sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« Transfer Pricing »
 Private Company, New Delhi
 Motilal Nehru National Institute Of Technology, Allahabad, Uttar Pradesh
 I-T tribunal sends back Microsoft transfer pricing case to tax officer
 Transfer Pricing Adjustment - Status and Way Forward
 Transfer Pricing in India Explained
  Doing business in India: ‘Substance’ over ‘form’ in transfer pricing regime
 Tax authorities focus on transfer pricing adjustments
 Transfer Pricing: The AMP Issue Keep Oscillating
 Transfer pricing-A reputational risk?-Moore Stephens
 Department Of Consumer Affairs, Ahmedabad, Gujarat
 Polish transfer pricing guidance would alter low-value transactions, loans, documentation

US, Mexico Agree Landmark Transfer Pricing Deal
October, 25th 2016

The US Internal Revenue Service has announced that US taxpayers with maquiladora operations in Mexico will not be exposed to double taxation if they enter into a standard unilateral advance pricing agreement (APA) with the Mexican tax authority, Servicio de Administración Tributaria (SAT).

The IRS said that it had discussed the matter with SAT and had come to an agreement on terms for US companies.

Maquiladoras are Mexican companies that process, transform, assemble, or repair imported materials, parts, and components into finished goods that are subsequently exported out of the country. In 1999, the US and Mexican competent authorities reached an agreement on transfer pricing and other aspects of the tax treatment of maquiladoras of US multinational enterprises.

This new agreement updates and expands upon the 1999 agreement to reflect recent revisions to Mexican domestic tax rules governing transfer pricing rules, documentation requirements, and other tax attributes of maquiladoras, the IRS said on October 14.

The centerpiece of the discussions between the competent authorities is an election SAT would extend to qualifying taxpayers with pending unilateral APA requests. These taxpayers may elect to apply a transfer pricing framework that the US and Mexican competent authorities have agreed in advance will produce arm's length results. Qualifying taxpayers that decline the election may apply the safe harbors provided by the 1999 Agreement or file a request for a bilateral APA with the US and Mexican competent authorities, the IRS said.

The IRS stressed that the transfer pricing results set forth in unilateral APAs executed between SAT and Mexican affiliates of US taxpayers pursuant to the program will be regarded as "arm's length" under section 482 of the Internal Revenue Code. It added that the SAT will release details shortly about the election and will directly notify qualifying Mexican taxpayers about the steps they must take with regard to their pending unilateral APA requests.

The IRS said: "This announcement represents the culmination of two years of collaboration between the competent authorities to address SAT's current inventory of approximately 700 pending unilateral APA requests in the maquiladoras industry. It is an important step forward in strengthening ties between the two governments and will provide certainty in the taxation of multinationals."

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions