New Limits to File a Comprehensive Transfer Pricing Report

September 20, 2023

The Internal Revenue Service (IRS) reported on September 14, 2023, the issuance of four resolutions to improve the formalization processes of taxpayers and apply a more efficient collection control.  

The IRS amended Resolution No. NAC-DGERCGC15- 00000455*, which establishes the content of the Annex of Related Party Transactions and Comprehensive Transfer Pricing Report to simplify the limits for reporting companies that must file the Comprehensive Transfer Pricing Report, simplifying the following: 

  • The threshold for filing the Comprehensive Transfer Pricing Report for companies with related party transactions abroad has been reduced from sales exceeding $15 million to $10 million.   
  • The taxpayer may not file any additional Comprehensive Transfer Pricing Report for a tax period in which the Tax Authority is currently reviewing or has completed its determination process. 

Transactions Not Contemplated 

In order to calculate the amount by which the schedule and the report are filed, transactions with other local related parties of the same tax period are excepted, but without any of the following conditions: 

  • The related party with which the taxpayer carries out transactions obtains income from agricultural cattle activities at the production and/or local commercialization phase or from abroad. 
  • This declares a taxable income tax base of less than zero.  
  • It has taken advantage of any type of income tax exemption (previously, any type of tax benefits or incentives were considered, including those established in the Organic Code of Production, Commerce, and Investment).  
  • It is totally or partially reduced from the income tax rate (Previously, it was reduced from the rate for reinvestment of profits).  
  • It is the administrator or operator of a Special Economic Development Zone.  
  • It is engaged in the exploration or exploitation of non-renewable natural resources.  
  • It has holders of rights representative of its capital that are resident or established in tax havens or lower tax jurisdictions. (Previously, representatives were only those established in tax havens). 
Source: Expreso