to protect
the confidentiality of the information received and exchanged with its treaty
partners, as summarised below:
the members of the EOI teams have full information gathering
powers. Therefore, they have powers to directly gather information
from a taxpayer or information holder without the need to involve
other departments of the tax administration. As such, only a limited
number of officials have access to information connected to an EOI
request;
the notices for the production of information issued by the Mexican
competent authority only contain reference to access powers under
domestic law and to the fact that information is being requested
in the context of an exchange of information request by foreign
authorities under a Convention or Agreement signed by Mexico. No
references to the specific EOI agreement, the requesting jurisdiction,
the foreign competent authority, the background of the request, or
the foreign taxpayer under investigations are included. Naturally, a
reference to the identity of the person that is the subject of the request
is normally included as this information is necessary to locate the
information being requested.
access to the premises of the Mexican tax administration is secured.
The EOI team is housed in one building, where the access by mem-
bers of the public is restricted.
access to the EOI database is restricted to the head of the EOI Team
and his administrative officer;
access to an officers computer is restricted to that person. Access to
SATs institutional databases records the IP of the viewers and the
information being accessed;
the physical EOI files are kept in the office of the head or the sub-
heads of the EOI team under lock. The closed EOI cases are sent
to the archives of the General Administration for Large Taxpayers,
which has its own operating access and confidentiality measures.
Occasionally, the files of some closed cases can be in the offices of
the subheads of the EOI team under lock before they are sent to the
archive;
all documents sent to a foreign Competent Authority or to other
departments of the Mexicos tax administration/ other government
agencies contain a confidentiality notice;
the EOI team is constantly reminded to observe the confidentiality
rules. Every working station of the EOI team contains a printed card
with the confidentiality routines the EOI officers must adopt. The
card also contains reference to the possibility of application of an
administrative procedure against the officer in case the rules are not
being observed.
in 2013, the EOI team joined a course on confidentiality obligations
for public servants.
318. Mexico reports that currently there are six on-going investigations
against tax officials for breach of his/her confidentiality duty. Those offic-
ers are not part of the General Administration for Large Taxpayers, where
the function of competent authority for EOI is vested. There have been no
cases where officers from the EOI Team have been convicted by breach of
confidentiality.
319. No issues regarding the confidentiality of information have been
raised by Mexicos exchange of information partners.
Phase 2 rating
Compli ant .
C.4. Rights and safeguar ds of taxpayer s and thir d par ties
The exchange of information mechanisms should respect the rights and
safeguards of taxpayers and third parties.
Exceptions to requirement to provide information (ToR C.4.1)
320. The international standard allows requested parties not to supply
information in response to a request in certain identified situations. In line
with the standard, in all of Mexicos DTCs and TIEAs, the contracting par-
ties are not obliged to provide information which would disclose any trade,
business, industrial, commercial or professional secret or trade process, or
information the disclosure of which would be contrary to public policy.
321. Professional privilege is not defined in Mexicos DTCs and thus this
term will derive the meaning that it has under the domestic laws of Mexico.
The analysis in section B.1 of this report shows that professional privilege as
defined in Mexican domestic legislation is consistent with the standard.
322. In practice, the professional secrecy was not invoked during the
three-year period under review in the context of EOI. More broadly, no issues
in relation to the rights and safeguards of taxpayers and third parties have
been encountered in practice, nor have they been raised by any of Mexicos
exchange of information partners.
Phase 2 rating
Compli ant .
C.5. Timeliness of r esponses to r equests for infor mation
The jurisdiction should provide information under its network of agreements
in a timely manner.
Responses within 90 days (ToR C.5.1)
323. In order for EOI to be effective, it needs to be provided in a time-
frame which allows tax authorities to apply the information to the relevant
cases. If a response is provided but only after a significant lapse of time the
information may no longer be of use to the requesting authorities. This is
particularly important in the context of international co-operation as cases in
this area must be of sufficient importance to warrant making a request.
324. There are no specific legal or regulatory requirements in place which
would prevent Mexico responding to a request for information by provid-
ing the information requested or providing a status update within 90 days
of receipt of the request. None of Mexicos DTCs require the provision of
request confirmations, status updates or the provision of the requested infor-
mation, within the timeframes foreshadowed in Article 5(6) of the OECD
Model TIEA. However eight out of the nine TIEAs signed by Mexico so far,
do.
