AMINEWS - FATCA | DECEMBER 2012
 
 
 
The milestone
 
Effective as of January 2013, Mexico and the United States of America have committed to coordinating efforts in order to collect financial information and exchange it on an automatic basis with the main purpose of improving international tax compliance.

FATCA requires the Foreign Financial Institutions (FFI’s) to enter into an agreement with IRS to report information of their clients’ financial accounts held by US The U.S. Treasury Department will collect information regarding certain financial accounts and products held by Mexican residents in U.S. Financial Institutions and will exchange the same with the Mexican Ministry of Finance. In reciprocity, the Mexican authority will collect and provide equivalent levels of information about US residents holding accounts in Mexico. As a result, both governments expect to increase their supervision capabilities and obtain higher levels of tax compliance.

 
The US-Mexico FATCA agreement
 
After two years of negotiations, on November 19th 2012 the Agreement to Improve International Tax Compliance and to Implement FATCA was executed between the U.S. Department of Treasury and the Mexican Ministry of Finance. The full content of such Agreement can be found in the following link http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-Mexico-11-19-2012.pdf.

According to the US-Mexico FATCA Agreement, the U.S. will collect and exchange the following information from the accountholders of “Mexican Reportable Accounts”:
  • Name, address and tax identification number (or date of birth);
  • Account number and name of the U.S. Financial Institution where the account is held;
  • Interest paid on Depository Accounts;
  • U.S. source dividends paid or credited to Mexican Reportable Accounts; and
  • Other U.S. source income paid or credited to such accounts (as provided by the Agreement and the U.S. Internal Revenue Code).
It is expected that the information collected during 2013 by both governments on individuals holding accounts abroad will be exchanged during 2014 and 2015. For the subsequent years, the information will be exchanged on an annual basis. Among others, with the information provided, the Mexican tax authorities may audit Mexican individuals/residents that hold accounts in the United States in order to verify due compliance of their tax obligations.

It is expected that both governments will continue working in the contents of an ancillary agreement that will establish further procedures for the automatic exchange of information as well as the rules that will streamline the compliance and enforcement of the US-Mexico FATCA Agreement.

With the enforcement of the US-Mexico FATCA Agreement, more than ever, U.S. and Mexican individuals and taxpayers will need to be aware of their tax obligations (notwithstanding the geographic location of their investments) and take all necessary steps to comply with them.

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Amicorp Group
 
In business since 1992, the Amicorp Group operates through a worldwide team of more than 600 professionals located in 28 countries that contribute with a wide range of expertise and experience in order to deliver customized solutions that attend our clients’ specific needs. From our global network of offices, we provide all supporting services related to managing and administering companies and trusts. We deliver the broadest range of structuring alternatives involving corporate vehicles such as companies, partnerships and foundations.

For many years, the Amicorp Group, in collaboration with our client’s legal and tax advisors, has implemented robust legal structures that allow our clients to invest into the U.S. in a compliant way. It is our understanding that through proper structuring, the Amicorp Group vehicles may offer a solid and legal alternative for those individuals interested in maintaining their U.S. investments while complying with their tax obligations, both in the country the structure has been established and their country of tax residence.

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Contact information
 
For more information or clarifications on this note and to learn more about the services of the Amicorp Group, please contact our U.S. and/or Mexico offices:

Mexico:
Eréndira Solis (Email: e.solis@amicorp.com / Telephone: +52 55 5202 5999)

United States (East Coast):
Robert Payne (Email: r.payne@amicorp.com / Telephone: +1 305 416 4730) or
Tomas Alonso (Email: t.alonso@amicorp.com / Telephone: +1 305 416 4730)

United States (West Coast):
Mauricio Cano del Valle (Email: m.cano@amicorp.com / Telephone: +1 619 236 00 26)

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Disclaimer
 
This document is prepared for general information purposes only. Amicorp Group does not provide tax or legal advice to its clients. Any opinions contained herein should not be construed or interpreted as advice provided by Amicorp Group.

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