Mexico has published Amendments to Annex 1-A of the First Resolution of Amendments to the Miscellaneous Tax Resolution for 2021. This includes several changes, including new rules regarding avoidance in relation to the reporting of schemes under the mandatory disclosure requirements (MDR).

Under the MDR, two types of reportable schemes are covered, including general schemes designed to be marketed to all taxpayers or a specific group of taxpayers, and customs schemes that are designed, marketed, organized, implemented, or managed to suit the particular circumstances of a specific taxpayer. Earlier in the year, an MXN 100 million threshold was established for the reporting of customs schemes, while the reporting of general schemes is not subject to any threshold.

In regard to this threshold, it has been found that some tax advisers have been deliberately attempting to pass off general schemes as custom schemes (below the threshold) in order to avoid reporting. In response, it is provided that such actions by tax advisers constitute a mechanism to avoid the application of the reporting rules, which is itself reportable as per Article 199 of the Tax Code. Article 199 defines the reportable schemes under the MDR.

Further, it is provided that tax advisers will be considered to have carried out an improper (harmful) tax practice if they fail to submit an informative return on a general scheme that has been made to appear as a custom scheme or fail to submit an informative return on such a mechanism to avoid the reporting rules. Anyone who advises, provides services, or participates in the performance or implementation of such practices is also considered to have carried out an improper (harmful) tax practice.