October–November 2025
During the last quarter, Mexico saw significant developments that redraw the enforcement landscape for multinational groups. The SAT published new risk criteria for 2026 audits, the Supreme Court resolved an emblematic case with direct implications for transfer pricing, and the OECD recognized the country’s capacity in APAs and MAPs. The message is clear: Mexico’s technical sophistication and audit capacity continue to advance rapidly.
1. SAT’s New Risk Criteria for 2026 Audits
The SAT announced the parameters it will use to select audits of Large Taxpayers starting in 2026. While these are not specific transfer‑pricing regulations, several of the criteria are directly linked to compliance under this regime — such as economic substance, evidence of operations, and results from intercompany transactions.
Top Transfer‑Pricing Risks under the New Criteria
Recurring Tax Losses
Mexican subsidiaries with limited‑risk profiles that report sustained losses will be under immediate scrutiny. Corporate restructurings that have resulted in limited‑risk distribution models or contract manufacturing have long been considered high‑risk by the tax authority. If such entities continue to report losses, the SAT may question why they were not shielded from financial effects of risks — calling into question the legitimacy of those losses.
What to do: Review the consistency of your group’s transfer pricing policies in accordance with the BEPS framework and the Mexican regulatory context.
Intercompany Payments Without Substance (services, royalties, technical assistance, financing)
The SAT will increase scrutiny over the materiality of intercompany payments. For services, it will verify the capacity to provide and receive the service, the economic logic, and evidence of benefit. For intangibles, it will evaluate the existence of the asset, who performs the value‑generating activities, and what independent third parties would pay. For financing operations, it will assess whether the structure makes economic sense compared to market alternatives. Even with formal documentation, any operation may be recharacterized as simulated if its substance is not demonstrable.
What to do: Strengthen operational evidence and functional analysis; document benefits and economic rationale for every payment.
Inconsistencies Between Tax Value and Customs Value
The authority will push reviews when imported goods are declared at below‑market values or fail to meet regulatory or non‑tariff compliance. This can lead to simultaneous fiscal and customs adjustments.
What to do: Ensure total consistency between the transfer pricing study, customs declarations and applicable regulations.
Transactions With Entities in REFIPRE Jurisdictions
Any transaction with low‑tax or preferential‑tax jurisdictions will trigger automatic scrutiny. Payments to entities in preferential tax regimes are presumed not to have been negotiated at arm’s length, unless proven otherwise. Therefore, the taxpayer must demonstrate business purpose, economic substance, and comparability to independent parties.
What to do: Prepare comprehensive documentation of the beneficiary, cash flows, contracts and transfer‑pricing analysis to support arm’s‑length conditions for operations involving tax‑haven jurisdictions.
Takeaway: The new SAT criteria are a clear preview of the types of adjustments that the authority will pursue in 2026. Defense can no longer be reactive: real economic alignment, impeccable documentation and continuous monitoring are required.
2. Adverse Judicial Environment: The First Majestic Case
The decision by the Supreme Court in the case of Primero Empresa Minera (First Majestic) confirms a worrying trend: higher courts are showing increased deference to the SAT and a decreasing willingness to review the technical merits of transfer pricing disputes.
The case — involving a tax liability exceeding MXN 2,868 million — was dismissed without examination of the factual substance, upholding the adjustment. The previously granted injunction was dissolved immediately. Notably, the controversy remains pending before the International Centre for Settlement of Investment Disputes (ICSID) under the World Bank framework.
Implications for Taxpayers
- Injunctions and amparo relief no longer guarantee effective protection.
- Judicial review of methodologies and technical arguments is now highly uncertain.
- Companies may be forced to pay substantial tax liabilities without technical review or recourse.
- The only truly effective defense is a preventive one, based on robust structural design.
Takeaway: Relying on litigation is no longer viable. Structures must be sound from the start and capable of withstanding technical scrutiny.
3. OECD Recognition: Efficiency and Technical Capacity
The OECD recognized Mexico as a global leader in MAP resolution and among the jurisdictions with greatest progress in APAs. These recognitions indicate:
- Increased technical capacity of the SAT.
- Efficiency in processes, though often after aggressive audits have already occurred.
- APAs remain costly, complex, and subject to limited validity.
In many cases, a preventive strategy based on solid annual documentation and continuous operational monitoring offers a better cost‑benefit balance than an APA.
Conclusions
- Mexico is consolidating one of the most sophisticated audit environments in the region.
- 2026 audits will focus on economic substance, documentation integrity, and consistency across fiscal, customs and operational areas.
- Judicial recourse offers diminishing certainty.
- APAs and MAPs remain useful only when supported by strong fundamentals and reserved for strategic cases.
- Today, the real defense is preventive: robust structures, coherent documentation, and operational execution aligned with the value chain.
How QCG Transfer Pricing can help
At QCG Transfer Pricing we assist multinational groups in proactively managing risk and strengthening their position before the authorities by offering:
- Design and comprehensive review of transfer pricing policies grounded in real economic substance.
- Strategic assessment of when pursuing an APA makes sense and how to structure it effectively.
- Expert support in alternative dispute resolution mechanisms, including Conclusive Agreements before PRODECON.
- High‑level technical and expert support in tax litigation to reinforce legal defense.
With over 25 years of experience, we understand that today, the competitive advantage lies in having a transfer pricing system that holds up under scrutiny. If your group operates in Mexico, we are ready to support you.
