Article 76-A of the Mexican Income Tax Law (Ley del Impuesto sobre la Renta, LISR) outlines specific obligations for taxpayers involved in transactions with related parties. These obligations focus on filing annual informative declarations to ensure compliance with transfer pricing rules and transparency in multinational operations. Below are the key details:

Obligations Under Article 76-A

Taxpayers required to comply with this article include:

• Entities engaging in transactions with related parties.
• Multinational groups.
• State-owned entities under federal public administration.
• Foreign residents with permanent establishments in Mexico.

Required Informative Declarations

1. Master Informative Return: Provides an overview of the multinational group, including organizational structure, business activities, and financial information.
2. Local Informative Return: Details specific transactions with related parties within Mexico.
3. Country-by-Country Informative Return: Includes global allocation of income, taxes paid, and business activities by jurisdiction for multinational groups.

Deadlines

• The Master and Country-by-Country returns must be submitted by December 31 of the year following the fiscal year in question.
• The Local Informative Return is due by May 15 of the year following the fiscal year.

Additional Provisions

The Mexican tax authority (Servicio de Administración Tributaria, SAT) may establish general rules for these declarations, including formats and additional information requirements. In cases where international treaties fail to provide necessary data, SAT can request these declarations directly from taxpayers within a maximum period of 120 business days after notification.

This article aims to enhance transparency and compliance in cross-border transactions, aligning Mexico’s tax framework with international standards like the OECD’s Base Erosion and Profit Shifting (BEPS) initiative.