76
One TIEA (with The Bahamas) instead provides that the requested Party
76. Bermuda, the Cayman Islands, the Cook Islands, Curaao, Guernsey (in a
Memorandum of Understanding), Jersey (in a Memorandum of Understanding),
shall use its best endeavours to forward the requested information to the
requesting Party with the least possible or least reasonable delay.
31 December 2012), Mexico has received 74 incoming requests on direct
taxation matters from 15 jurisdictions. Mexicos response times are indicated
in the table below:
Response times for r equests* r eceived dur ing 3 year r eview per iod
2010 2011 2012 Total Average
nr. % nr. % nr. % nr. %
Total number of requests received (a+b+c+d+e)
25 100% 19 100% 30 100% 74 100%
Full response**: 90 days 9 36% 5 26% 8 27% 22 30%
180 days (cumulative) 16 64% 7 37% 17 57% 40 54%
1 year (cumulative) (a) 21 84% 16 84% 22 73% 59 80%
>1 year (b) 3 12% 3 16% 2 7% 8 11%
Declined for valid reasons (c) 0 0% 0 0% 0 0% 0 0%
Failure to obtain and provide information requested (d) 0 0% 0 0% 4 13% 4 5%
Requests cancelled by the requesting jurisdiction 1 4% 0 0% 0 0% 1 1%
Requests still pending at end of the review period (e) 0 0% 0 0% 2 7% 2 3%
* Mexico counts each written request from an EOI partner as one EOI request even where more than
one person is the subject of an inquiry and/or more than one piece of information is requested.
** The time periods in this table are counted from the date of receipt of the request to the date on which
the final and complete response was received.
326. Requests that are normally not replied to within 90-days are gen-
erally more complex requests or requests that do not contain sufficient
information to identify the taxpayer. A number of requests concerning bank
information have also been replied in more than 90-days (as analysed in sec-
tion B.1. of this report), including requests where Mexico needed to perform
some further investigation to identify the accountholder. Complex requests
included requests related to complex financial transactions and transfer pric-
ing cases; requests involving multiple audits across the country; requests
covering a great number of taxpayers and different records. Moreover, as also
noted in section B.1 of this report, in some cases, the name of the taxpayer
provided by the foreign authority was not complete (for instance, the maternal
last name which is part of an individuals name was in many occasions not
provided by the requesting jurisdiction). This occasionally causes a problem
the Isle of Man and Sint Maarten.
with the identification of individuals and some more time was needed to be
spent on the process.
327. In relation to four requests, Mexico was not able to provide the
specific information requested by the foreign jurisdictions. The cases are
summarised below:
one request related to a foreign artist, four enterprises related to
him and the fees earned by this artists concerts in Mexico. In that
case, Mexico performed a full investigation, including the review of
databases concerning taxpayer registration, royalty payments, immi-
gration (entry and exit of the country) and the information kept by the
Society of Authors and Composers. Mexicos investigation indicates
that the artist had never visited Mexico. Therefore, the specific infor-
mation requested could not be provided.
in relation to two requests, Mexico could neither identify the tax-
payers in the SAT databases and nor could find any trace of their
presence in Mexico (by consulting the immigration authorities and
other relevant government authorities). Searches were also conducted
in relation to passports, driving licenses, land registry and move-
ments in and out of the country and no trace of the taxpayers was
found.
in relation to one request, Mexico could identify the taxpayer in
SATs database, but it could not locate him at his registered address.
The EOI team visited three addresses to try to locate the taxpayer but
it could not find a trace of him.
328. In all cases mentioned above,, Mexico conducted a full investigation
and, in most cases, provided the requesting jurisdictions with related infor-
mation that assisted them in their ongoing examinations. This was recognised
by Mexicos peers.
329. One request was cancelled by the requesting jurisdiction approxi-
mately one month after receipt without further explanation. In this case,
Mexico has not provided the information requested.
330. Mexico reports that the response to two requests is pending. Those
requests were received in June 2012. Those requests referred to the activities
of certain foreign limited partnerships in Mexico. The foreign authority had
information that persons living in Mexico have connections with these for-
eign limited partnerships. In those cases, the taxpayers in question reported
having no information about the transactions under investigation in the for-
eign jurisdiction. The Mexican competent authority is further investigating
the case.
331. Mexico reports that it occasionally had problems receiving requests
via regular mail. In more than one occasion, requests took more than two
months to be received by the competent authority from the date they were
sent. Moreover, peer input indicates and Mexico confirms that four requests
sent by a treaty partner during the review period have not been received.
