MEXICO Law and Practice Contributed by: Jesús Aldrin Rojas, Miguel Ángel García Piña and Esteban Ollervides Toribio, QCG Transfer Pricing
a rigorous application of the DEMPE analysis to justify the deduction of payments to related parties for complex intangibles. • Criterion 34/ISR/NV relates to adjustments to the value of transactions with related parties within the interquartile range. It allows the authority to adjust the price to the midpoint of the range when the agreed value is not within the interval, unless suf - ficient technical evidence is provided. These guidelines emphasise that, even when simpli - fied determination methods such as safe harbours are applied, compliance with documentation require - ments and evidence of materiality remain essential for deductibility and for defending against transfer pricing adjustments. 11.4 Financial Transactions With the 2022 tax reform, Mexico introduced changes to the thin capitalisation rules, as well as to the rules derived from Action 4 of the BEPS Plan. These chang - es affect the deductibility of interest on transactions with related parties. Chapter X of the OECD Transfer Pricing Guidelines has a supplementary role in Mexico. The Income Tax Law expressly provides for the application of the Guidelines in situations where specific Mexican regu - lations do not exist. 12. Co-Ordination With Customs Valuation 12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation The rules are not co-ordinated. 13. Controversy Process 13.1 Options and Requirements in Transfer Pricing Controversies The first available defence mechanism is the con - clusive agreement, which may be requested before PRODECON (the Taxpayers’ Defence Office) during the exercise of audit powers and prior to the notifica - tion of a tax assessment. This mechanism allows for
the suspension of the audit and facilitates a negoti - ated resolution with the tax authority regarding the qualification of the facts. It can lead to a reduction in penalties and, in some cases, to the arrangement of payment facilities (Articles 69-C to 69-H of the Federal Tax Code (CFF)). It is worth noting that there are more than 150 cases before PRODECON that directly or indirectly involve transfer pricing. If no agreement is reached, or if a tax assessment is issued, the taxpayer may opt to file a revocation appeal, as provided in Articles 116 to 133-G of the CFF. This optional administrative remedy is filed before the same authority that issued the challenged act and does not require a guarantee of the fiscal interest in order to suspend enforcement. Although the resolu - tions issued are often confirmatory, this appeal rep - resents a valuable opportunity to submit evidence, technical studies or other supporting elements that could not be presented during the audit process. In addition, the November 2025 reform introduced the exclusive substantive appeal ( recurso de revocación exclusivo de fondo ), governed by Articles 133-B through 133-G of the Federal Tax Code. This remedy allows taxpayers to challenge exclusively the sub - stance of a tax assessment, including transfer pricing determinations, by raising arguments related to the subject, object, tax base, rate or tariff, without the need to address formal or procedural defects. Key features of this mechanism include the following. • The taxpayer may request an oral hearing before the resolving authority, with the attendance of the issuing authority (Article 133-E). • The taxpayer may submit expert opinions, and the resolving authority has the discretion to appoint its own expert and to cross-examine the taxpayer’s expert (Article 133-F). • A guarantee of the fiscal interest is not required to suspend enforcement. If the taxpayer raises both substantive and formal arguments, only the substantive arguments will be resolved.
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