Subjects applying for an APA should expect regular meetings with the SAT and follow-up investigations, including on-site, to understand and confirm information provided by the taxpayer. The length of the APA negotiation process depends on a number of factors, including the quality of the information provided, the complexity of the taxpayer`s commercial and intercompany transactions and, in the case of bilateral or multilateral agreements, the negotiation process between Mexican tax authorities and their foreign counterparties, including voluntary arbitration. APP negotiations typically last more than two years in Mexico. For taxpayers with complex or unique intercompany transactions, price arrangements (APAs) are an attractive way to obtain certainty about their pricing methods, since the taxpayer`s intercompany transactions are negotiated with the relevant local tax authority for a specified period of time. In Mexico, AAPs can cover up to five years, including the fiscal year if an APA is requested, the year immediately prior and up to three years after the year of the corresponding application. D.4.4.10. If documentary aid is not maintained, the external auditor`s report refers to such an omission and, in the case of an audit, the Authority may determine the method and comparable undertakings it deems appropriate in applying the „arms-length” principle, according to which an adjustment of revenues or deductions can be made. In addition to the double taxation resulting from the payment made in the other country, this may result in new taxation and, therefore, a new tax burden, including the rest, increases and fines. The fine is 100% of the tax payable (Group II of Article 76 of the Federal Tax Code), but can be reduced to 50% if the obligation to study transfer prices is met.
In addition, companies that must submit a statutory tax audit report (due june 30) must also submit the following appendices to transfer pricing: Tags: andersen global, andersen tax – legal mexico, international postkarte, Mexican tax legislation The IRS communication also specifies that the renewal agreement has several additional features. Given that there are situations in which maquiladora has a balance of outstanding debts which the competent authorities accept that it is incompatible with the mexican company`s transfer pricing profile, a mechanism has been put in place to deal with these situations. In addition to ensuring security for fiscal years until 2019, the agreement also requires the relevant authorities to begin work on a new renewal of the QMA for fiscal year 2020 and beyond and to take into account in these discussions the impact of current economic, commercial and health conditions affecting taxpayers and work processes. D.4.11.2. Mexico recognizes that a strong risk assessment system is the right starting point for an effective tax control cycle and, in this regard, the Mexican tax administration has identified a number of tax structures and regimes and addressed them through the implementation of specific audit programs.