Maquiladoras and Transfer Pricing in Mexico 2026: the Safe Harbo, the apa and the bapa
Technical analysis for multinational groups in the manufacturing and IMMEX sectors
Executive Summary
As of the 2022 reform, the option to apply for unilateral Advance Pricing Agreements for Transfer Pricing purposes, commonly known as APAs, was eliminated for the maquiladora industry. The last applications, filed through the end of 2021, may cover, pursuant to Article 34-A of the Mexican Federal Tax Code (Código Fiscal de la Federación, CFF), up to fiscal year 2024. As a result, as of 2025 the Safe Harbor set out in Article 182 of the Mexican Income Tax Law (LISR) is, in practice, the only available compliance route for any maquiladora that does not hold a bilateral agreement.
Against that backdrop there are two solutions to mitigate its impact: negotiating a Bilateral Advance Pricing Agreement (BAPA) or migrating to the general tax regime as a contract manufacturer (a toll or contract model).
There is also a group with an immediate priority: companies that still have an APA filed and unresolved, whose file should be brought to conclusion as soon as possible.
Accordingly, for asset-intensive companies, primarily automated plants, high-technology machinery held under comodato¹, consigned inventory, the Safe Harbor yields a result that artificially increases the taxable base.
This article focuses on the premise that tax efficiency in Mexico has ceased to be an economic problem and has become a challenge of legal and operational architecture: the correct route depends on each maquiladora’s functional and asset profile.
1. The Safe Harbor: Today’s De Jure Regime
Transfer-pricing compliance in the maquiladora industry seeks to determine market-level profits and, above all, to prevent the foreign resident from creating a Permanent Establishment (PE) in Mexico (Art. 181 LISR).
Translator’s note [PE]. The PE concept here is that of the Mexico–U.S. tax treaty and Mexican domestic law. It is distinct from the U.S. domestic notions of a “U.S. trade or business” and “effectively connected income,” which the IRS applies under a separate analytical framework.
The turning point was the decree published in the Official Gazette (Diario Oficial de la Federación, DOF) on October 26, 2021, effective January 1, 2022, which repealed the paragraph of Article 182 that had enabled maquiladora companies to comply through a unilateral APA. As of 2025, maquiladoras without a bilateral agreement have only the Safe Harbor available; asset-intensive companies feel its first full impact in 2025–2026.
The Safe Harbor formula: taxable profit is determined as the greater of:
6.9% of the total value of the assets used in the operation, including those owned by the foreign resident or related parties and those granted under comodato.
6.5% of operating costs and expenses (excluding the value of raw materials that the foreign resident acquires on its own account).
Translator’s note [Safe Harbor]. This maquiladora “Safe Harbor” is a specific statutory profit formula under Art. 182 LISR (Mexico). It should not be conflated with the general “safe harbor” provisions of U.S. tax law, which operate differently and are not formula-based.
Requirements to qualify as a maquiladora operation (Art. 181 LISR and the IMMEX Decree): a valid maquila contract; goods owned by the foreign resident and subject to a transformation process; that the entirety of income derive from the maquiladora activity, up to 10% may correspond to other items under the Miscellaneous Tax Resolution (Resolución Miscelánea Fiscal, RMF); and that at least 30% of the machinery and equipment be owned by the foreign resident, provided it was not previously owned by the maquiladora or by a related party in Mexico. Failure to meet these requirements may give rise to a PE for the parent company.
Operational obligations: filing the DIEMSE (Informative Return of Manufacturing, Maquiladora and Export Services Companies, generally in June) and maintaining inventory controls in accordance with Annexes 24 and 30.
The underlying problem, for companies with too many assets, the “asset effect”: by bringing machinery held under comodato and consigned inventory into the base, the 6.9% rate penalizes capital-intensive companies with a taxable base far exceeding their functional profile as a routine manufacturer.
2. The Two Routes to Mitigate the Safe Harbor
A. The BAPA: The Structural Solution
An agreement negotiated jointly by the taxpayer, the SAT, and the foreign competent authority, under a treaty for the avoidance of double taxation.
Legal basis: Article 34-A of the CFF, in connection with the Mutual Agreement Procedure article of the applicable treaty (Art. 25 of the OECD Model Tax Convention; e.g., the Mexico–U.S. treaty).
Its technical logic (QMA): the Qualified Maquiladora Approach is the methodology that Mexico and the U.S. have used for more than a decade for maquiladoras. It estimates the income attributable to the Mexican entity, distinguishing whether it is labor-intensive or capital-intensive, and, because it is discussed with the U.S. authority, its results are recognized as arm’s length under Section 482 of the Internal Revenue Code.
Advantage: it eliminates double taxation and allows a margin consistent with the real functional profile, avoiding the “asset effect.”
Considerations: it is subject to acceptance by the competent authorities, timelines are lengthy, and advisory costs are significant. Filed in a timely manner, it may cover several future fiscal years.
