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2021 – 2 Tax Consulting


Effective Income Tax Rates for Large Taxpayers – SAT


Over the weekend, the Tax Administration Service (SAT) published on its website (sat.gob.mx) an analysis of the reference parameters of the effective income tax rates for the measurement of tax risks corresponding to 40 different activities within 5 economic sectors, based on the registry of large taxpayers. Said rates may be consulted in the supporting documents attached hereto. 

The 5 sectors analyzed were (i) mining, (ii) manufacturing industries, (iii and iv) wholesale trade; retail trade (aimed to the automotive and pharmaceutical industries) and (v) financial and insurance services. As an example, the parameters include the rates to be obtained in banking, insurance, surety bonds, sofomes (for its acronym in Spanish), gold and silver mining, automotive manufacturing, among others.

As indicated by the Tax Authority, the information was published for taxpayers to know the results of internal analysis processes that the SAT performs to the large taxpayers registry, for the fiscal years 2016 to 2019, in terms of the powers granted to the Tax Authority as of this year, in order to facilitate compliance with tax obligations and that each taxpayer can measure their rates against those of the industry to measure their tax risks, assessing, if necessary, the need to correct their tax situation to minimize the possibility the initiation of "deep" audits.

Likewise, it is reported that the SAT is currently conducting the analysis regarding the effective tax rates of other economic activities, which will eventually be disclosed through a subsequent publication in their website.

The methodology used by the Tax Authority is based on taxing parameters, since the effective rates disclosed are calculated by dividing the amount of income tax payable by the fiscal year, divided by the cumulative income of this year.

Notwithstanding that this publication does not only refer to transfer pricing issues according to the frequently asked questions section of the SAT’s website regarding this topic and the press statement itself, it’s also important to mention that the profit indicators according to the Income Tax Law in the application of the different transfer pricing methods are calculated based on accounting parameters, in accordance with the applicable Financial Information Standards. Derived from this disparity in the methodologies applied, we suggest that a review be carried out based on the effective rate parameters used by the Tax Authority, which will allow companies to know their situation and begin to outline the corresponding action plan.


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Mexico City

   June 2021


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