Currently, several countries have existing legislation on transfer prices. The legislation regulates the elements that should be available to carry out an annual survey of transactions between related companies, as well as indicators serving as basis for determining if transfer pricing between related parties are within legal parameters.
In Guatemala clause 8 of the Tax Code empowers Tax Administration authorities to establish overall rates of return, averages and percentages, gross profit, net income or income by business and industry as well as other professional activities or techniques for better determining taxes.'' Article 53 of the Income Tax Law Income regulates CIF price of imported goods, detailing the formula used to set the price.
The price of exported goods will be calculated according to international prices on the date of shipment. However, in future export contracts, the export price of the goods shall be calculated according to the international trading price of future contracts on the date of reception of the goods, which must be included on the contract. These prices are minus transportation costs, insurance and other costs affecting those goods while arriving destination.
The prices are expressed in Quetzales and the currency exchange rate is the one on the date of contract closing. The Department is empowered to conduct investigations as it deems appropriate in order to determine the income received and the income subject to tax."
We believe that for SAT to have the power to adjust transfer prices there should be specific legislation, but in Prensa Libre dated February 15, 2011, we find an article named "SAT to monitor funds from multinationals" whose text is reproduced below:
"The prices of goods or services between multinational companies based in the country and their foreign branches will be subject to review by the Superintendence of Tax Administration.
"We created a department of international control to make transfer pricing between related companies is transparent," said Rudy Villeda, Superintendent of Tax Administration.
This relates to the transfer of funds and inter-company sales, so that goods and services are not transferred at a price below market, affecting revenues.
The official said the project is supported by the U.S. Treasury and a German cooperation agency.
The department would begin operations in March. The idea is to have more information on multinationals and related companies abroad, as they sometimes declare paying taxes in other jurisdictions, something that should be verified, he said.
We suggest the review of transactions between related companies, meaning, head office, branches, affiliates, groups of companies under common management.
Detail on the ruling by the Constitutional Court regarding the deductibility of contributions to pension funds, and the February 2011 Tax Calendar.
On January 24, 2011, it was published in the Diario de Centro America, the ruling of the Constitutional Court regarding the unconstitutionality of the provision issued by the Superintendent of Tax Administration, Rudy Baldemar Villeda Vanegas, of not accepting the contributions made by customers of the Pension Fund for Retirement as a deduction in the process of determining the income tax in the year 2010.