Executive answer
Preparation for a transfer pricing audit begins before an official letter arrives. A company should reconcile transactions, reports, filings, agreements, CFDI invoices, accounting, payments and conduct. Upon notice, first identify the act, authority, period, taxes, scope, channel, date and deadline; then establish one controlled response.
Speed does not mean sending everything without review. Every document may expand questions or expose contradictions. The team preserves evidence, builds a timeline, assigns ownership, validates amounts and adopts a supported narrative. Defense does not hide differences; it identifies, explains and remediates them where appropriate under applicable law.
Research and verification cutoff: August 2, 2026. Confirm the notified act directly and obtain advice on the specific rights, deadlines and strategy.
Identify the notified act
Read the heading, legal basis, authority, addressee, period, taxes, operations, requested information, delivery form and signature. Confirm notification date and method. Do not assume every request follows the same procedure or deadline.
Legal prepares an act summary and tax validates technical scope. Resolve ambiguity before responding. Preserve the full act and acknowledgement.
Activate the response team
Appoint a project lead, legal owner, technical owner and data custodians. Add accounting, treasury, operations, systems and business by transaction. Define final approval authority.
A RACI prevents parallel responses. No one sends information outside the channel. External advisers receive scope, confidentiality and version controls.
Preserve documents and data
Issue a preservation instruction covering relevant email, agreements, models, reports, databases, tickets and devices. Suspend ordinary deletion where appropriate. Retain originals and work on controlled copies.
Record origin, date, custodian and transformation. An export without lineage may be irreproducible. Do not modify historical documents to create consistency.
Build the timeline
Order transaction start, agreements, invoices, adjustments, filings, changes, internal reviews and notice. Link evidence and owner to each event. The timeline exposes later or retroactive documents.
It also shows what information existed when a decision was made—essential for forecasts, restructurings, intangibles and extraordinary events.
Transaction inventory
Rebuild the population from ledger, CFDI invoices, payments, filings and counterparties. Classify goods, services, royalties, interest, guarantees, adjustments and extraordinary transactions. Compare with the report.
Investigate omissions before delivery. Preserve accounting, tax, contractual and reported amounts and explain differences.
Amount reconciliation
Bridge the transfer pricing report with accounting, annual return, DIM, Local File, ISSIF, SIPRED and other applicable reporting. Bases and dates may differ. Explain classifications, exchange rates, true-ups and adjustments.
Every delivered number needs a source and formula. Pasted cells and unreproducible files invite questions. An independent reviewer recalculates samples.
Agreements versus conduct
Compare written rights with actual decisions over pricing, risk, functions, termination, ownership, adjustment and payment. Use interviews, systems, email and minutes.
Do not conceal a contradiction. Determine materiality and effect on delineation, method or evidence. A retroactive agreement does not correct earlier facts.
Report and method
Confirm that the report matches period, entity, transaction and data. Review FAR, method, tested party, indicator, comparables, range and conclusion. Reproduce searches and calculations.
A result within range is not enough where delineation is wrong. Identify limitations and later updates.
Transaction materiality
For services, reconstruct request, provider, activity, deliverable, recipient, benefit, booking and payment. Agreement and invoice are part of the evidence, not the whole proof. Address duplicates and shareholder activity as relevant.
For goods, connect orders, logistics, receipt, inventory and sale. For financing, connect approval, funds, use, capacity and debt service.
Technical narrative
The narrative explains what occurred, who did what, why terms were set, how price was determined and what evidence exists. It must align with amounts and documents. Replace adjectives with facts.
Prepare a question-response-source-risk matrix. Link every material assertion to an exhibit. Legal and technical reviewers work together.
Request a TP Audit Readiness to test the amounts, narrative and evidence before the first SAT response.
Risk matrix
Rank findings by amount, probability, evidence, period and consequence. Distinguish data, documentation, method, execution and substance. They call for different responses.
The matrix guides review and strategy under access controls. Each risk has an owner, action and date.
Exhibit selection
Deliver what is requested in the appropriate format with an index. Check completeness, readability, period, language and metadata. Avoid unrelated materials that blur scope.
Selection does not mean withholding required information. Legal confirms sufficiency and any explanation. Preserve an exact delivery copy.
Version control
Use naming, repository, permissions and a change log. Files pass preparation, technical review, legal review and approval. Only final versions are delivered.
Record hashes or attributes where useful. Link acknowledgements to packages. Personal email is not the master archive.
Internal interviews
Interview people who performed the work. Ask for concrete decisions and documents rather than ideal answers. Prepare participants for precision without scripting artificial responses.
Investigate inconsistency. Memory may fail; contemporaneous evidence is stronger. Retain notes under the applicable legal protocol.
Translations
Where foreign-language documents are delivered, consider translation and consistency. Keep original and translated version, author, date and scope. Technical and contractual terms need review.
A translation should not change meaning or add conclusions. Maintain a glossary for recurring entities and terms.
Additional requests
Add every request to the timeline and matrix. Compare with earlier delivery to prevent contradiction. Update risks and owners.
Do not reuse a response without checking period and question. Refer to prior submissions where appropriate and retain acknowledgements.
Meetings with the authority
Define purpose, attendees, spokesperson, confirmed facts and items requiring review. Prepare internal notes and authorized documents. Avoid speculation.
Afterward record questions, commitments and deadlines. Later responses remain under formal control.
Correction and alternatives
Where an error appears, assess legal, tax and accounting options with advice. Quantify tax, inflation adjustment, penalties, double taxation and indirect effects. Do not correct one number without related filings.
Approve and document the decision. Correction does not replace root-cause explanation and control improvement.
International coordination
A cross-border review can create double taxation. Inform the global team, preserve counterparty positions and assess treaties, MAP or corresponding adjustment. Two jurisdictions should not receive incompatible stories.
Coordination respects privilege, confidentiality and deadlines. One global owner maintains the procedure matrix.
CFO and board communication
Report scope, exposure, milestones, decisions and scenarios. Separate known amounts from estimates. Prevent cash and financial-statement surprises.
The board approves material decisions rather than every exhibit. Minutes demonstrate governance without unnecessary speculation.
Continuing controls
An audit should not stop current compliance. Continue monitoring, documentation and adjustments for the new year. Improve processes prospectively without changing historical evidence.
A post-review identifies data, agreement, system, ownership and policy causes. Every action needs closure evidence.
Audit master file
Include act, acknowledgement, timeline, RACI, inventory, reconciliations, report, agreements, evidence, risks, responses, exhibits, meetings and decisions. An index reconstructs the procedure.
Separate originals, workpapers and deliveries. Maintain security and retention under law and policy.
First 72 hours
Without assuming one legal deadline, use the first hours to validate notice, preserve information, assign the team, calendar milestones, identify the population and gather critical documents. Do not conclude before knowing the facts.
The lead issues an initial scope, gaps and next-steps report. It establishes control without rushing submission.
Reverse response calendar
Start from the deadline applicable to the act and reserve time for approval, upload, contingency and acknowledgement. Work backward through legal and technical review, translation, reconciliation, extraction and interviews. Every task has an owner, dependency and date. The calendar distinguishes the official deadline from earlier internal gates.
Review it daily at the outset. Escalate a material gap while alternatives remain rather than the day before submission. Where an extension or clarification is considered, legal evaluates timing and effect from the act; the plan does not assume approval.
Data room and evidence register
Organize folders by request, subject and version, with role-based permissions. The register includes identifier, description, period, source, custodian, confidentiality, translation, review and delivery status. Originals remain read only.
When a dataset changes, preserve the query, filters and reconciliation. A screenshot may illustrate but does not replace source data. SAT receives the required format; the team also retains lineage needed to defend it.
Sampling and extrapolation
Where a request or analysis uses samples, define population, criterion, size, exceptions and monetary coverage. Do not select only transactions with complete files. Sampling should explain the process and reveal weaknesses.
Do not extrapolate without testing representativeness. One service lacking a deliverable may be isolated or systemic. Quantify the affected universe and design proportionate remediation.
Confidentiality and internal circulation
Classify personal, commercial, technical and legal information. Limit access and use approved channels. Legal determines treatment of adviser communications under applicable law; protection is not assumed automatically.
Executive reports omit unnecessary detail but preserve decisions. Providers return or retain information under contract. File security is part of integrity.
Exposure scenarios
Prepare a favorable technical case, expected case and downside with explicit assumptions. Include principal tax, inflation adjustments, potential penalties, accounting, cash and double taxation without presenting an estimate as a certain assessment.
Each scenario links to a decision: defend, supplement, correct, seek relief or reserve. Update only for new evidence and log the change so the CFO can manage risk without overriding technical conclusions.
Quality gate before delivery
A reviewer not involved in drafting should confirm that every requested item is answered, every exhibit is cited, totals reconcile and terminology is consistent. The gate checks dates, signatures, file readability and removal of uncontrolled comments or hidden worksheets. It also verifies that the response does not make assertions broader than the evidence.
The approval record lists remaining limitations and who accepted them. Where information is unavailable, explain the reason and steps taken rather than silently substituting another period. This final challenge is often the difference between a coherent package and a collection of individually accurate but mutually inconsistent documents.
Illustrative example
SAT requests service, royalty and adjustment information. The company activates its RACI, reconciles the report with the ledger, reconstructs deliverables, detects a reclassification and prepares a bridge. The response explains method and difference, attaches selected evidence and retains the package. It also corrects the current-year transaction catalog.
Warning signs
Warnings include multiple spokespeople, differing amounts, retroactive agreements, irreproducible reports, unindexed exhibits, services without evidence, modified files, personal email, missing acknowledgements and responses without legal review. Ordinary destruction after learning of the review is another.
These do not determine the merits but increase procedural and technical exposure.
Conclusion
An audit is a legal, technical and data project. The first response should be complete as requested, coherent and reproducible.
Preparation reveals contradictions in a controlled setting and turns review into evidence-based decisions rather than pressured reconstruction.
Request a TP Audit Readiness to organize the response, validate the file and reduce inconsistencies before submission.
Verified official sources
- Mexican Chamber of Deputies, current Federal Tax Code, powers, procedures and rights applicable to the notified act.
- Mexican Chamber of Deputies, current Income Tax Law, Articles 76, 76-A, 179 and 180 as relevant.
- OECD, Transfer Pricing Guidelines 2022.
Verification closed on August 2, 2026. The notified act is the primary source for its specific scope, form and deadline.