Business Purpose, Economic Substance, and Transfer Pricing: The New Trilogy of Mexican Tax Audits
In multinational groups, the question comes up often: why is a related-party transaction challenged when there is a contract, a CFDI electronic invoice, documented payment, and a transfer pricing study?
The answer is direct: tax audits no longer look only at form. Today, Mexico’s tax authority (the SAT) examines whether the transaction had a business purpose, whether it had economic substance, and whether its consideration was set in line with the arm’s length principle. The analysis is no longer documentary — it is structural.
May 15, 2026