Within the framework of the ‘Project for the Control of Transfer Pricing Transactions in Trinidad and Tobago,’ a committee of the CIAT (Centro Interamericano de Administraciones Tributarias – Inter-American Center of Tax Administrations) visited the Ministry of Finance and its Directorate of Internal Taxes in the country, to formulate a diagnosis on the capacity of the national tax administration and define the economic profile of the country, as well as the expectations of the authorities.
It was financed by the Banco de Desarrollo de América Latina (Development Bank of Latin America), CAF (Corporación Andina de Fomento – Andean Development Corporation), on March 2-5.
New Transfer Pricing Regime
The Ministry of Finance recognized the opportunity, through a report, for the Ministry of Finance, the CAF, and CIAT, to create an innovative Transfer Pricing regime under the Arm’s Length Principle and adapted to the particular context of Trinidad and Tobago.
Discussion Topics
One of the subjects in question was the Arm’s Length Principle, the basis for Transfer Pricing. This principle establishes that the price agreed in a transaction between two related parties must be similar to that agreed in a comparable transaction between two unrelated parties.
The Arm’s Length Principle was agreed upon by all member countries of the Organization for Economic Co-operation and Development (OECD) and adopted as an objective guide for use by multinational enterprises and tax administrations in international taxation.
Source: Loop News 21/03/23
