Dear clients and friends,

As a consequence of recent reforms to the Federal Tax Code, as of January 1st, 2021, taxpayers will have to additionally conserve as part of their accounting records, during the entire time in which the respective entity or agreement subsist, the following documentation:

– In the case of shareholders’ meeting minutes for capital increases:

  • The bank statements if the increase was in cash, or the respective valuations if the contribution was in-kind.
  • The accounting registries if the increase was made through the capitalization of reserves or dividends.
  • Certification from an authorized public accountant that proves the accounting existence of the debt and its value in the case of capitalization of debts.

– Regarding shareholders’ meeting minutes for capital decreases:

  • The bank statements that reflect the decrease if it was made through a reimbursement to the shareholders.
  • The minutes of subscription, liberation and cancellation of shares, if the decrease was made by liberating the shareholders of paying owed capital.

– Concerning shareholders’ meeting minutes that reflect a merger or spin-off, the statements of financial position, statements of variation of shareholders’ equity, and the workpapers determining the Net Tax Profit Account (CUFIN) and the Capital Contributions Account (CUCA) of the tax years previous and subsequent to the one in which the merger or spin-off took place.

– The one that is necessary to implement the agreements reached as a result of controversy resolution procedures provided in the treaties for the avoidance of double taxation.

– The certificates that are issued or received by entities upon the distribution of dividends or profits.

Derived from the foregoing, today it is much more relevant to have in order an entity’s corporate books and to have caution in the wording and formalization of shareholders’ meeting minutes in order to comply with the new accounting requirements.

Should you have any questions related to the foregoing, please do not hesitate to reach out to your usual contact at the Firm.

Tax Consultancy & Litigation
Franco Herrera
franco.herrera@ecrubio.com

Edmundo Hernández
edmundo.hernandez@ecrubio.com
Arturo Bañuelos
arturo.banuelos@ecrubio.com
Felipe Mendoza
fmendoza@ecrubio.com
Fernando Holguín
fholguin@ecrubio.com
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