Mexican tax authorities published Appendixes 25 and 25-Bis of the Mexican Administrative Rules for 2016, which include a number of reporting provisions related to FATCA and CRS compliance in Mexico.

Mexican tax authorities published Appendixes 25 and 25-Bis of the 2016 Mexican Administrative Rules in the Official Gazette on January 12, 2016. The Appendixes set forth general identification and reporting requirements applicable to Mexican Financial Institutions, including their foreign branches, pursuant to the exchange of information requirements under the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS).

Mexican financial Institutions, including their foreign branches, are subject to the requirements set forth in these Appendixes pursuant to international agreements on fiscal transparency and exchange of information entered into by the Mexican Tax Authorities.

Appendix 25

The Mexican tax authorities updated Appendix 25, which was originally published in 2014. The tax authorities aligned the reporting obligations in updated Appendix 25 with the due dates (June 30th of each fiscal year) set forth in Article 32-B of the Federal Fiscal Code (FFC). They also replaced the "Nil Report" (i.e., no reportable transactions report) with a sworn statement signed by the corresponding financial institution's legal representative under penalty of perjury, indicating that there are no reportable transactions.

Appendix 25-Bis

Appendix 25-Bis contains general administrative rules to comply with the obligation set forth in Article 32-Bis of the FFC, regarding financial institutions' obligations to identify and report, in certain cases, information on bank accounts held by residents of CRS participating jurisdictions. Appendix 25-Bis also contains procedures for identifying foreign reportable bank accounts, as well as for submitting required information to the tax authorities.

Appendix 25-Bis does not change the general reporting obligations established by FATCA.

Review process for new individual or corporation bank accounts

Starting on January 1, 2016, financial Institutions should implement all processes required for identifying new accounts under CRS regulations. Appendix 25-Bis establishes an auto-certification format, which allows financial institutions to determine the account holder's residence for tax purposes and to comply with the minimum requirements for reporting accounts.

Review process for pre-existing individual and corporation accounts

Appendix 25-Bis eliminates the de minimis threshold for individual pre-existing accounts. Additionally, Appendix 25-Bis establishes procedures for financial institutions to follow in reviewing existing bank accounts for individuals held through December 31, 2015. For pre-existing corporation bank accounts, financial institutions may opt to not apply the review processes to accounts that do not exceed USD $250,000, held through December 31, 2015.

Financial institutions must review pre-existing accounts on or before December 31, 2017. However, Article 32-Bis of the FFC establishes that the due date is December 31, 2016 for accounts classified as Individual High Value Accounts.

Terminology

Appendix 25-Bis introduces new terms, such as broad participation retirement funds, restricted participation retirement funds, and qualified credit card issuers.

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