With the consolidation of the United States-Mexico-Canada Agreement (USMCA), tax authorities in all three countries have intensified their oversight of intercompany transactions. This technical article analyzes the legal challenges multinational corporations face in complying with the arm’s length principle and avoiding costly tax adjustments and criminal penalties. We examine the latest OECD guidelines, the use of Advance Pricing Agreements (APAs), and best practices for legal defense against transfer pricing audits by the Mexican Tax Administration Service (SAT). Essential reading for finance directors and corporate tax advisors with cross-border operations.
