In 2024, the Internal Revenue Service (IRS) of the United States and the Mexican Tax Administration Service (SAT) renewed the Agreement regarding the Qualified Maquiladora Approach (QMA). This marks the second renewal of the agreement within the 2018-2024 administration, originally established between the competent authorities of the United States and Mexico in 2016.
This renewed agreement preserves the core elements of the QMA’s transfer pricing framework, which was applicable to fiscal year 2019 and earlier. Both countries’ authorities concluded that this framework continues to produce results consistent with the arm’s length principle, ensuring fair pricing and taxation practices for maquiladoras.
According to the agreement, only those maquiladoras that have requested, obtained, and correctly implemented a resolution corresponding to fiscal year 2019 and previous years, or that obtain an applicable resolution for fiscal years 2020 to 2024, are in compliance with Article 182, first paragraph of the Mexican Income Tax Law (LISR). Importantly, these resolutions must not be subject to any dispute. If a resolution has been challenged through any means of defense, it must be withdrawn, and the resolution must be correctly implemented, or the provisions of Article 182 must be correctly applied.
The renewal of the QMA agreement is the culmination of collaboration between the competent authorities of Mexico and the United States. This joint effort addressed the inventory of requests for unilateral resolutions issued by the SAT under Article 34-A of the Federal Tax Code, which involves maquiladoras. This ongoing cooperation aims to ensure the continued effectiveness and compliance of transfer pricing practices between the two countries.
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