Bloomberg Tax
Free Newsletter Sign Up
Login
BROWSE
Bloomberg Tax
Welcome
Login
Advanced Search Go
Free Newsletter Sign Up

U.S., Mexico Eye Tax Treatment of Virus Costs for Maquiladoras

March 18, 2021, 6:30 PM

The IRS and Mexico’s tax authority are discussing how pandemic-era costs should be attributed to manufacturing companies known as maquiladoras, a U.S. tax official said.

The pandemic has raised concerns about whether and how companies experiencing economic fall-out from the pandemic should pass some of that hit on to their entities that perform “low-risk” functions like manufacturing or distribution, which may typically earn a fixed fee or return.

Tax authorities are grappling with how to answer the question in the case of maquiladoras, John Hughes, director of the IRS’s Advance Pricing and Mutual Agreement Program, said Thursday during a virtual ...