The treaty partner re-sent the requests to Mexico after the review period and
Mexico is acting to reply to such requests. Mexico has recently provided par-
tial/ full answers to such requests as confirmed by the requesting jurisdiction.
These requests are not included in the table describing Mexicos response
times as they were received in 2014, after the period under review.
332. Mexico attempts to address the problems with regular mail by
providing its counterparts with all contact information including e-mail
address and telephone number to ensure that requests can be timely received
and actioned upon. Mexico sends the responses to EOI requests by courier,
what is acknowledged by the OECD/ Global Forum Keeping in Safe hand-
book as good practices to protect the confidentiality of information during
transmission.
333. Mexico keeps detailed statistics of its response times. The Mexican
competent authority developed indicators to monitor its EOI programme and
the timeliness of the responses. The target is to provide a final response to
all incoming requests within a maximum six-month timeframe. Naturally, a
number of requests are answered before the end of this time limit.
334. Approximately 60% of the requests received by Mexico come from
its main trading partner, the United States of America. Mexico enjoys an
excellent working relationship with its main EOI partner, as confirmed by
peer input. They communicate by telephone on an ad hoc basis, and arrange
meetings when necessary. Peer input also notes that e-mails and other com-
munications are responded to timely by the Mexican competent authority, and
any issues are resolved amicably.
335. Peers also acknowledged the responsiveness and accessibility of the
Mexican competent authority. Peers reported that information has in virtually
all cases been received in full, in the form request and in a timely manner.
336. The Mexican competent authority usually provides partial replies
before sending a final answer. Partial replies are usually provided way before
than the 90-day timeframe and normally contain information already avail-
able at the hands of the Mexicos competent authority (such as information
collected from its databases). Some peers indicated that Mexico did not
always provided status updates if it was unable provide the information
requested within 90 days. However, peers also recognised that the Mexican
competent authority usually provides partial replies before sending a final
report. In essence, the partial replies may be considered as a form of status
update. Since 2013, the EOI team implemented a policy to provide status
updates invariably after a 90-day period.
Organisational process and resources (ToR C.5.2)
337. SAT is structured according to its tasks. Responsibility for the
exchange of tax information resides with the Central Administration of
International Audits (CAIA) within the General Administration for Large
Taxpayers. The head of the CAIA is the competent authority for EOI purposes.
The Competent Authority
338. In Mexico, the capacity to exchange information lies on the General
Administration for Large Taxpayers. This capacity is legally and operatively
delegated on the Central Administration for International Audits. Therefore,
the latter authority is registered as the Competent Authority for EOI. Within
the Central Administration for International Audits, the Administration for
International Audits 3 functions as the EOI team.
339. The contact information of the Mexican competent authority is fully
identifiable in the OECD and Global Forum websites.
Resources
Human Resources and Training
340. Mexicos EOI team comprises of eight full-time officials including
two managers with more than 20 years of experience with EOI. The work
of the EOI Team is overseen by the Head of International Tax Audits who
also has solid EOI experience. The EOI team manages all steps of the EOI
process, from the receipt and review of the requests from the collection of
information and the reply to the foreign authorities. The officials are all tax
auditors and have full information gathering powers and can directly access
information from taxpayers and information holders (including a number
of government agencies in Mexico that hold information that is relevant for
EOI) as well as access the comprehensive databases maintained by Mexicos
tax authority.
341. Among the qualifications of the EOI Team, two officials are quali-
fied accountants, three are lawyers, and one person has completed the studies
in systems engineering. All members of the EOI team have also a solid expe-
rience in tax auditing and have served other departments of the SAT before
taking part on the EOI work. The staff has been stable for a number of years.
342. The head of the Central Administrator for International Audits regu-
larly attends the Global Forum, Peer Review Group meetings and, together
with the head of the EOI team the competent authorities meetings. Mexican
officials also participate in the OECD working parties, where EOI matters
are discussed.
343. The EOI team has attended several workshops and seminars on
EOI, international tax treaties, international tax, aggressive tax planning
and auditing matters. The Mexican tax administration and the OECD have
jointly established a Multilateral Tax Center where a number of seminars
and courses are organised, which facilitates considerably the attendance of
Mexican officials.
Databases, manuals, templates and materials
344. The EOI team has developed a manual detailing the procedures for
exchange tax information with foreign jurisdictions, covering both inbound
and outbound requests. This manual is complemented by a flowchart detail-
ing the EOI process. The manual follows, in general terms, the OECD
manual. The EOI team also developed template letters and notices to request
information from the information holder, i.e. taxpayers and third parties.
