In recent years, Mexico has strengthened its tax auditing mechanisms, targeting large multinational corporations particularly. According to recent reports, the SAT (Servicio de Administración Tributaria – Tax Administration Service) has recovered billions of pesos through targeted audits and reviews, demonstrating a shift toward stricter control of taxpayers with greater economic significance.
Strategic Tax Audit: Large Taxpayers Under Scrutiny
The SAT focused on so-called large taxpayers, i.e., those with a significant volume of operations and, due to their corporate complexity, tend to implement sophisticated tax structures. This group comprises both domestic and foreign companies with local affiliates, which represent a significant portion of total tax revenue.
The agency has intensified both the frequency and depth of its audits. Current reviews assess expense deductions, financial report transparency, and, particularly, the application of Transfer Pricing rules.
The Transfer Pricing Role in Tax Collection
A central focus of these actions relates to related party transactions. In many cases, multinationals transfer profits to tax havens through intra-group pricing policies that do not reflect the Arm’s Length Principle.
The SAT, aligned with the OECD’s recommendations, has strengthened its verification of whether the prices agreed between affiliates in Mexico and their parent companies or subsidiaries abroad correspond to market values. This control aims to prevent tax base erosion and ensure a fair generation of profits in Mexico.
Results and Shocking Figures
The amounts recovered now exceed several billion pesos, which not only reflects the magnitude of the transactions in question but also the SAT’s institutional capacity to identify risk areas. The strategy has enabled an increase in tax collection without imposing new taxes, focusing on the correct application of current regulations. From 2019 to 2024, the amount collected reached 106.178 billion pesos, representing a 367% increase compared to the 28.966 billion pesos collected during the 2013-2018 period.
Beyond the figures, these results demonstrate to corporations that tax evasion and avoidance through aggressive structures carry significant risks. Ongoing reviews encourage companies to enhance their tax compliance policies.
Implications for Businesses
Strengthened enforcement poses new challenges for multinationals operating in Mexico. Compliance is no longer limited to filing returns promptly and correctly; it now requires comprehensive documentation to support related-party transactions and the reasonableness of tax policies.
Furthermore, this scenario is linked to international trends, such as the BEPS (Base Erosion and Profit Shifting) project promoted by the OECD and the G20, which encourages transparency and the exchange of information among tax administrations.
Conclusion
The SAT’s offensive against improper tax practices in large multinational companies reflects a structural change in Mexican tax administration. With a strategic focus on Transfer Pricing and intra-group transactions, the agency seeks not only to increase tax collection but also to strengthen fairness and confidence in tax systems.
In this new context, companies must adopt a proactive stance, strengthening their internal controls, reviewing their Transfer Pricing policies, and prioritizing transparency to mitigate risks for increasingly sophisticated tax audits.
Source: MegaNoticias