In practice, it is advisable to quantify the gap between the Safe Harbor and the result under the QMA: if it is material, the BAPA is the conversation to have.
B. Migration to the General Tax Regime
Relinquishing the maquiladora regime and being taxed as a contract manufacturer may reduce income tax (ISR), but it requires redesigning the legal architecture: upon leaving Article 181, the PE risk reappears, so the subsidiary must formally acquire or lease the assets and eliminate agency elements vis-à-vis the parent. It is also essential to model the high impact on VAT and certification (see Section 4) and on the USMCA (T-MEC) rules of origin.
Translator’s note [T-MEC / USMCA]. “T-MEC” is the Spanish designation for the same trilateral agreement known in the United States as “USMCA.” References are interchangeable, but rules-of-origin determinations may be analyzed under each country’s own implementing legislation.
The MAP: Another Reactive Tool
Unlike the foregoing, the Mutual Agreement Procedure (MAP) is triggered after an audit adjustment, on the basis of the mutual agreement article of the applicable treaty and Action 14 of the OECD BEPS Plan. Globally, the OECD reports that approximately 73%–75% of concluded cases fully resolve the controversy, with an average of 29 to 32 months for transfer-pricing cases. A qualification is in order: although the assessment continues to accrue ancillary charges while it is being negotiated, the CFF allows late-payment surcharges (recargos) to be reduced or waived, where so agreed in the MAP, as part of the resolution.
Translator’s note [recargos / actualización]. Mexican recargos (late-payment surcharges) and actualización (inflationary restatement of the tax debt) are statutory ancillary charges under the CFF. They are computed differently from U.S. interest and penalties and do not map one-to-one onto IRS concepts.
3. Do You Have an APA Filed and Still Unresolved? It Is the Immediate Priority.
The fact that new maquiladora APAs can no longer be applied for does not mean the matter is concluded. There is a backlog of APA applications filed through 2021 (and even in 2019 and 2020) that remain pending resolution before the SAT; many cover fiscal years 2018 to 2024, and the authority itself updated, in both 2020 and 2024, the income-estimation methodology (QMA) applicable to those files.
The point to grasp is not that the APA lacks value, it is an instrument that confers certainty, but rather that while the file remains open, maquiladora companies lack legal certainty: should a review arise, an adjustment for the years involved becomes far more onerous due to the inflationary restatement (actualización), late-payment surcharges (recargos), and other ancillary charges that accumulate over time. Securing the resolution locks in the negotiated margin, confirms the PE exemption, and closes that exposure.
Benefits of finalizing the resolution of the pending APA:
Certainty for the covered years, with effects on the year of the application and those that correspond.
Confirmation of the PE exemption for the parent during the term of the agreement.
A negotiated margin instead of the Safe Harbor, which for an asset-intensive company can mean a taxable base substantially lower than 6.9%.
Lower risk of a costly adjustment, by closing the window in which ancillary charges and surcharges accrue.
Release of provisions for uncertain tax positions (FIN 48 / ASC 740).
An orderly transition to the optimal structure for the years not covered.
How we approach this at Quantum Pricing. We support companies with pending APA applications in advancing and finalizing their resolution before the SAT: we review the consistency of the file and the economic study, align it with the prevailing QMA methodology, manage the technical dialogue with the authority, and design the transition to the optimal structure (BAPA, Safe Harbor, or restructuring) for the years not covered. If your group has an unresolved APA, its status should be reviewed as soon as possible, as the authority has been quite active in reviewing these cases.
4. Worked Example: “MexiTech Components, S. de R.L. de C.V.”²
An IMMEX maquiladora, technology-intensive, with high-value parent-owned machinery and inventory.
Amount | Item (USD)
$10,000,000 Local operating costs and expenses
$2,000,000 Subsidiary's own fixed assets
$15,000,000 Foreign-resident assets under comodato¹
$10,000,000 Consigned inventory (owned by the parent)
$27,000,000 Total assets in operation
Scenario A, Safe Harbor. Tax is levied on the greater of 6.9% on assets (6.9% × $27M = $1,863,000) and 6.5% on costs (6.5% × $10M = $650,000). Taxable base: $1,863,000; income tax (ISR) at 30% (Art. 9 LISR) = $558,900. Implied margin on costs: 18.63%.
Scenario B, BAPA. With an illustrative mark-up of 7.5% on costs: profit $750,000; ISR = $225,000. Saving versus the Safe Harbor: $333,900 per year. PE exempt by treaty.
Scenario C, General regime. With an illustrative margin of 8.0% on costs: profit $800,000; ISR = $240,000. However, the company assumes inventory risk and, if it loses its certification, must finance the VAT at customs.
