For the second time, the Tax Administration Service (SAT) and the Internal Revenue Service (IRS) of the United States of America have renewed the Agreement on the Qualified Maquiladora Approach (QMA). The objective of this agreement is to prevent double taxation for U.S. taxpayers with maquiladora operations in Mexico and to ensure proper taxation for maquiladora companies in Mexico by obtaining an Advance Pricing Agreement (APA) in accordance with Article 34-A of the Federal Fiscal Code (CFF) and Article 182 of the Income Tax Law.
In order to uphold the Arm’s Length principle, the Qualified Maquiladora Approach will apply to the issuance of pending unilateral APAs for the fiscal years 2020 to the present, in accordance with Article 34-A of the CFF, with the SAT’s General Administration of Large Taxpayers (AGGC), under the terms agreed upon by both tax authorities.
Below are the background details of the Qualified Maquiladora Approach.
Access to the methodology for issuing APAs for maquiladora companies in Mexico is available at this link.