345. The Mexican EOI team has developed a comprehensive database
where all inbound and outbound EOI requests registered, as well as any other
information and documents received by the competent authority in relation
to the EOI requests. Each EOI request is identified by a reference number
and name, and all subsequent documents received by the competent authority
related to that specific request are identified with the same number.
Access to institutional databases
346. The Mexican EOI team uses has direct access to and uses several
institutional databases to reply to exchange of information requests.
Legal Assistance
347. The EOI team has direct access to other departments of the tax
administration that can provide it with support on legal matters (for instance,
the General Direction of International Treaties and Central Administration
for International Tax Legal Affairs). This is useful when EOI cases pose legal
challenges.
EOI statistics
348. The EOI team maintains very detailed statistics of its work. Annual
statistics include: inventory of requests at the beginning of year, closed
requests, new requests received during the year and inventory of requests
at year-end. The team also maintains statistics on the volume of requests
per requesting jurisdiction, timeliness of responses, type of information
exchanged, etc.
Processing requests
349. Once the EOI team receives a request of information, the head (the
Administrator) of the EOI team records it in the EOI database and assign it
to one of the two sub-administrators. The sub-administrators maintain their
own control of the requests under their supervision (including deadlines and
actions taken), and they are responsible for determining the validity of the
requests. In order to do so, they review whether there is a treaty in force with
the requesting jurisdiction, whether the treaty covers the relevant type of tax
and tax years etc. Once the validity of the request is reviewed, the sub-admin-
istrators will assign the request to an analyst within their unit. In practice,
the sub-administrator may also perform some searches in the tax databases
to start the investigation and provide some guidance to the analyst in charge.
The analyst will immediately prepare a letter to the requesting jurisdiction
acknowledging the receipt of the request and start the information gathering
process. The acknowledgment letter is normally sent within three to five days
of receipt. If possible, a partial reply (based on information available in the
tax databases) will be sent with the acknowledgment of receipt.
350. If the request is unclear or incomplete, the analyst will in consulta-
tion with the sub-administrator seek further information from the requesting
jurisdiction. For instance, in many cases, the requesting jurisdictions fail
to mention the maternal last name of the individual in reference and in
Mexico names are generally composed of both maternal and paternal last
names. In this sense, Mexico will try to confirm with the other jurisdiction
additional information that would assist it to identify the specific taxpayer.
Clarifications by official letter or e-mail and, sometimes, by phone to expe-
dite the process.
351. The EOI team maintains an open-communication channel with its
counterparts, maintaining regular contact by phone and occasionally arrang-
ing face-to-face meeting.
352. Once the analyst has gathered the requested information, the
sub-administrator in charge will review its accuracy and whether it fully
addresses the foreign request. If the information satisfactorily replies to the
EOI request, the EOI team will provide it to the treaty partner and consider
for the time being the request as closed (unless there are further inquiries
from the requesting jurisdiction). If the information gathered only corre-
sponds to a partial reply, the EOI team will also immediately provide to its
treaty partner; clarifying that this correspondents to a partial reply.
353. In practice, the answers provided by the Mexican EOI team are com-
prehensive and thorough. In approximately 40% of the requests, the responses
can have more than 500 pages of documents. This is because several requests
received by Mexico cover different records such as accounting records and
underlying documentation, banking information and tax return information.
Mexico sends the responses to EOI requests by courier, as the normal post
has not been always reliable.
Peer input
as professional, knowledgeable and dedicated to the exchange of information
process. Peers also acknowledged the responsiveness and accessibility of the
Mexican competent authority.
Absence of unreasonable, disproportionate or unduly restrictive
conditions on exchange of information (ToR C.5.3)
355. There are no specific legal and regulatory requirements in place
which impose restrictive conditions on Mexicos exchange of information
practice.
Thi s el ement invol ves i ssues of practi ce that are assessed in the Phase 2
revi ew. Accordingl y no Phase 1 determinati on has been made.
Phase 2 rating
Compli ant .
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 109
Summar y of Deter minations and Factor s
Under lying Recommendations
Overall Rating
COMPLIANT
Determinati on
Factors underl ying
J urisdictions should ensure that ownership and identity information for all relevant entities
and arrangements is available to their competent authorities. (ToR A.1)
Phase 1 determination:
The element is in place.
