cover image AMINEWS  
  cover image  
  May, 2013 Spanish | Chinese print downlaod  
  FOCUS ON:
The US-Mexico FATCA Agreement
 
     
  Effective as of January 2013, Mexico and the United States of America have committed to coordinate efforts in order to collect financial information and exchange it on an automatic basis with the main purpose of improving international tax compliance.

For such purposes, a reciprocal Intergovernmental Agreement (“IGA”) was executed between the U.S. Department of Treasury and the Mexican Ministry of Finance (known as the Agreement to Improve International Tax Compliance and to Implement FATCA).

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

Our full note on the contents of this agreement can be found in the following link: http://www.amicorp.com/AmiNews/FATCA_US-Mexico/English.html.

In terms of this agreement, among others, 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 terms of the IGA such reportable accounts are:
  1. Depositary Accounts (held by individuals generating more than USD 10 on interest paid during 2013 and 2014); and
  2. Custodial Accounts (corporate or individual investments on bonds and equities when generating US sourced income)
In particular, the U.S. will collect and exchange the following information from the accountholders of “Mexican Reportable Accounts”: (i) Name, address and tax identification number (or date of birth); (ii) Account number and name of the U.S. Financial Institution where the account is held; (iii) Interest paid on Depository Accounts; (iv) U.S. source dividends paid or credited to Mexican Reportable Accounts; and (v) Other U.S. source income paid or credited to such accounts. It is expected that the information collected during 2013 and 2014 by the U.S. on Mexican individuals holding accounts in U.S. Financial Institutions will be exchanged with Mexico during 2015.

With the enforcement of the US-Mexico FATCA Agreement, more than ever, Mexican individual and corporate 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. Under the Mexican Income Tax Law, Mexican tax residents are subject to pay taxes on their worldwide basis, therefore, should report both interests and earnings on foreign currency on a yearly basis despite the source of income. As a result, all foreign investments that are directly or indirectly owned by Mexican taxpayers should be disclosed as well.

Those Mexican individuals and tax payers that decide to maintain foreign investments through international structures should make sure such structures are compliant with the applicable laws and remain compliant with the changing tax situation.

It may still be possible to set compliant structures that provide benefits such as asset protection, tax deferral and/or estate planning. These structures have been carefully implemented by the Amicorp Group, in collaboration with our clients’ legal and tax advisors, and they are those with an irrevocable and nondiscretionary Trust or Foundation incorporated in solid jurisdictions and, where needed, with an underlying entity or partnership.
 
     
     
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  For more information Contact:  
  profile photo Veronica Yepez Reyna
Managing Director

Amicorp Services Ltd.
(Representative Office - San Diego)
Email-ID: v.yepez@amicorp.com
profile photo Erendira Solis
Director

Amicorp Soluciones Fiduciarias,
S.A. de C.V., SOFOM, E.N.R.

Email-ID: e.solis@amicorp.com
         
     
  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.