Mexico has been a proactive adopter of the OECD’s Base Erosion and Profit Shifting (BEPS) framework, including the implementation of Country-by-Country Reporting (CbCR) as part of Action 13. Since 2016, multinational enterprise (MNE) groups operating in Mexico have been required to comply with specific transfer pricing documentation obligations, including CbCR, to improve tax transparency and prevent profit shifting.

This guide provides an overview of the CbCR obligations in Mexico, outlines the legal framework, reporting requirements, and penalties for non-compliance, and offers links to official resources.

Legal Framework and Authority

• Authority: Servicio de Administración Tributaria (SAT) – Mexican Tax Administration Service
• Legislation:
  • Article 76-A of the Mexican Income Tax Law (Ley del Impuesto sobre la Renta, LISR)
  • Transfer Pricing Guidelines and administrative rules issued by SAT
  • OECD BEPS Action 13 standards adopted into domestic law

CbCR Filing Requirements

• Who Must File:
  • Mexican-resident entities that are the ultimate parent entity (UPE) of a multinational group with consolidated revenue of MXN 13 billion or more in the preceding fiscal year.
  • Mexican subsidiaries or permanent establishments must file the CbC report if:
    • The UPE is not obligated to file in its jurisdiction,
    • There is no automatic exchange of information agreement with Mexico,
    • Or there has been a systematic failure to exchange.
• Filing Deadline:
  • December 31 of the year following the reporting fiscal year.
• Submission Format:
  • The CbC report must be submitted electronically via SAT’s platform using the official XML schema in accordance with OECD standards.

Documentation Package

Mexico requires a three-tiered documentation approach:

1. Master File – Global operations, policies, and structure of the group.
2. Local File – Specific intercompany transactions of the Mexican entity.
3. CbC Report – Aggregate information by jurisdiction.

Penalties for Non-Compliance

Failure to comply with CbCR requirements may result in:

• Fines ranging from MXN 140,540 to MXN 200,090 per infraction.
• Additional fines for not filing the report on time or for submitting it with errors or inconsistencies.
• Disqualification from tax benefits or credits in severe cases.

Important Considerations

• CbC reports must be accurate, consistent, and aligned with other transfer pricing documentation.
• Mexico participates in the automatic exchange of CbC reports with other jurisdictions through the Multilateral Competent Authority Agreement (MCAA).
• MNEs should ensure proper internal coordination to consolidate financial and tax data across jurisdictions.

Useful Links and Resources

• SAT official site (CbCR guidance and submission portal): https://www.sat.gob.mx
• OECD CbCR Guidance: https://www.oecd.org/tax/beps/country-by-country-reporting.htm
• Mexican Income Tax Law (LISR): https://www.diputados.gob.mx/LeyesBiblio/pdf/LISR.pdf