Phase 2 rating:
Compli ant
J urisdictions should ensure that reliable accounting records are kept for all relevant entities
and arrangements. (ToR A.2)
Phase 2 rating:
Compli ant
Banking information should be available for all account-holders. (ToR A.3)
Phase 2 rating:
Compli ant
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
110 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
Determinati on
Factors underl ying
Phase 2 rating:
Largel y Compli ant
Mexico has broad powers
to access bank information
which were consistently used
for EOI purposes during the
review period. Access and
response times in relation
to a number of requests for
bank information exceeded
six months and in some
cases one year; and were
considered not timely. Mexico
has also recently amended its
law providing for direct access
to banking information, but
it has not been yet tested in
practice.
Mexico should monitor the
new law providing for direct
access to bank information and
use all its access powers for
bank information as efficiently
as possible so that bank
information can be exchanged
in a timely manner.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Phase 2 rating:
Compli ant
Exchange of information mechanisms should allow for effective exchange of information.
(ToR C.1)
Phase 2 rating:
Compli ant
The jurisdictions network of information exchange mechanisms should cover all relevant
partners. (ToR C.2)
Mexico should continue to
develop its EOI network with all
relevant partners.
Phase 2 rating:
Compli ant
The jurisdictions mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received. (ToR C.3)
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 111
Determinati on
Factors underl ying
Phase 2 rating:
Compli ant
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties. (ToR C.4)
Phase 2 rating:
Compli ant
The jurisdiction should provide information under its network of agreements in a timely
manner. (ToR C.5)
Phase 1
determinati on: Thi s
el ement invol ves
i ssues of practi ce
that are assessed in
the Phase 2 revi ew.
Accordingl y no
has been made.
Phase 2 rating:
Compli ant
ANNEXES 113
Annex 1: Jur isdictions r esponse to the r eview r epor t
77
Mexico wishes to acknowledge the hard work made in order to produce
this Phase 2 Report, which fairly reflects the situation of our country in terms
of transparency and exchange of information for tax purposes. We thank the
assessment team, as well as the Peer Review members who provided input
and commentaries to our review.
Mexicos commitment to fiscal transparency and effective exchange of
information is determinate and that can be seen by the legal framework that
rules the matter, as well as with our everyday contact with peers throughout
the world.
Mexico will continue to support the effort by the Global Forum on
Transparency and Exchange of Information for Tax Purposes in the years
to come, in order to achieve a more transparent environment in tax matters.
77. This Annex presents the jurisdictions response to the review report and shall not
be deemed to represent the Global Forums views.
114 ANNEXES
Annex 2: List of all Exchange-of-Infor mation Mechanisms
Multilater al agr eements
Since 27 May 2010, Mexico is a signatory to the multilateral Convention
on Mutual Administrative Assistance in Tax Matters. The status of the multi-
lateral Convention and amending the 2010 Protocol as at February 2014 is set
out in the below table.
78
When two or more arrangements for the exchange of
information for tax purposes exist between Mexico and a treaty partner, the
parties may choose the most appropriate agreement under which to exchange
the information.
Bilater al agr eements
The table below also contains the list of Tax Information Exchange
Agreements (TIEAs) or Double Tax Conventions (DTCs) signed by Mexico
as at May 2014.
