Heightened scrutiny on Transfer Pricing and proactive steps by taxpayers to prepare for an inspection
In recent years, tax authorities worldwide have significantly intensified transfer pricing audits, and Mexico is no exception. According to Mexico’s proposed budget for 2025, income tax revenue is projected to reach approximately 3 billion pesos. Coupled with the absence of major tax reforms in the 2025 Economic Package, this suggests that a substantial portion of this revenue will stem from audit enforcement activities, particularly in the area of transfer pricing.
It is important to note that being selected for an audit does not necessarily imply non-compliance or the use of aggressive tax strategies. The technical complexity of transfer pricing often places even the most diligent taxpayers at risk of assessments.
Transfer Pricing audits be triggered by various factors, including:
- Random selection
- Operating at a loss
- Reporting profit margins deemed “below industry standards”Â
- Revenue declines, often due to investments or other legitimate reasons.
Transfer pricing audits commonly target:
- Financing arrangements.Â
- Intellectual property licenses.
- Business restructurings.
- Risk and function allocations.Â
Proactive preparation is essential for taxpayers with transfer pricing obligations.
QCG Transfer Pricing and Clark Hill have formed a strategic alliance creating a group of expert accountants and tax lawyers dedicated to providing comprehensive transfer pricing support. Through legally grounded and highly technical solutions we ensure that your business is prepared to face any transfer pricing inquiry from the authorities, aligning your tax strategy with your business objectives.
Do not let an audit jeopardize your business. Contact us for a consultation and discover how we can optimize your transfer pricing strategy transforming it to a value driver in an increasingly stringent regulatory environment.
