It is reminded that as of January 1st, 2022, legal entities and individuals engaging in transactions with related parties are obligated to have documentation demonstrating that their taxable income and authorized deductions were determined, considering for such transactions the prices, consideration amounts, or profit margins they would have used or obtained with or between independent parties in comparable transactions.

For these purposes, it is worth remembering that two or more persons are considered related parties when one participates directly or indirectly in the administration, control, or capital of the other, or when one person or group of persons participates directly or indirectly in the administration, control, or capital of such persons.

Likewise, it is reminded that individuals engaging in transactions, in the immediate preceding calendar year, with related parties that are national or foreign legal entities, individuals, and permanent establishments in the country of non-resident individuals, must submit, no later than May 15th of the immediate subsequent year to the end of the relevant tax year, the information requested through the Multiple Information Return.

Similarly, it is reminded that taxpayers who are related parties of legal entities obligated to have their financial statements audited for tax purposes shall be obliged to include as part of the declaration of the relevant tax year the information concerning their tax situation.

At FRALLA, we have specialized personnel to carry out the analysis of transactions entered into between related parties and for which there may be an obligation to comply with the aforementioned obligations and others in this matter.

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February 2024

Mexico City, Mexico