Can your Mexican subsidiary prove what it pays the parent company?
Transfer pricing studies for Mexican subsidiaries of foreign groups: services, royalties, loans and intercompany purchases.
Message us on WhatsAppLeave us your details
Thank you. We'll be in touch soon.
A team partner will reach out within 24 business hours.
- years of experience
- +15
- companies under active coverage
- +120
- client retention year over year
- 95%
The problem
When a company sells goods, lends money or charges for services to another company in the same group, the SAT wants to see a market price.
That is, the same price two independent companies would have agreed on. Without a study to prove it, any difference becomes a tax adjustment, and in an audit the burden of proof is on you.
Subsidiaries of foreign groups concentrate the transactions the SAT scrutinizes most: services from the parent company, royalties for the use of a brand or technology, intercompany loans and purchases of goods from the group.
The pricing policy is usually set in another country, but the burden of proving it’s at arm’s length falls on the Mexican company. If the documentation isn’t grounded in local rules, the deduction is exposed.
How it works
-
Assessment
intercompany transactions, risks and documentation requirements
-
Functional and economic analysis
comparability study at arm's length
-
Documentation
study prepared under current Mexican tax rules
-
Transfer pricing policies
aligned with your commercial and tax strategy
-
Defense before the authorities
support in audits and disputes
Why Contadoor
- Local analysis that complements the group's global policy
- Documentation of services, royalties and financing
- Support in audits and disputes
- Directors with Big 4 experience
Frequently asked questions
Are management fees paid to the parent company deductible in Mexico?
They can be, if the service was actually rendered, benefits the Mexican company and was priced at arm's length. Without documentation to prove it, the SAT often disallows the deduction.
Our parent company already has a global study. Is that enough?
It can be a starting point, but the SAT reviews the Mexican company's transactions under its own requirements. A local analysis is usually needed to complement it.
Who needs a transfer pricing study in Mexico?
Generally, companies that carry out transactions with related parties, in Mexico or abroad, must price them at arm's length and be able to prove it. Documentation requirements depend on your revenue and the type of transaction, so we review them with you.
What happens if I don't have a study?
If the SAT concludes your transactions weren't priced at arm's length, it can adjust your prices and assess additional taxes, plus surcharges and penalties. Documentation is your main defense.
Do you also value intangibles between group companies?
Yes. Intercompany intangible asset valuation is one of our complementary services, along with international corporate restructuring.
Thank you. We'll be in touch soon.
A team partner will reach out within 24 business hours.