Challenges Regarding Transfer Pricing Documentation in Mexico

This article describes the main obligations regarding transfer pricing documentation for Mexican taxpayers, which in general have been described by taxpayers as a significant burden considering contemporaneous transfer pricing documentation, information for the annual tax report and the three-tier documentation commonly known as the Local File, Master File and country by country report. Also, it describes the current challenges for taxpayers to comply with current tax provisions and guidelines to gather information for comparable companies at the time of filing documentation with the Mexican tax authorities. This article provides high-level guidance for multinationals so they can understand the current challenges around transfer pricing obligations in Mexico and anticipate additional efforts needed to comply within time frames established in Mexico.