Par tner juri sdi cti on
Type of EOI
arrangement Date si gned Date in force
1 Albania Multilateral Convention signed
In force in Albania
1-Dec-2013
2 Andorra Multilateral Convention signed Not in force
3 Anguilla* Multilateral Convention signed
In force in Anguilla
1-Mar-2014
4 Argentina Multilateral Convention signed
In force in Argentina
1-J an-2013
5 Aruba**
TIEA 18-J ul-13 Not in force
Multilateral Convention signed
In force in Aruba
1-Sep-2013
78. The updated table is available at www.oecd.org/dataoecd/8/62/48308691.pdf.
ANNEXES 115
Type of EOI
6 Australia
DTC 9-Sep-02 31-Dec-03
In force in Australia
1-Dec-2012
7 Austria
DTC 13-Apr-04 1-J an-05
Protocol 18-Sep-09 1-J ul-10
Multilateral Convention signed Not in force
8 Azerbaijan
Multilateral Convention
(Original)
signed
In force in Azerbaijan
1-Oct-2004
9 Bahrain DTC 10-Oct-10 22-Feb-12
10 Barbados DTC 7-Apr-08 16-J an-09
11 Belgium
DTC 24-Nov-92 1-Feb-97
Protocol 26-Aug-13 Not in force
12 Belize
TIEA 17-Nov-11 9-Aug-12
In force in Belize
1-Sep-2013
13 Bermuda*
TIEA 15-Oct-09 9-Sep-10
In force in Bermuda
1-Mar-2014
14 Brazil
DTC 25-Sep-03 29-Nov-06
15 British Virgin Islands Multilateral Convention signed
In force in British
Virgin Islands
1-Mar-2014
16 Canada
DTC 12-Sep-06 12-Apr-07
17 Cayman Islands*
TIEA 28-Aug-10 9-Mar-12
In force in Cayman
Islands
1-J an-2014
18 Chile
DTC 17-Apr-98 12-Nov-99
116 ANNEXES
Type of EOI
19 China
DTC 12-Sep-05 1-Mar-06
20 Colombia
DTC 13-Aug-09 11-J ul-13
In force in Colombia
1-J ul-2014
21 Cook Islands TIEA 22-Nov-10 3-Mar-12
22 Costa Rica
TIEA 25-Apr-11 26-J un-12
In force in Costa Rica
1-Aug-2013
DTC
12-Apr-
2014
Not in force
23 Croatia Multilateral Convention signed
In force in Croatia
1-J un-2014
24 Curaao**
In force in Curaao
1-Sep-2013
TIEA 1-Sep-09 4-Feb-11
25 Czech Republic
DTC 4-Apr-02 27-Dec-02
In force in the Czech
Republic
1-Feb-2014
26 Denmark
DTC 11-J un-97 22-Dec-97
In force in Denmark
1-J un-2011
27 Ecuador DTC 30-J ul-92 13-Dec-00
28 Estonia
DTC 19-Oct-12 4-Dec-13
29 Faroe Islands*** Multilateral Convention signed
In force in Faroe
Islands
1-J un-2011
30 Finland
DTC 12-Feb-97 14-J ul-98
In force in Finland
1-J un-2011
ANNEXES 117
Type of EOI
31 France
DTC 7-Nov-91 31-Dec-92
In force in France
1-Apr-2012
32 Georgia Multilateral Convention signed
In force in Georgia
1-J un-2011
33 Germany
DTC 9-J ul-08 15-Oct-09
34 Ghana Multilateral Convention signed
In force in Ghana
1-Sep-2013
35 Gibraltar*
TIEA 29-Nov-12 Not in force
In force in Gibraltar
1-J an-2014
36 Greece
DTC 13-Apr-04 7-Dec-05
In force in Greece
1-Sep-2013
37 Greenland*** Multilateral Convention signed
In force in Greenland
1-J un-2011
38 Guatemala Multilateral Convention signed Not in force
39 Guernsey*
TIEA 27-J un-11 24-Mar-12
In force in Guernsey
1-Aug-2014
40 Hong Kong, China DTC 18-J un-12 7-Mar-13
41 Hungary
DTC 24-J un-11 31-Dec-11
42 Iceland
DTC 11-Mar-08 10-Dec-08
In force in Iceland
1-Feb-2012
43 India
DTC 10-Sep-07 1-Feb-10
In force in India
1-J un-2012
44 Indonesia
DTC 6-Sep-02 28-Oct-04
Protocol 6-Oct-13 Not in force
118 ANNEXES
Type of EOI
45 Ireland
DTC 22-Oct-98 31-Dec-98
In force in Ireland
