Keeping you informed of the tax obligations you may be subject to is very important to the firm.
In this case we would like to address the obligation to file the informative returns established in article 76-A of the Income Tax Law (Ley del Impuesto Sobre la Renta (LISR per its Spanish acronym)).
The following is a brief summary of the information to consider in order to ensure compliance for this obligation
Which informative returns are concerned?
I. Related Parties Master Informative Return.
II. Related Parties Local Informative Return.
III. Country by Country Informative Return.
Who has to file them?
Companies that carry out transactions with related parties, and;
• Had an accruable income of or over 686,252,580.00 pesos in 2015, as the first tax year to be reported is 2016.
• Belong to multinational groups.
• Are state-owned entities of the federal public administration.
• Are foreign residents with a permanent establishment in the country.
It is important to mention that taxpayers will only have to file the informative return that applies to them, based on the following:
a) The Related Parties Master Informative Return, is to be filed by companies that are part of a multinational group. The group may file a joint return if one of the companies, under the obligation, files the return selecting the “joint return option”, indicating the name or corporate name and tax ID of the related taxpayers.
b) The Related Parties Local Informative Return, is to be filed by all companies that are under any of the assumptions set forth in the above-mentioned items.
c) The Country by Country Informative Return, is to be filed by entities, that are residents in the country or foreign residents with a permanent establishment in the country, that are appointed by the controlling company as responsible for filing this return, or if the case may be, a controlling entity that is a resident in the country and which obtained consolidated accounting earnings of over 12 billion pesos in 2015.
When are they to be filed?
a) Country by Country Informative Return for multinational corporate groups, in accordance with the tax year-end closing date of the foreign resident controlling com- pany. If the year-end closing date does not match the calen- dar year, returns may be filed as follows:
I. If the tax year the return is filed for ends in June, July, August, September, October, November or December, no later than December 31st of the following year.
II. If the tax year the return is filed for ends in January, no later than January 31st of the following year.
III. If the tax year the return is filed for ends in February, no later than the last day of February of the following year.
IV. If the tax year the return is being filed for ends in March, no later than March 31st of the following year.
V. If the tax year the return is being filed for ends in April, no later than April 30th of the of the following year.
VI. If the tax year the return is being filed for ends in May, no later than May 31st of the following year.
b) Related Parties Master Informative Return, when the year-end closing dates of the foreign company preparing the Related Parties Master Informative Return for the multinational corporate group do not coincide with the calendar year, the company obliged to file the return in Mexico may state this on the regular informative return no later than December 31st, 2017, and therefore choose to later apply the above-mentioned deadlines.
c) Related Parties Annual Local Informative Return, no later than December 31st of the following year.
Failure to file these returns or filing with incomplete information, errors, inconsistencies or in a manner other than that indicated could render the taxpayer liable to paying a fine ranging from $140,540.00 to $200,090.00 pesos.
We therefore strongly suggest you contact your transfer pricing specialists and corporate offices as soon as possible in order to work on the information requested so as to correctly file these informative returns and therefore duly comply with the obligation to avoid the risk of being fined by the Authorities.
Please feel free to contact us if you have any doubts or questions.