Defense of TP audits, controversies, MAPs, and APAs

The service consists of advising and accompanying the client in administrative processes under which tax authorities, in the exercise of their audit powers, require the taxpayer to demonstrate compliance with specific transfer pricing regulations.

Additionally, there are mechanisms (MAPs and APAs) under which taxpayers can request tax authorities’ intervention or confirmation of criteria regarding their intercompany transactions and the results obtained therein.

Why is it necessary?

Because during an audit the tax authority challenges intercompany transactions using highly specific technical criteria, and the responses must be supported by the economic analysis behind the prices agreed. Having a transfer pricing specialist alongside legal counsel makes it possible to explain and document the taxpayer’s position within the deadlines set by the procedure.

Scope

There is no specific deliverable; it is case by case and will depend specifically on the requirements of the tax authorities.

Related Consultants

Roberto González Morelos

Transfer Pricing

Jorge E. Castellón

Transfer Pricing

Emilio Camero Luna

Transfer Pricing

José Luis Parada

Transfer Pricing

Frequently Asked Questions

Is it necessary to have the support of a transfer pricing specialist in the event of a review by tax authorities, or is the support of an attorney sufficient?

It is not indispensable but it is advisable. While it is true that the attorney could follow the process, technical knowledge is essential when providing information and responding to certain inquiries from the authority.

Do I need to request a confirmation of criteria or APA, or is maintaining the Transfer Pricing Study sufficient?

It is not mandatory to request an APA; however, in cases where transactions are highly significant and a potential adjustment during a review by tax authorities could affect results and even generate a case of double taxation, it is recommended to request one in order to obtain legal certainty regarding policies and results of intercompany transactions.

Can I reach an agreement with the authority without going to court?

Yes. A conclusive agreement before PRODECON allows differences to be settled during the audit, before an assessment is issued. In transfer pricing this is often the most efficient route when the disagreement is one of technical criteria rather than omission.

What are MAPs and APAs, and when should they be used?

A MAP is the mutual agreement procedure between the authorities of two countries, useful when an adjustment creates double taxation. An APA is an advance agreement on pricing methodology, providing certainty going forward. The first resolves an existing problem; the second prevents it.