Executive answer
A year-end adjustment changes the price, consideration or margin of a related-party dealing to bring its result to arm’s length conditions. In Mexico, section 3.9.1 of the 2026 Miscellaneous Tax Resolution defines adjustments and governs effects and requirements. The decision is not merely a difference-to-median calculation: method, population, segment, cause, classification, deadline and both parties’ effects must be validated.
The best time to decide is before accounting closes and the annual return is filed. Agreement, invoice or other document, exchange rate, withholding, VAT, customs, counterparty and filings can then be coordinated. Finding the deviation later may limit routes or require amended returns, notices and stronger evidence.
An out-of-range result is a signal, not the cause. It may reflect accounting error, product mix, extraordinary expense, volume, currency, actual risk, an outdated method or an incorrect controlled price. The Year-End Adjustment Lab separates diagnosis, tax calculation and execution so the company does not correct a number through the wrong treatment.
Current framework
Rule 3.9.1.1 treats as a transfer pricing adjustment any change to prices, consideration or margins in related-party dealings made so that taxable income or deductions are determined as between independents, even without a transfer of cash or other resources. The adjustment retains the concept or nature of the underlying dealing.
The following rules address increases or decreases to income and deductions, requirements for deducting adjustments, and later adjustments resulting from Article 34-A rulings. Review the current Resolution and annexes at execution.
Article 180 of the Income Tax Law governs the range: an inside-range result is considered independent; for an outside result, the statute refers to the median. This does not authorize additional inside-range adjustments to obtain a benefit or replace deduction requirements.
Five questions before adjusting
Are transaction and population correct?
Reconcile trial balance, invoices, agreements, counterparty, period and segment. Include accruals, cancellations, credit notes, settlements, currency and unbilled dealings. A population error is not cured by a markup.
Are the method and range still reliable?
Review FAR, tested party, indicator, comparables, period, adjustments and statistics. Do not use an earlier benchmark after functions or market change.
What caused the deviation?
Separate price, volume, mix, cost, currency, unusual items and decisions. Determine which party controlled the risk. Cause informs who should bear the effect.
What adjustment type is involved?
Determine real or virtual and the variant—voluntary or compensating, primary, domestic or foreign corresponding—under the rules and facts. Classification drives support, counterpart entry and process.
Can it be executed on time and with requirements?
Review annual return, ISSIF, statutory audit, related-party filings, notices and documentation. Do not assume a late deduction receives the same treatment.
Decision tree
- Was the result calculated from final segmented data?
- Was it reconciled to accounts and filings?
- Is the method appropriate and the range current?
- Is the result actually outside the applicable range?
- Does the cause relate to controlled pricing rather than another error?
- Does the agreement permit a true-up and describe its mechanism?
- Does the adjustment change consideration and accounting?
- Will the counterparty recognize a corresponding effect?
- Are withholding, VAT, excise tax or customs involved?
- Will deadlines, filings and support be satisfied?
A negative answer may require correcting data, refreshing the analysis or obtaining legal review before invoicing.
Static model
| Input | Amount/status | Control |
|---|---|---|
| Indicator and denominator | Same definition as comparables | |
| Current result | Reconciled | |
| Q1, median, Q3 | Approved sample | |
| Applicable point | Legal basis | |
| Economic difference | Reproducible formula | |
| Adjustment type | Real/virtual and variant | |
| Counterparty/currency | Corresponding effect | |
| Income tax/withholding | Requirement and deadline | |
| VAT/excise/customs | Separate analysis | |
| Document and entry | Original nature | |
| Returns | Fields and versions | |
| Approval | CFO/tax/accounting |
A future tool can model scenarios, but should not calculate before method, segment and rule are confirmed.
When the forecast approaches a boundary, model the full effect before issuing a last-minute invoice or journal entry.
Calculating from the indicator
For ROS, apply the target point to segmented sales and compare with current operating profit. For markup, apply it to a cleaned base. For return on assets, validate average operating assets. Under CUP, calculate units by price or rate.
Maintain precision and round only at the end. Separate accounting reclassifications correcting data from the economic adjustment. A reclassification may bring the result inside without changing consideration.
After the adjustment, recalculate the indicator. The booked amount should produce the approved conclusion. Record tax and currency effects separately.
Cause diagnostic
Build a budget-to-actual bridge by driver. A distributor may deviate because of local discount, supplier price, inventory, warranty or FX. A manufacturer because of volume, scrap, idle capacity or material. A service provider because of staffing, scope, pass-through or allocation.
Link cause to risk and control. If Mexico chose a promotion, shifting the whole loss to the principal may conflict with FAR. If the principal reduced protected volume, it may owe capacity compensation. The true-up follows FAR, not only the target.
Retain corrective actions: list, frequency, data or agreement changes. Repeating an adjustment without process remediation increases risk.
Real and virtual adjustments
The annual rules distinguish adjustments having both tax and accounting effects—real—from those with tax effects only—virtual. They are not interchangeable. A real adjustment may require a document, entry, settlement or balance and counterparty effect. A virtual adjustment changes tax computation without altering consideration.
Classification should reflect events. Do not use virtual treatment merely to avoid documents where parties changed price. Do not invoice where only a tax difference is recognized without contractual basis. PT-027 addresses classification in detail.
Counterparty coordination
Confirm amount, currency, date, nature, document, account and period. The counterparty should know whether income, expense, asset or liability changes. Consider exchange-rate differences between books.
For cross-border dealings, review treaty, withholding, double taxation and procedures. A Mexican adjustment does not automatically produce foreign relief. For domestic dealings, confirm corrections and both parties’ returns.
Obtain bilateral approval before closing. A unilateral note creates differences that are difficult to resolve.
Invoice, accounting and agreement
The adjustment retains the nature of the underlying dealing. Support should link the original invoice, agreement, period and calculation. Determine the applicable Mexican electronic invoice, note, foreign document and entry.
The entry should identify counterparty, account, tax, currency and reference. Avoid a generic “TP adjustment” expense without a bridge. Preserve pre- and post-adjustment versions.
If the agreement has no true-up, consider whether a prospective amendment or additional record is needed. Do not backdate.
Multi-tax effects
Income tax is only one layer. An adjustment to imported goods may affect customs value; services and royalties may create VAT and withholding; specific goods may involve excise tax. Direction does not automatically create the same effect across taxes.
Prepare a matrix by tax, period and return. PT-029 develops the bridge. No team should issue a document before the relevant functions complete their conclusions.
Filings and deadlines
Connect the adjustment with the annual return, related-party information, Annex 9 where applicable, Local File, ISSIF and SIPRED. Use the current form and retain workpapers by field.
Rule 3.9.1.3 contains deadlines and requirements for adjustments increasing deductions. Later cases and Article 34-A outcomes are addressed in 3.9.1.4 and applicable forms. Verify the year; do not reuse old instructions.
An amended return does not replace evidence requirements or make an adjustment deductible.
Preventive monitoring
Calculate actual and forecast indicators monthly or quarterly. Show distance to the band, drivers, owner and action. Set alerts before closing.
Use budget as an operating tool, not the final benchmark. Refresh comparables when available and preserve differences. Explain forecast changes.
The committee reviews volume, price, cost, currency, extraordinary items and agreement. Early decisions allow prospective invoice correction instead of a large year-end true-up.
Common errors
- Waiting for the annual return.
- Adjusting without segment reconciliation.
- Using an outdated benchmark.
- Moving to median without cause analysis.
- Confusing reclassification and adjustment.
- Selecting real or virtual for convenience.
- Ignoring the counterparty.
- Omitting VAT, withholding or customs.
- Failing to reflect in filings.
- Repeating annually without remediation.
Governance and approval
Tax coordinates method and rule; controllership validates data; accounting executes; legal reviews the agreement; treasury settles; customs and indirect-tax teams assess effects; CFO approves. Use a RACI and cut-off date.
The final file contains inventory, FAR, benchmark, calculation, diagnosis, classification, effects, documents, filings, approval and follow-up control.
Go/no-go package
Before execution, give the CFO a one-page summary of current result, range, cause, amount, classification, counterparty, tax effects, documents, deadline and open risks. Recommend execute, correct first or do not adjust, with owner and date.
A “go” requires a closed calculation and route. A conditional go should name the item preventing issuance, such as customs approval or counterparty evidence. A no-go explains whether reclassification, methodological refresh or missing support makes the true-up inappropriate.
After approval, lock data and formula. Any material change reopens the decision. This control prevents the final invoice from differing from the amount and treatment that leadership authorized.
Related topics
- PT-020: range and median.
- PT-027 through PT-030: classification, execution, taxes and notices.
- PT-088: corresponding adjustment and double taxation.
Adjustment decision committee
Before the annual return, present current result, range, forecast, causes, adjustment amount and alternatives. Separate operating deviation, accounting error and functional change. Show income tax, VAT, withholding, customs, invoicing, currency, counterparty and financial-statement effects. The decision cannot rest solely on reaching the median.
Tax validates rules; accounting the entry; treasury the payment; legal the agreement; operations the cause; and the counterparty the possibility of corresponding relief. Define date, document, approval and updates to studies and returns. If no adjustment is made, archive the rationale and supporting evidence.
After execution, reconcile the calculation, invoice or support, entry, payment and receipt. Compare actual effect with the simulation and log differences. This file turns a true-up into a coordinated decision and prevents fixing income tax while creating inconsistencies elsewhere.
Sources and verification date
The committee reviews the transaction again at the next close to confirm that the adjustment was not reversed, duplicated or left unmatched by the counterparty. Every difference opens an owned action. This follow-up confirms that the approved decision became consistent entries and returns rather than remaining a memorandum.
- Mexican Income Tax Law, current text, Articles 76, 179 and 180.
- 2026 Miscellaneous Tax Resolution, section 3.9.1, subject to amendments.
- Annex 2 to the 2026 Resolution, applicable forms.
- SAT Annex 9 guidance.
Sources checked on August 2, 2026. Deadlines, deduction and support depend on fiscal year, adjustment and taxpayer. This article is not an opinion for a particular case.
Request a Year-End Adjustment Lab to diagnose, calculate, classify and execute the true-up before closing filings.