New Substance-Over-Form Litigation Procedures In Mexico

Mexico has introduced new substance-over-form procedures that change the country's formal approach into one more compliant with the BEPS Project. Taxpayers should take note of these developments as they may impact tax disputes, writes Bernardo Ramírez and Valentín Ibarra of Chevez, Ruiz, Zamarripa y Cía.

Resulting from a G20 world leaders' request, the OECD created an action plan to deal with base erosion and profit shifting (BEPS) issues. The 15 actions of this plan provide governments with instruments to confront tax avoidance and seeking to tax profits in the jurisdiction where the economic activity is performed, considering the actual economic nature and substance of the said activity.