In the Fourth Supplement of the Official Gazette number 160, dated September 30, 2022, the Internal Revenue Service issued Resolution number NAC-DGERCGC22-00000046. This resolution outlines the rules for submitting information on ultimate beneficiaries and members of the corporate composition to the Internal Revenue Service. This regulation aims to promote transparency, strengthen tax control, combat corruption and organized crime, prevent tax fraud and money laundering, comply with international administrative assistance obligations, and enhance supervision and financial management of the corporate, fiduciary, and securities market sector.
According to the resolution, ultimate beneficiaries are natural persons who hold at least 10% of the capital, votes, dividends, or exercise any other form of control over a legal person or any natural person in charge of making strategic decisions for the legal person. For trusts or legal structures, ultimate beneficiaries include natural persons who hold positions of the settlor, trustee, beneficiary, or any other natural person who exercises absolute effective control over the assets, results, or profits.
Legal persons or structures, through their legal representatives, are required to identify their ultimate beneficiaries, update information related to them, identify each member of their chain of ownership and submit the necessary annexe to the IRS within the deadlines, forms, and conditions provided. They must also ensure the availability of information on ultimate beneficiaries for the previous 5 years before the date of cancellation or extinction. The IRS may request additional information as necessary.
Ultimate beneficiaries, in turn, must disclose their updated information, including their names, surnames, identity documents, date and place of birth, jurisdictions of tax residence, and tax identification numbers, to the legal representative through the document prepared by the IRS for this purpose.
Furthermore, they must indicate the nature of their control over the person or legal structure and provide supporting documentation of their status as the ultimate beneficiary. This information must be provided annually, with a cut-off date of December 31 of each year, within January of the following fiscal year, whether or not there have been changes since the last submission. If there are changes in the ownership or control of persons or legal structures, such changes must be reported within the following calendar month.
Information quality: the information provided must be complete, meaning that all required fields in the annexe have been filled out; adequate, meaning that it is sufficient to identify the ultimate beneficiary of the person or legal structure and the means through which that natural person exercises ownership or control; and accurate, meaning that the information must be precise to the identity of the ultimate beneficiary, using documents obtained from an independent source, among other things. In addition, the data must always be up-to-date, so the annexe must be submitted to the SRI annually within the following month of any changes to the information.
Professionals: legal, economic, accounting, administrative, and other professionals must comply with the obligations contained in the resolution whenever they act on behalf of a client in:
Buying and selling real estate.
- Managing their client’s money, securities, savings accounts, or other assets.
- Organizing capital and contributions for creating, operating, maintaining, or administrating legal persons or structures.
- Creating, operating, administering, or transforming legal persons or structures, and buying and selling commercial entities.
These professionals must keep their client’s information for 5 years from the date their relationship with their clients ends and supply it to the SRI if requested. This does not affect the professional secrecy between the professional and their client.
Registration of ultimate beneficiaries: the information contained in the registration of ultimate beneficiaries will be reserved and confidential. State entities may only access the information in the registration of ultimate beneficiaries necessary for exercising their powers.
Information retention: the legal representatives of legal persons or structures must retain the information that supports the annexe containing information about their ultimate beneficiaries, as well as the due diligence procedures they apply, for 5 years from the date of submission of the annexe on ultimate beneficiaries.
Sanctions: in the event of sanctions being imposed, they do not exempt the offender from complying with the obligations generated by the resolution. The sanctioning procedure, including expiration and prescription, as well as administrative remedies, will be governed by the Tax Code.
Additional provisions:
- State institutions with access to information about ultimate beneficiaries of legal persons or structures from sources other than the SRI’s records will inform the SRI of such information for verification and, if necessary, updating. Similarly, anyone with information about ultimate beneficiaries that differs from that contained in the SRI’s records may communicate this to the abovementioned entity. Total confidentiality and secrecy will be maintained.
- The SRI will implement the system for the Registration of Ultimate Beneficiaries within 24 months from the date of entry into force of this Resolution, that is, September 30, 2022.
- Compliance with the obligations contained in the resolution will be enforceable 3 months after the SRI notifies that it has completed the Registration of Ultimate Beneficiaries implementation process.
- Taxpayers who must submit the “Annex of Shareholders, Participants, Partners, Board Members, and Administrators” will continue to do so until the Registration of Ultimate Beneficiaries is implemented.
