Multilateral Agreement For Automatic Exchange Of Transfer Pricing Documentation

On January 27, 2016, 31 Countries (among them Mexico) signed the Multilateral Competent Authority Agreement for automatic exchange of Country-by-Country reports (the "Agreement") to be received from their taxpayers as part of the implementation of Action 13 of the Base Erosion and Profit Shifting Action Plan issued by the Organisation for Economic Co-operation and Development.

The Agreement aims to tackle the tax elusion and unlawful profit shifting through the tax transparency on transfer pricing, so that tax authorities know how multinational enterprises (MNE) are structured, how they do business and how they pay taxes in each jurisdiction.

In case of Mexico, as of 2016 it was enacted a new section76-A to the Income Tax Law, which obliges Mexican MNE's to annually file a country-by-country report, in addition to the master and local reports that must all MNE's doing business in Mexico must file.