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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
How to avoid risks of recharacterization or disregard of intercompany transactions?
How to avoid risks of recharacterization or disregard of intercompany transactions? In the day-to-day operations of a multinational group, it is common for related parties within the group to engage in various types of transactions. Purchases, sales, licensing, services, and financing are part of daily operations. But what happens when these transactions are incorrectly characterized
Intercompany transactions and the market value trap
Intercompany transactions and the market value trap The most important obligation of taxpayers under transfer pricing regulations is to demonstrate that the transactions were conducted in accordance with the “arm’s length” principle, which is based on Article 9 of the Model Tax Convention of the Organization for Economic Cooperation and Development (OECD), as follows: “If
