According to recent reports, the Mexican tax authority (SAT) has been increasingly initiating audits in relation to the application of the thin capitalization rules and financing for electricity infrastructure projects. Mexico has long provided an exception from the thin cap rules for interest on financing for infrastructure projects in strategic areas, including electricity production projects. The exception from the thin cap rules was unintentionally removed for electricity projects with a revision of the types of areas considered strategic in 2013, but the exception was reintroduced as part of tax reform measures for 2016, with retroactive effect. As part of the...