Transfer Pricing in Guatemala

With entry into force once again of the rule on transfer pricing, companies must take into account all the requirements in order to avoid penalties and adjustments to income.

Tuesday, January 27, 2015

The regulations in force since January 1 require taxpayers to adequately demonstrate and justify "... the amounts of payments and / or profit margins in their transactions with related parties" in order to ensure fair competition and collection of taxes.

Experts recommend evaluating the requirements of the law in order to avoid "... adverse consequences such as: a) formal sanctions by the Superintendency of Tax Administration -SAT-, b) adjustments to taxable income by the SAT limiting revenues, costs and expenses related to nonresidents in the range of free competition, or c) ratings and observations from external auditors, which in the absence of a transfer pricing study may not be satisfied by the provision and calculation of income tax and can include a proviso or exception in the opinion of Audited Financial Statements. "

In his article published in, Mario Coyoy from Deloitte, said that "... In short, the legislation seeks to confirm that transactions with related parties who are non-resident comply with the "Principle of Free Competition" (arm's length principle), in order for taxpayers not to use pricing strategies to move profits corresponding to Guatemala, to other jurisdictions, allowing them to not pay, or pay less tax. "

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More on this topic

SAT Asks for Transfer Pricing Study

October 2015

Legislation on the obligation to submit transfer pricing studies is beginning to be applied in concrete by the Tax Authority.

In his article on, Mario Coyoy describes the requirements for taxpayers being developed by the SAT:

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1. Sufficient information and analysis (Study on Transfer Pricing) to demonstrate and justify the correct pricing, the amount of the consideration or profit margins in transactions with related parties abroad.

Guatemala: Agreements on Advanced Pricing with SAT

March 2015

The Tax Authority announced special audits in companies with "related parties abroad", which can be avoided by presenting an Agreement on Advance Pricing.

This year nine audits are being carried out with the objective of corroborating "... suspicions raised when key rights or trade credits have been created." According to a study conducted by risk teams to implement transfer pricing, coffee, bananas, sugar, fuels and metals sectors are reporting increased risk in their transactions.

Transfer Price and Comparable Transactions

April 2013

Two or more operations may be comparable as long as there is no economic difference between them that can affect the price of a good or service.

Jose Molina Calderon's article in reports that "for the purposes of determining a price or amount that can be agreed between independent parties in comparable transactions in conditions of free competition as referred to in Chapter VI of the Tax Update Law (LAT by its initials in Spanish), comparing the conditions of transactions between related persons other comparable transactions between independent parties.

Tax Changes in Costa Rica

March 2012

Already approved in the first instance, the draft Law on the Solidarity Tax involves substantial changes which will in general raise taxes on productive and commercial activities.

An article in reviews the main consequences of the adoption of the fiscal plan.