Abstract
This essay presents a practical application of the current regulations on transfer pricing included in Mexico’s the Income Tax Law. A case is presented where a Mexican company sells equity of two subsidiaries to a related company. After presenting the criteria for selecting comparable companies, the valuation exercise is carried out using the market approach. Subsequently, the results are framed within an interquartile range as required by Mexican Income Tax Law. Two opposite results are presented: the first where the sale price meets the “arm’s length” standard and the second where the sell price is outside the range of prices that would have been agreed upon by independent parties in a similar transaction and in a similar situation. As a result, the corresponding transfer pricing adjustment is made.