The final agreement was established in Mexico taking into account the number of audits issued by the SAT and the possible evaluations that could result. This is a dispute resolution process based on the mode of mediation that takes place between taxpayers, the SAT and the Prodecon. 1. Term. A final agreement takes about four to nine months, compared to two to four years for a final decision in an appeal for annulment. Pre-price agreements (APAs) are defined in Mexican law and are a useful mechanism for avoiding or mitigating transfer pricing controversies, as taxpayers and public authorities reach consensus on the methodology implemented by the former in controlled transactions. If there is no agreement between the parties or if the above threshold is exceeded, the formal procedure will proceed in accordance with the rules of the National Code of Criminal Procedure, which is an oral procedure in which the prosecutor and the accused present their legal arguments and present the necessary evidence to support their positions. In general, cross-border transfer pricing situations result in more litigation. In order to mitigate these disputes, many taxpayers have chosen to adopt a conclusive agreement procedure prior to Prodecon, as described in six alternative dispute resolution mechanisms (ADRs) in order to reach an agreement with the authorities. Through the final agreement procedure, taxpayers are better placed for tax control. Prodecon`s support guarantees the protection of taxpayers` rights and prevents the arbitrariness of the service, particularly with regard to the application of the substance through form rules.
6th collection. The final agreement procedure also contributes to the increase in tax revenues, as collection is done in less time and the human and material resources used by the service to obtain such collection are better managed. At the end of the process, authorities and taxpayers can reach agreement on any or only a few of the contentious issues. The rest may be substantial for assessment and legal proceedings. If an agreement is reached, both parties must sign a written document outlining the terms of the agreement and the obligations they apply. If the agreement is only partial, the authorities can conduct an assessment of the issues on which there has been no consensus between the parties. These issues can be challenged by the due process described in 3 Administrative Litigation and 4 Judicial Litigation. Prodecon began operations on September 1, 2011 and offered taxpayers an alternative mechanism for resolving tax disputes with the MX service, which acted as an intermediary and guaranteed the rights of taxpayers.