Mexico Enacts CbC Reporting Regime

Mexico has recently gazetted new transfer pricing documentation requirements, which will be effective from the 2016 tax year.

The legislation was submitted to Congress by the Government on September 8, 2015, and published in the Official Gazette at the end of November.

It will introduce the country-by-country (CbC) reporting framework developed by the OECD as part of its work on Action 13 of its base erosion and profit shifting (BEPS) project. Certain large taxpayers will be required to furnish a master file, providing an overview of the multinational group’s affairs; and a local file, including a detailed transfer pricing study and explanation, a group organization chart, and information on related-party transactions. In addition, the CbC report should include financial data covering operations in each country where the MNE operates.

The regime will apply to those entities with taxable income greater than MXN644.6m (USD37.7m), among other entities, such as those whose shares are publicly traded. Penalties of up to MXN200,090 will apply for non-compliance.

These reports will need to be filed, for the first time, by December 31, 2017, for the 2016 fiscal year.