The Mexican Federal Revenue Law for the Fiscal Year 2019 (“FRL”) sets forth a voluntary disclosure/amnesty program for persons under the scope of the Federal Law for the Prevention and Identification of Transactions with Funds from Illegal Sources (“AML Law”) that have not complied with obligations triggered from July 1, 2013 to December 31, 2018. Taxpayers that apply this program will not be subject to sanctions with respect to the above mentioned period. The program will be ruled by administrative guidelines that should be issued by the Tax Administration Service (“SAT”) no later than the end of March.
The main characteristics of the program are the following:
- An authorization from the SAT must be obtained in order to benefit from the program.
- The applicants must comply with the obligations set forth under the AML Law for 2019.
- SAT may pardon sanctions already imposed in connection with AML obligations triggered during the amnesty period.
- The program will be effective for one year as it has been granted by the FRL that is only valid for 2019.
This constitutes a unique opportunity to regularize the AML position of persons under the scope of the Law that have not duly complied with the obligations set forth under the AML Law. Please bear in mind that voluntary compliance of the AML obligations outside the applicable timeframe does not eliminate the possibility to be sanctioned by the SAT and that the monthly fine applicable for breaching the AML Law may go up to $5.4 million pesos (approximately USD $280,000).
Some of the activities covered by the AML Law that should be reported are loans, the provision of services, leasing activities and construction services.
Baker McKenzie has advised clients since 2013 on matters related to the AML Law. We will be glad to help you determine the application of the program on a case-by-case basis.