On June 1, 2026, the Organization for Economic Cooperation and Development (OECD) released a draft for public consultation that thoroughly modernizes Chapter VII of its Transfer Pricing Guidelines, which is dedicated to intra-group services. According to an analysis by the National Technical Committee on Transfer Pricing of the Mexican Institute of Finance Executives (IMEF), published in El Financiero, the revision adapts Transfer Pricing rules to the cross-border digital economy and substantially raises the bar for the Benefit Test, requiring multinational groups to more rigorously justify the financial substance behind each intra-group transaction. The comment period for this consultation closed on July 22, 2026, and its results will be discussed at an in-person OECD roundtable scheduled for November 2026.
The Benefit Test Is Raised to a Standard of Economic Substance
The first structural change reinforces a concept that already exists in the Transfer Pricing regulations of several countries but requires a higher standard of proof: the taxpayer must empirically demonstrate that the service received generated real economic or commercial value that improved or maintained the subsidiary’s position, and specifically prove that, had that service not been provided internally, the subsidiary would have had to contract it from an independent third party or perform it with its own personnel. The test is no longer a general description of the service but now requires concrete evidence of necessity and actual benefit.
Total Prohibition on Markups on Direct-Pass-Through Costs
The second change eliminates a frequent point of contention in audits of intra-group services: when the parent company acts solely as an intermediary or payment agent, without contributing real added value to the activity, the costs must be passed on to the subsidiary on a net basis, without any additional profit margin. This rule aims to prevent the application of an intermediary margin to costs that the parent company simply channels on behalf of the group.
A More Restrictive List of Shareholder Activities
The third change broadens and tightens the definition of so-called “shareholder activities”—those exclusively linked to the group’s corporate structure, such as the consolidation of financial statements or the organization of shareholder meetings. Under the draft, these costs must be fully absorbed by the group’s headquarters, with no possibility of passing them on or deducting them at the level of local subsidiaries. The practical effect is a reduction in the range of costs that can be justified as billable intragroup services.
The 5% fixed margin for low-value services is institutionalized
The fourth change reaffirms and consolidates the simplified approach that the OECD had already introduced for low-value-added services: multinational groups may aggregate these operating costs and apply a fixed profit margin of 5% to them, without needing to submit a supporting benchmarking study. In exchange for this simplification, tax authorities are expected to limit the intensity of their audits of the Benefit Test for these types of routine services, provided they remain within the parameters of the simplified approach.
Mandatory Advanced Methods for Complex and Intangible Services
The fifth change discourages the automatic use of cost-based methods—such as the Cost Plus method—for more complex services. When the service involves the use or creation of valuable intangibles, or when both parties share significant commercial risks, the draft stipulates that it is mandatory to evaluate the application of the Profit Split Method, analyzing the actual financial performance of each party within the value chain, rather than limiting the assessment to a margin over costs.
What This Means for Multinational Groups with a Presence in Mexico
The IMEF’s analysis notes that these changes are particularly relevant for multinational companies with operations in Mexico that exceed the revenue thresholds set forth in local legislation—13 million pesos for business activities, or 1,062 million pesos for the obligation to file informative affidavits under the BEPS standard— in a context where tax audit processes by the Tax Administration Service (SAT) have increased significantly. The IMEF’s Technical Committee itself recommends that multinationals validate and update their intra-group service documentation before the OECD’s in-person roundtables in November 2026, beginning now to assess the actual economic substance of their intercompany cash flows.
At TPC Group, we assist multinational groups with operations in Mexico and the rest of Latin America in assessing the impact of this revision to Chapter VII on their intragroup service documentation, and in preparing the economic substance that the new standard will require before its final version is released.
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