Miscellaneous Fiscal Resolution for 2020

This past 9 January 2020 the Official Gazette of the Mexican Federation[1] published the official modification of annexes 3, 5, 7, 8 and 11 [DSG1] of the Miscellaneous Fiscal Resolution[2] for 2020. With regards to transfer pricing, there were no modifications to the regime that could alter taxpayer obligations that carry out operations with related parties. The normative and non-binding criterion relevant to the regime are the following:

ANNEX 3 OF THE MISCELLANEOUS FISCAL RESOLUTION 2020

Non-binding Criteria LISR[3]

4/ISR/NV         Royalties for intangible assets originating in Mexico paid to related parties’ resident abroad.

39/ISR/NV       Recognizing unique and valuable contributions. Transfer pricing analyses should acknowledge these contributions to demonstrate that in operations carried out with related parties the income and deductions were authorized and were determined considering that the prices and amounts paid in these operations would have been used by or among independent third parties in comparable operations.

40/ISR/NV       Modifications to the value of operations with related parties within the interquartile range.

ANNEX 7 OF THE MISCELLANEOUS FISCAL RESOLUTION 2020

Compilation of normative criterion

9/CFF/N          Resolution of queries relating to the methodology employed to determine the prices or amounts in operations with related parties, subject to individuals competent to formulate [DSG2] questions to the tax authorities.

26/ISR/N         Thin [DSG3] capitalization. Foreign exchange loses are not deductible, accrued by the fluctuation of foreign currency that is derived from the debt that exceeds three times the taxpayer’s capital and originate from debts incurred with foreign related parties.

32/ISR/N         Corporations[4] that carry out operations with related parties’ resident in Mexico. Documentation and supporting information.

33/ISR/N         Corporations. Concept of related party.

34/ISR/N         Corporations that carry out operations with related parties without regard to their tax residency. Compliance of obligations.

35/ISR/N         Corporations that carry out operations with related parties. Application of the OECD Transfer Pricing Guidelines.

57/ISR/N         Simulation of legal proceedings in operations among related parties. Income from a source of wealth in the country may be determined for any entity with the obligation to pay the tax.[DSG4] 

60/ISR/N       Maquila operations with regards to the effects of the IMMEX Decree. Percentage of machinery and equipment used.

You may consult the original publication (in Spanish) at the following:

https://www.dof.gob.mx/nota_detalle.php?codigo=5583666&fecha=09/01/2020

We are at your disposal for any question or clarification of the previous.

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