On October 14, 2016, the Tax Administration Service (“SAT”) and its U.S. counterpart, the Internal Revenue Service (“IRS”), sent similar press releases to announce the culmination of two years of collaboration to establish a new transfer pricing procedure to avoid double taxation in the maquiladora industry.
This new framework proposes to solve more than 700 requests for criteria confirmation filed by companies of the maquiladora industry with SAT as of this date.
The details of taxpayers who may qualify to benefit from this agreement and the procedure and specifications to apply for such benefit, will be announced shortly by SAT. Those taxpayers that decline to apply for this new framework, may apply via the current “safe harbor” method.
The firm’s tax and foreign trade legal areas will be pleased to provide more details on this matter and its effects.
Mexico City, October 19th 2016.