1-Sep-2013
46 Isle of Man
TIEA 11-Apr-11 4-Mar-12
In force in Isle of Man
1-J an-2014
47 Israel DTC 20-J ul-99 9-May-00
48 Italy
DTC 8-J ul-91 12-Mar-95
Protocol 23-J un-11 Not in force
In force in Italy
1-May-2012
49 J apan
DTC 9-Apr-96 6-Nov-96
In force in J apan
1-Oct-2013
50 J ersey*
TIEA 12-Nov-10 22-Mar-12
In force in J ersey
1-J un-2014
51 Kazakhstan Multilateral Convention signed Not in force
52 Korea, Republic of
DTC 6-Oct-94 13-Feb-95
In force in Korea
1-J ul-2012
53 Kuwait DTC 27-Oct-09 15-May-13
54 Latvia
DTC 20-Apr-12 2-Mar-13
55 Liechtenstein
TIEA 20-Apr-13 Not in force
56 Lithuania
DTC 23-Feb-12 24-Nov-12
In force in Lithuania
1-J un-2014
57 Luxembourg
DTC 7-Feb-01 27-Dec-01
Protocol 7-Oct-09 20-Nov-11
ANNEXES 119
Type of EOI
58 Malta
DTC 17-Dec-12 Not in force
In force in Malta
1-Sep-2013
59 Moldova, Republic of Multilateral Convention signed
In force in Moldova
1-Mar-2012
60 Montserrat* Multilateral Convention signed
In force in Montserrat
1-Oct-2013
61 Morocco Multilateral Convention signed Not in force
62 Netherlands
DTC 27-Sep-93 13-Oct-94
Protocol 11-Dec-08 31-Dec-09
In force in the
Netherlands
01-Sep-2013
63 New Zealand
DTC 16-Nov-06 16-J un-07
In force in New
Zealand
1-Mar-2014
64 Nigeria Multilateral Convention signed Not in force
65 Norway
DTC 23-Mar-95 23-J an-96
In force in Norway
1-J un-2011
66 Panama DTC 23-Feb-10 30-Dec-10
67 Peru DTC 27-Apr-11 19-Feb-14
68 Poland
DTC 30-Nov-98 28-Aug-02
In force in Poland
1-Oct-2011
69 Portugal
DTC 11-Nov-99 9-J an-01
70 Qatar DTC 14-May-12 9-Mar-13
71 Romania
DTC 20-J ul-00 15-Aug-01
72 Russian Federation
DTC 7-J un-04 2-Apr-08
120 ANNEXES
Type of EOI
73 Saint Lucia TIEA 5-J ul-13 Not in force
74 Samoa TIEA 30-Nov-11 18-J ul-12
75 San Marino Multilateral Convention signed Not in force
76 Saudi Arabia Multilateral Convention signed Not in force
77 Singapore
DTC 9-Nov-94 14-Sep-95
Protocol 29-Sep-09 1-J an-12
78 Sint Maarten**
In force in Sint
Maarten
1-Sep-2013
TIEA 1-Sep-09 4-Feb-11
79 Slovak Republic
DTC 13-May-06 28-Sep-07
In force in Slovak
Republic
1-Mar-2014
80 Slovenia Multilateral Convention signed
In force in Slovenia
1-J un-2011
81 South Africa
DTC 19-Feb-09 22-J ul-10
In force in South Africa
1-Mar-2014
82 Spain
DTC 24-J ul-92 6-Oct-94
In force in Spain
1-J an-2013
83 Sweden
DTC 21-Sep-92 18-Dec-92
In force in Sweden
1-Sep-2011
84 Switzerland
DTC 3-Aug-93 8-Sep-94
Protocol 18-Sep-09 23-Dec-10
85 The Bahamas TIEA 23-Feb-10 30-Dec-10
86 Tunisia Multilateral Convention signed
In force in Tunisia
1-Feb-2014
ANNEXES 121
Type of EOI
87 Turkey
DTC 17-Dec-13 Not in force
88
Turks and Caicos
Islands*
In force in Turks and
Caicos Islands
1-Dec-2013
89 Ukraine
DTC 23-J an-12 6-Dec-12
In force in Ukraine
1-Sep-2013
90 United Arab Emirates DTC 20-Nov-12 Not in force
91 United Kingdom
DTC 2-J un-94 15-Dec-94
Protocol 23-Apr-09 18-J an-11
In force in UK
1-Oct-2011
92 United States
DTC 18-Sep-92 28-Dec-93
Protocol 8-Sep-94 26-Oct-95
Protocol 9-Sep-02 3-J ul-03
TIEA 9-Nov-89 18-J an-90
TIEA 8-Sep-94 26-Oct-95
93 Uruguay DTC 14-Aug-09 29-Dec-10
94 Venezuela DTC 6-Feb-97 Not in force
* Extension by the United Kingdom.
