Transfer price studies

The Mexican tax authorities are becoming more and more scrupulous in auditing transactions conducted between companies residing in Mexico and their related parties in other countries and in Mexico. In line with the guidelines of the Organisation for Economic Cooperation and Development (OECD), of which Mexico is a member, the main purpose of these studies is to establish the essence of these transactions, in other words, if they are actually conducted and at their normal market value and that their value is justifiable in economic terms. In accordance with Mexican tax laws, all taxpayers are required to carry out studies that show that the transactions conducted with related parties during the calendar year were conducted at normal market value.

Nevertheless, price transfer studies are not only required to meet this particular tax obligation as they have a broader application, mainly strategic, in that they are also carried out to set values (fair prices) before transactions are conducted, which means that the tax burden between the parties involved may be better defined. Price transfer studies also form the basis for setting sale and service prices based on the trends for similar products and services in specific industries and businesses.

Our specialists in this area advise our customers on transfer prices for tax purposes and strategic purposes when setting the price and value of transactions conducted with related parties and third parties, in accordance with the best international business practices.