Mexico: APAs no longer available for maquiladora companies
This leaves the “safe harbor” calculation as the only possible means for demonstrating maquiladora compliance with Mexico’s transfer pricing rules.
“Safe harbor” calculation is only possible means for demonstrating maquiladora compliance
Under recent tax reform measures, beginning in 2022, an advance pricing agreement (APA) is no longer available to maquiladora companies as a mechanism for resolving transfer pricing issues.
Accordingly, this leaves the “safe harbor” calculation as the only possible means for demonstrating maquiladora compliance with Mexico’s transfer pricing rules. Under the 2022 tax reform, compliance with the safe harbor is to be reported in the information return of the manufacturing companies, maquiladoras and export services (“DIEMSE” as per its acronym in Spanish) no later than June of the immediately following year. Read TaxNewsFlash
Thus, affected maquila companies need to consider how loss of access to APAs will affect their compliance with the transfer pricing rules and evaluate possible steps for continued compliance.
Read a January 2022 report (Spanish) prepared by the KPMG member firm in Mexico
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Mexico:
Alejandro Cervantes Laing | +52 (664) 608-65-22 | acervantes@kpmg.com.mx
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