** Extension by the Netherlands.
*** Extension by Denmark.
122 ANNEXES
Annex 3: List of laws, r egulations and other r elevant mater ial
Commer cial legislation
Federal Civil Code (CCF)
Commercial Enterprises Act (LGSM)
Commerce Code (CCO)
Cooperatives Act (LGSC)
Tax legislation
Federal Tax Code (CFF)
Federal Tax Code Regulations (RCFF)
Income Tax Act (LISR)
Tax Administration Service Act (LSAT)
Administrative Tax Service Regulations (RISAT)
2011 Miscellaneous Tax Regulations (RMF 2011) (Administrative
regulations)
Non-pr ofit entities legislation
Law of Private Welfare Institutions for the Federal District (LIAPDF)
Federal Law on Promotion of Activities by Civil Society Organizations
(LFFAROSC)
AML and financial r egulation legislation
Credit Institutions Act (LIC)
Administrative Banking Regulation
ANNEXES 123
Investment Companies Act (LSI)
Insurance Act (LGISMS)
Securities Market Act (LMV
General Act on Auxiliary Credit Organizations and Activities
(LGOAAC)
Negotiable Instruments and Credit Transactions Act (LGTOC)
Retirement Savings Act
Bonding Institutions Act
AML Administrative Regulations on
AFORES (Retirement funds management companies and Investment
Companies
Bonding Institutions
Brokerage Firms
Credit Institutions
General Deposit Warehouses, Financial Leasing Companies and
Factoring Companies
Insurance Companies
Money Exchange/ / Exchange Centres
Money Transmitters
Savings and Popular Credit Entities
SOFOLES (Limited Purpose)/SOFOMES (Multiple Purpose Finance
Companies)
Other legislation
Political Constitution of The United Mexican States (CPEUM)
Regulations of Article 5th of the Constitution, Relative to the Execution
of Professions in the Federal District
Foreign Investment Act (LIE)
Foreign Investment Act Regulation
Notaries Act (LNDF)
Federal Penal Code (CPF)
124 ANNEXES
Federal Penal Procedure Code
Criminal Code for the Federal District
Federal Law for the Access to Government Public Information (LFAIPG)
Mexican legislation is available at: www.diputados.gob.mx/LeyesBiblio/
index.htm.
ANNEXES 125
Annex 4: List of author ities inter viewed
Representatives, the General Administration for Large Taxpayers,
Mexican Tax Administration Service
Representatives, the Central Administration for International Audits,
Representatives, the Administration for International Audits 3,
Representatives, the General Administration for Planning, Mexican Tax
Administration Service
Representatives, the General Administration for Tax Collection, Mexican
Tax Administration Service
Representatives, the General Administration for Taxpayers Services,
Representatives, the Tax Legislation Unit, Under Ministry of Revenue/
Ministry of Finance and Public Credit
Representatives, the Fiscal Federal Attorney, Ministry of Finance and
Public Credit
Representatives, the Financial Intelligence Unit/ Ministry of Finance and
Public Credit
Representatives, the Direction of Regulations for Delegations/Ministry
of Foreign Affairs
Representatives, the National Banking and Securities Commission
Representatives, the Direction for Permissions in the Terms of Article 27
of the Constitution, the General Direction for Legal Affairs/Ministry
of Foreign Affairs
Representatives, the Public Registry of Property and Commerce/Ministry
of Economy
126 ANNEXES
Representatives, the Direction for Commercial Regulations/Ministry of
Economy
Representatives, the National Registry of Foreign Investments/Ministry
of Economy
Representatives, the Public Registry of Property and Commerce/Federal
District Government
Representatives, the Public Notaries Association
Representatives, the National Bar Association
Representatives, the Mexican Institute of Public Accountants
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(23 2014 21 1 P) ISBN 978-92-64-21774-4 2014-01
GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
OF INFORMATION FOR TAX PURPOSES
Peer Review Report
Phase 2
Implementation of the Standard
in Practice
Global Forum on Transparency and Exchange of Information
for Tax Purposes
PEER REVIEWS, PHASE 2: MEXICO
This report contains a Phase 2: Implementation of the Standards in Practice review, as well
as revised version of the Phase 1: Legal and Regulatory Framework review already released
for this country.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 120 jurisdictions which participate in the work of the
Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These
standards are primarily reected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
party. Fishing expeditions are not authorised, but all foreseeably relevant information must
be provided, including bank information and information held by duciaries, regardless of the
existence of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identied by the Global Forum as
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1
reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange
of information, while Phase 2 reviews look at the practical implementation of that framework.
Some Global Forum members are undergoing combined Phase 1 plus Phase 2 reviews.
The ultimate goal is to help jurisdictions to effectively implement the international standards
of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus represent
agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange of
Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency and www.eoi-tax.org.
MEXICO
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Consult this publication on line at http://dx.doi.org/10.1787/9789264217751-en.
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and
statistical databases.
Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-21774-4
23 2014 21 1 P
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