MEXICO Law and Practice Contributed by: Ángel Escalante, Gabriel Rojas, Daniel Colunga and Brenda Favela, Escalante & Asociados
transactions. These activities are typically supported by international legal instruments such as the Multilat - eral Convention on Mutual Administrative Assistance in Tax Matters and bilateral tax treaties containing pro - visions on exchange of information and administrative co-operation. Also, as a member of the OECD, Mexico also active - ly participates in international working groups and forums on tax administration, exchange of information and the development of international tax standards. 8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis Mexico operates a mutual agreement procedure (MAP) framework under its tax treaties. Therefore, the national tax administration has issued a specific administrative procedure for requesting the initiation of a MAP under a double taxation treaty. This pro - cedure is described in administrative form 102/CFF, which is included in Annex 2 of the Miscellaneous Tax Resolution for 2026. The procedural requirements and legal basis for the MAP are provided in both the FFC and the MITL, as well as in the relevant tax treaties. 8.2 Application Deadlines The deadline for submitting a MAP request is primarily determined by the provisions of the relevant double taxation treaty, which typically follow Article 25 of the OECD Model Tax Convention and provide a time limit generally three years from the first notification of the action that resulted in taxation not in accordance with the treaty. This treaty based time limit is expressly recognised in domestic administrative provisions, particularly in Rule 2.1.29 of the Miscellaneous Tax Resolution and the corresponding Form 102/CFF contained in its Annex 2. 8.3 Mandatory Binding Arbitration From an international tax perspective, mandatory arbitration is not generally available in Mexico.
Mexico has not adopted arbitration clauses as a standard feature in its double taxation treaties, and therefore disputes arising under the MAP are typically resolved through negotiations between competent authorities, without recourses to binding arbitration mechanisms. At a domestic level, however, Mexican law provides several alternative dispute resolution mechanisms, which, while not equivalent to arbitration, aim to facili - tate the resolution of tax controversies and include: • Administrative Conclusive Agreements – an ADR mechanism that allows taxpayers to reach an agreement with the tax authorities, during a tax audit, in order to regularise their tax situation before a final determination is issued. • The General Law on Alternative Dispute Resolu - tion Mechanisms ( Los Mecanismos Alternativos de Solución de Controversias or MASC) – enacted in Mexico in 2024, this introduces mechanisms such as negotiation, mediation and conciliation in administrative matters. Under Article 34 of the FFC, tax authorities may issue binding rulings regarding the methodology used to determine transfer prices or the amount of considera - tion in transactions between related parties, provided that the taxpayer submits the information and docu - mentation necessary for the authorities to evaluate the request. These rulings may be made conditional upon the tax - payer demonstrating that the transactions covered by the agreement are conducted at arm’s length, consist - ent with the prices or margins that would have been agreed upon by independent parties in comparable transactions. Such ruling may have effect: 9. Dispute Prevention 9.1 Advance Pricing Agreements
• in the tax year in which the request is filed; • in the immediately preceding tax year; and • for up to three subsequent tax years.
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