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A closer look at TP compliance for businesses in Latin America
Scholarly Journal
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There are transfer pricing (TP) documentation obligations adopted by Latin American countries that need to be complied with under Action 13 of the OECD’s BEPS Action Plan. This article provides an overview of TP developments in Latin America focussing on countries with TP documentation requirements as set out in Action 13, and countries without TP documentation requirements. Countries with TP documentation requirements under Action 13 Argentina TP regulations in Argentina are regulated by the Income Tax Law, whose scope of application is limited to transactions carried out with related parties abroad and/or parties resident in non-cooperating jurisdictions. Argentina’s tax authority, the Federal Administration of Public Revenues (AFIP), introduced new requirements including a TP study through Form 4501 informative declaration, and Form 2668. The TP study and Form 2668 must be filed by the sixth month after closing. Also, in the last year, the AFIP has incorporated the submission of a master file and country-by-country report, the latter through Form 8097, for fiscal years ending December 31 2018, which should be filed by the 12th month after the end of the relevant year. Brazil The TP regime in Brazil is unique in South America, due to its simplicity and the fact that it does not follow the OECD guidelines. Nevertheless, in 2016, Brazil introduced the third level of documentation of Action 13 – the country-by-country report to be submitted to the Federal Brazilian Tax Authorities ( Receita Federal do Brasil , RFB). As part of the convergence between the RFB’s TP guidelines and those of the OECD, in late 2020, the OECD issued a report presenting the shortcomings and strengths of the Brazilian system to align with the guidelines. Chile The Chilean TP legislation is regulated by Article 41-E of the Income Tax Law (LSIR), which indicates that operations carried out with...