Metric
A: Safe Harbor
Taxable base: $1,863,000
Income tax — ISR (30%): $558,900
PE Protection: Yes (automatic)
Implementation: Minimal
B: BAPA
Taxable base: $750,000
Income tax — ISR (30%): $225,000
PE Protection: Yes (by treaty)
Implementation: Medium (months)
C: General regime
Taxable base: $800,000
Income tax — ISR (30%): $240,000
PE Protection: No (requires restructuring)
Implementation: High (legal redesign)
Note. The 7.5% and 8.0% margins are assumptions of this example. In practice, they are determined through the QMA / bilateral analysis (B) or a comparables study under Arts. 179 and 180 LISR (C).
The VAT factor. Temporary imports under IMMEX trigger VAT at 16%, unless the company holds the VAT and IEPS certification (IEPS being the Special Tax on Production and Services), which allows a 100% credit and deferral of payment. Losing that certification upon restructuring can turn an ISR saving into severe cash-flow pressure.
5. The 2026 Context: Agreement 68/2026 and Nearshoring
In early May 2026, the Mexican Ministry of Finance (SHCP) published Agreement 68/2026 in the DOF. It is important to be precise about its nature: these are non-binding guiding criteria; the instrument is not a reform and does not limit the SAT’s enforcement powers, but it sets institutional expectations that can be invoked during an audit. Among its relevant points for manufacturing: observance of treaties (which favors access to MAPs), a single audit per fiscal year with selective sampling, non-retroactivity, cancellation of Digital Seal Certificates (CSD) as a measure of last resort, faster VAT refunds, and tax proportionality (Art. 31, section IV, of the Constitution).
All of this occurs as Mexico seeks to position itself as a destination for investment in advanced manufacturing and semiconductors within the framework of nearshoring and the USMCA (T-MEC). In that environment, fiscal predictability is a competitive asset, but Agreement 68/2026 is a policy signal, not firm legal protection.
6. Conclusions
The Safe Harbor is the point of departure, not the end. For asset-intensive groups, the 6.9% on total assets destroys margins; an alternative structure is worth assessing.
If you have an unresolved APA, pursue its conclusion as soon as possible. It is the most direct way to lock in a negotiated margin and prevent a potential adjustment from becoming more expensive through inflationary restatement and surcharges.
The BAPA is the structural solution, subject to acceptance by the authorities; the first step is to quantify the Safe Harbor vs. QMA gap.
Migration to the general regime is viable, not universal: it works only with a complete legal redesign and by modeling the impact on VAT and the USMCA.
In short: the question is no longer “how much tax do I pay?” but “what legal and operational architecture allows me to pay what is fair according to my functional profile, without PE risk or double taxation?” At Quantum Pricing we help answer it, beginning, where applicable, by clearing your pending APA.
We model 'what-if' scenarios for intercompany pricing and compare their effective tax rate under the Safe Harbor against the QMA outcome. If the gap is material, we negotiate a bilateral BAPA to eliminate double taxation. This is ideal for capital-intensive manufacturing: aerospace, Tier 1 automotive, electronics, medical devices, and biopharmaceuticals.
Legal Basis and Sources
LISR: Arts. 9 (30% rate), 179–180 (transfer-pricing methodology), 181 (maquiladoras and PE exemption), and 182 (Safe Harbor).
CFF: Art. 34-A (private rulings / APA) and provisions on ancillary charges and surcharges.
IMMEX Decree and Miscellaneous Tax Resolution (RMF): requirements of the maquiladora operation (including the 30% machinery threshold and the 10% other-income allowance).
2022 Reform: DOF decree of October 26, 2021 (effective January 1, 2022).
OECD: Model Tax Convention (Art. 25, Mutual Agreement Procedure); Transfer Pricing Guidelines (2022 edition, in force 2025–2026); BEPS Action 14 MAP Statistics.
Mexico–U.S. Framework: maquiladora agreements (1999, 2016, and the renewed framework in 2023) and the QMA methodology; Section 482 of the Internal Revenue Code.
SHCP: Agreement 68/2026 (DOF, May 2026), of a guiding and non-binding nature.
Translator’s Notes
¹ Comodato: a Mexican civil-law gratuitous bailment (loan for use) under which the lender retains title throughout the term. There is no exact U.S. common-law equivalent; the asset’s treatment for U.S. transfer-pricing purposes — particularly regarding who bears economic ownership for Section 482 purposes — may differ from its treatment under Mexican tax law.
² "S. de R.L. de C.V." (sociedad de responsabilidad limitada de capital variable) corresponds to a Mexican variable-capital limited liability company. It is functionally analogous to a U.S. LLC but governed by Mexican corporate law.
Informational document for professional dissemination. It does not constitute tax, legal, or accounting advice for a specific case.
Methodological note. This document is based on the LISR, the CFF, the IMMEX Decree, the OECD Model Tax Convention, and the OECD Transfer Pricing Guidelines (2022 edition, in force for 2025–2026). The figures in the worked example are illustrative and do not constitute market comparables or advice for a specific case.