Pursuant to Article 199 of the Federal Tax Code, any scheme that generates or may generate, directly or indirectly, a tax benefit in Mexico and has any of the following characteristics is considered a reportable scheme:

I. Prevents foreign authorities from exchanging tax or financial information with Mexican tax authorities, including through the application of the Standard for the Automatic Exchange of Information on Financial Accounts in Tax Matters, as referred to in the recommendation adopted by the OECD Council on July 15, 2014, as well as other similar forms of information exchange. In the case of the aforementioned Standard, this section will not apply to the extent that the taxpayer has received documentation from an intermediary demonstrating that the information has been disclosed by said intermediary to the relevant foreign tax authority. The provisions of this section include when an account, financial product, or investment that is not a financial account is used for the purposes of the aforementioned Standard, or when income or capital is reclassified into products not subject to information exchange.

II. Avoid the application of Article 4-B or Chapter I, Title VI, of the Income Tax Law.

III. Consists of one or more legal acts that allow the transfer of tax losses pending reduction from taxable profits to persons other than those who generated them.

IV. Consists of a series of interconnected payments or transactions that return all or part of the amount of the first payment that is part of said series to the person who made it or one of its partners, shareholders, or related parties.

V. Involves a foreign resident who applies a double taxation agreement signed by Mexico with respect to income that is not taxed in the taxpayer's country or jurisdiction of tax residence. The provisions of this section shall also apply when said income is taxed at a reduced rate compared to the corporate rate in the taxpayer's country or jurisdiction of tax residence.

VI. Involves transactions between related parties in which:

a) Intangible assets that are difficult to value are transferred in accordance with the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, approved by the OECD Council in 1995, or any subsequent guidelines. An intangible asset is considered difficult to value when, at the time the transaction is carried out, there are no reliable comparables, or the projections of future cash flows or income expected to be obtained from the intangible asset, or the assumptions for its valuation, are uncertain, making it difficult to predict the ultimate success of the intangible asset at the time it is transferred;

b) Corporate restructurings are carried out in which there is no consideration for the transfer of assets, functions, and risks, or when, as a result of such restructuring, taxpayers who pay taxes under Title II of the Income Tax Law reduce their operating profit by more than 20%. Corporate restructurings are those referred to in the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, approved by the OECD Council in 1995, or any subsequent guidelines;

c) The transfer or temporary use or enjoyment of assets and rights is granted without consideration, or services are provided or functions are performed that are not remunerated;

d) There are no reliable comparables, because the transactions involve unique or valuable functions or assets, or

e) A unilateral protection regime granted under foreign legislation is used in accordance with the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, approved by the OECD Council in 1995, or any subsequent regulations.

VII. Avoid establishing a permanent establishment in Mexico under the Income Tax Law and the double taxation treaties signed by Mexico.

VIII. Involves the transfer of a fully or partially depreciated asset, allowing its depreciation by another related party.

IX. When it involves a hybrid mechanism defined in accordance with Section XXIII of Article 28 of the Income Tax Law.

X. Avoid the identification of the beneficial owner of income or assets, including through the use of foreign entities or legal entities whose beneficiaries are not designated or identified at the time of their incorporation or at a later time.

XI. When there are tax losses whose deadline for reducing taxable income is about to expire pursuant to the Income Tax Law, and transactions are carried out to obtain taxable income, from which said tax losses are reduced, and said transactions generate an authorized deduction for the taxpayer who generated the losses or a related party.

XII. Avoid the application of the additional 10% rate provided for in Articles 140, second paragraph; 142, second paragraph of Section V; and 164 of the Income Tax Law.

XIII. In which the temporary use or enjoyment of an asset is granted, and the lessee in turn grants the temporary use or enjoyment of the same asset to the lessor or a related party of the latter.

XIV. Involves transactions whose accounting and tax records show differences greater than 20%, except for those arising from differences in the calculation of depreciation.

For the purposes of Chapter One of Title VI of the Federal Tax Code, a scheme is considered to be any plan, project, proposal, advice, instruction, or recommendation expressed expressly or tacitly for the purpose of materializing a series of legal acts. The performance of a procedure before the authority or the defense of the taxpayer in tax disputes is not considered a scheme.

Generalized reportable schemes are those that are intended to be marketed en masse to all types of taxpayers or to a specific group of them, and although they require minimal or no adaptation to adapt to the taxpayer's specific circumstances, the method of obtaining the tax benefit remains the same. Customized reportable schemes are those that are designed, marketed, organized, implemented, or administered to adapt to the particular circumstances of a specific taxpayer.

Additionally, any mechanism that avoids the application of the provision itself in general will be reportable.