From Mexico: New Advance Pricing Agreements (APA) Regulations
Andersen Tax & Legal, the Mexican Member Firm of Andersen Global
If you have any clients with manufacturing operations in Mexico through a related party, new APA regulations have been published by the tax authorities. Among others, a new maquiladora classification has been issued (either labor or capital intensive) as well as an alternative to fix a mark-up based on its industry (electronic, automotive, etc.). What stands out the most is the allowance to obtain an APA under a fast track procedure; in any case, maquiladoras may choose between the safe harbor procedure or regular APA procedure. Finally, it is important to consider that APA current regulations allow taxpayers to ask for a mark-up approval up to a four-year period.
Opportunities to Obtain Benefits on R&D Investments
If you have any clients planning to invest on R&D, the Mexican Congress has reintroduced a benefit on said expenses, consisting of a tax credit equivalent to a 30% of the R&D investments done in Mexico. This credit is applicable against Income Tax computed on the same fiscal year. Taxpayers shall request for the authorization as well as comply with certain obligations.
Please contact Andersen Tax & Legal in Mexico for additional information.