KPMG article: “Materiality” limits on deductions for services in Mexico

Tax assessments based on “materiality” often presented and negotiated like transfer pricing adjustments.

Download PDF
Share
June 23, 2025

Recent Mexican court rulings and administrative regulations introduced new guidance on the need to document “materiality” of services for which Mexican resident companies deduct payments.

Multinational companies need to carefully review service transactions involving Mexican subsidiaries to confirm that all substance and form requirements are met to secure the tax deduction for corporate income tax purposes and prevent potential tax assessments, which are often presented and negotiated like transfer pricing adjustments.

Read a June 2025 article* prepared by KPMG LLP and KPMG Mexico tax professionals that provides background on how the concept of “materiality” has evolved, analyzes the potential impact of new guidance, and explores best practices to strengthen the tax deductibility of service expenses paid by Mexican companies.

* Reproduced with permission from Tax Management International Journal, 6/23/2025. Copyright @ 2025 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's . Privacy Statement

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline