Readings > How can Guerrero & Santana help to design, implement and manage compliant transfer pricing solutions

With Guerrero Santana transfer pricing, companies can fully streamline operations and movements of funds conducted within their organizations, while managing risk with foreknowledge and intelligence.

Recent reforms in Mexico have created new challenges for our clients, but also new opportunities, and our team of financial analysts ensure that our clients’ transfer pricing practices are designed, implemented and managed with full awareness of all the most up-to-date and relevant regional, national and international information.

Mexico transfer pricing rules stick closely to OECD guidelines, with the basic principle that transactions between related domestic and foreign entities experience the same tax conditions that would occur between independent organizations making similar transactions (the Arm’s Length Principle, or ALP).

Transactions that fall beneath the transfer pricing rules umbrella are:

• The use and transfer of tangible assets and intangible assets (such as stocks and bonds)
• The supplying or receiving of services
• Financial operations

And there are six transfer pricing methods in Mexico to which distinct rules apply:

• Comparable uncontrolled price method (CUP)
• Resale price method (RPM)
• Cost plus method (CPM)
• Profit split method (PSM)
• Residual profit split method (RPSM)
• Transactional operating margin method (TOPMM)

The taxpayer will employ the method they deem most appropriate according to the specifics of the transaction, providing documentary evidence at request to explain these transactions.

But where authorities consider there to have been an improper application of a transfer pricing method, adjustments are made by the tax authority, and the unpaid tax requested, with a possible fine of up to 75% of the adjusted amount.

How We Can Help

Our experts in international-finance analysis use Guerrero Santana’s extensive international network and cutting-edge systems to design, implement and manage compliant transfer pricing solutions that are integrated, aligned with company operations, and conscious of our clients’ short and long-term objectives.

With Guerrero Santana’s intelligent transfer pricing practices, our clients remain fully optimized, and aware of crucial regional, national and international tax developments.