Reduction of Penalties in relation to CRS, FATCA, and Beneficial Ownership

As part of its international commitments, Mexico has adopted standards aimed at strengthening tax transparency. These include the automatic exchange of information on financial accounts, in accordance with the OECD Common Reporting Standard (CRS) and FATCA, as well as the obligation to identify and report Beneficial Ownership information, in line with OECD and FATF standards.

The penalty regime applicable to these obligations is particularly onerous. In particular:

• Since 2022, penalties for non-compliance with FATCA and CRS obligations, including failure to file, late filing, or filing with errors, may amount to up to MXN $168,680 per account.
• Penalties for non-compliance with Beneficial Ownership obligations, including failure to obtain, maintain, or update the relevant information, may reach up to MXN $2,249,000 per Beneficial Owner of the relevant entity.

Recently, the Tax Administration Service (SAT) established the penalty reduction percentages applicable to these obligations. Through Rule 2.14.15 of the Administrative Tax Regulations for 2026, published on 28 December 2025, the SAT established that, for purposes of Article 74 of the Federal Tax Code, those that fail to comply with such obligations and that choose to regularize their tax position may request a reduction of penalties as follows:

• 30%, where the request is submitted during the audit or verification by the tax authorities.
• 20% or 10%, depending on the age of the penalty, once the relevant resolution has been issued.

While the new rule provides greater certainty regarding the applicability of Article 74 of the Federal Tax Code to CRS, FATCA and Beneficial Ownership obligations, the reduction percentages provided are significantly lower than those applicable to other tax obligations not related to the payment of tax.

In addition, considering the context of ongoing and upcoming reviews by the OECD Global Forum and the FATF, an increase in compliance and enforcement activities in relation to these obligations can reasonably be expected.

In this context, it is essential for financial institutions and other obligated entities to strengthen their compliance processes in order to prevent infringements and penalties, as well as to timely assess the available defense strategies and, where applicable, penalty mitigation mechanisms under the applicable legal framework.

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