In 2026, the Colombian peso experienced one of the most pronounced exchange rate fluctuations in the region. The Representative Market Rate fell from $3,757 per dollar on January 1 to $3,443 on July 1, according to official figures from the Banco de la República—a cumulative appreciation of more than 8% in the first half of the year, and nearly 18% compared to the same period in 2025. Behind this macroeconomic news lies a specific and rarely discussed technical implication: this exchange rate movement may be distorting, at this very moment, the comparability analysis of Transfer Pricing for any Colombian company with export operations.
The Mechanism Behind the Distortion
A Colombian company that exports goods or services and invoices primarily in dollars, but incurs most of its operating costs in pesos (payroll, leases, local inputs), faces a structural currency mismatch in its income statement. When the peso appreciates at the rate observed this semester, each dollar billed converts to fewer pesos, while the cost structure in local currency remains virtually unchanged. The result is a compression of the operating margin measured in the entity’s functional currency—precisely the indicator that is compared against the interquartile range of independent comparables under methods such as the Transactional Net Margin Method.
The underlying problem is that this exchange rate effect does not necessarily affect the comparable companies selected for benchmarking in the same way, especially when dealing with international comparables that do not share the same cost structure in Colombian pesos. A Colombian company may end up reporting a margin below the arm’s-length range not because its market conditions have deteriorated, but because the exchange rate artificially compressed its results in the currency used for measurement and comparison.
Why This Cannot Be Resolved with an Automatic Adjustment
The OECD Guidelines recognize economic circumstances as one of the five comparability factors that must be analyzed when selecting and evaluating comparables (Chapter I, 2022 Guidelines). However, there is no standardized, automatic “exchange rate adjustment” mechanism within the OECD framework—unlike working capital adjustments, which do have a widely accepted methodology. This means that the technical response to the peso’s revaluation cannot be limited to applying a formula: it requires a substantive and well-documented economic analysis of how exchange rate volatility specifically affected the transaction being valued, and whether that effect is genuinely unrelated to market conditions that an independent comparable would also have faced.
A margin below the range in 2025 or 2026, explained solely by the generic argument that “the peso appreciated,” will not, on its own, constitute sufficient technical justification before the DIAN. What can strengthen the taxpayer’s position is demonstrating, with quantifiable data, the magnitude of the currency mismatch between revenues and costs, and assessing whether the selected set of comparables adequately captures companies exposed to comparable exchange rate conditions.
What to Review Before Finalizing the Analysis for the 2025–2026 Fiscal Year
For companies currently finalizing their Local File for the 2025 fiscal year or projecting their position for the end of 2026, now is the time to anticipate the impact—not to discover it during a potential audit. The ratio of revenue invoiced in dollars to costs denominated in pesos is, in practice, the first figure that should be calculated to gauge the actual exposure of each exporting entity.
At TPC Group, we assess the impact of exchange rate volatility on the comparability analysis for our clients with export operations in Colombia, and we prepare the necessary technical justification to properly document any deviation from the arm’s-length range resulting from extraordinary economic circumstances.
If your company exports from Colombia and invoices in foreign currency while operating with a peso-denominated cost base, our Transfer Pricing team can assess the actual impact of the peso’s revaluation on your comparability analysis before the end of the fiscal year.
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