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Credit for Income Tax Paid Abroad by Mexican Entities
Credit for Income Tax Paid Abroad by Mexican Entities Mexican residents, whether individuals or legal entities, are required to include foreign-sourced income in their taxable base in Mexico. Without following the proper legal procedures, this can lead to double taxation. According to Article 1 of Mexico’s Income Tax Law, residents are subject to tax on
The Basics of Transfer Pricing Risk in the US and Consequences of non-Compliance
The Basics of Transfer Pricing Risk in the US and Consequences of non-Compliance For multinational enterprises (MNEs), navigating the global tax landscape can be a complex challenge. Transfer pricing, the practice of setting prices for goods, services, and intangibles traded between related parties within an MNE, plays a critical role. But failing to comply with
Simulation of intercompany transactions and Tax Fraud in Mexico
Simulation of intercompany transactions and Tax Fraud in Mexico One of the worst scenarios that a taxpayer in Mexico with transfer pricing obligations could face is carrying out intercompany transactions that could be classified as “simulation,” since this could be considered tax fraud, potentially resulting in severe consequences. What situations can trigger this allegation? In
IRS-SAT renew the Qualified Maquiladora Approach Agreement for the second time
IRS-SAT renew the Qualified Maquiladora Approach Agreement for the second time For the second time, the Mexican tax authority, Servicio de Administración Tributaria (SAT) and the Internal Revenue Service (IRS) of the United States of America have renewed the Qualified Maquiladora Approach (QMA) Agreement, with the goal to avoid double taxation for U.S. taxpayers with
