TRANSFER PRICING RULES FOR MAQUILADORAS

Foreign residents will not have permanent establishment for their legal and economic relationship with maquiladoras if they are residents of a country that has a tax treaty with México, and if the maquiladora complies with any of the following options:

Option 1
To maintain contemporaneous documentation on transfer pricing, adding to the result of such analysis 1 percent on the net book value of the fixed assets owned by the foreign-related company and that are used by the maquiladora in its activities.

Option 2
To report a taxable income profit of at least the greater of the following values:

  • 6.9 percent on assets used in the maquiladora activity (including inventories and fixed assets owned by the foreign-related party)
  • 6.5 percent on operating costs and expenses of the maquiladora


Option 3
To maintain contemporaneous documentation on transfer pricing, considering a return on the net book value of fixed assets owned by the foreign-related company and that are used by the maquiladora in its activities.

Maquiladoras that elect options 1 or 3 may request an advanced pricing agreement (APA) to the Mexican tax authorities. However, this APA will not be a requirement for compliance with any of the mentioned options. It is mandatory for the maquiladora to comply with the transfer pricing rules.
 

 

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