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Cross-border Tax Talks
April 29, 2026
Mexico tax update: Nearshoring, audits, and treaty twists
Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Adriana Rodriguez, a PwC international tax partner based in Mexico City, for a discussion recorded at PwC’s International Tax Conference. Doug and Adriana discuss the core features of Mexico’s corporate tax system, including corporate income tax, withholding taxes, VAT, inflation adjustments, CFC rules, capital gains planning, and the impact of the multilateral instrument on treaty access. They also explore whether Mexico is likely to adopt Pillar Two, how Mexican multinationals are preparing for Pillar Two compliance, the role of incentives in inbound investment, the continued relevance of the maquila regime, rising audit and transfer pricing pressure, expanding tax authority digitization, and practical lessons for multinationals investing in Mexico.
- 01:15 - Introduction: baseball, backup careers, and architecture as a tax analogy.
- 02:40 Mexican corporate tax fundamentals: 30% federal rate and key WTH taxes.
- 03:30 - Treaty access after the MLI: principal purpose test, interest WTH rates and treaty reductions.
- 04:20 - Debt funding: interest, inflation, and FX.
- 05:30 - Mexico’s CFC rules and the passive-income, low-tax threshold.
- 06:25 - Foreign tax credits for dividends from higher-tax foreign subsidiaries.
- 7:00 - VAT basics: 16% rate, cash basis, import friction, and refund timing.
- 08:15 - Nonresident capital gains tax and why entry structuring matters early.
- 09:30 - Treaty relief that can reduce or exempt capital gains tax.
- 10:15 - Whether Mexico is likely to adopt Pillar Two.
- 11:50 - Pillar Two readiness for Mexican multinationals already exposed to top-up tax.
- 13:30 – Incentives and the investment-versus-collection balance.
- 15:20 - US inbound trends: better day-one design and nearshoring.
- 17:45 - Trade and tariff uncertainty and the current wait-and-see mood.
- 19:55 - Maquila regime benefits: stability, APAs, and VAT.
- 23:50 - SAT’s 2026 audit plans and heavier scrutiny of multinationals and customs..
- 26:50 - Transfer pricing enforcement, information matching, and negotiation dynamics.
- 28:35 - Digital enforcement and real-time SAT access to operating data.
- 32:00 - Practical advice: get the structure and documentation right from day one.
- 34:05 - What to watch next in Mexico international tax.
Speakers
International Tax Services Global Leader, PwC US
Adriana Rodríguez
Socia líder de impuestos internacionales y precios de transferencia, México, PwC México
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