Transfer pricing methods

The Mexican Income Tax Law establishes the methods to be used for the valuation of intercompany transactions:

Considers a third party price for identical goods, services,

or property under identical conditions.

Analyzes that a purchase of a product from its related

part has been made at market prices (distribution companies).

It is used in the marketing of semi-finished goods or services (manufacturing companies and service providers).

Total enterprise profits are split in a formulary manner based on econometric analyses.

Residual profit split method

Profits are allocated based on contribution of each company.

Transactional net margin method

It is based on profitability of similar businesses.