Although the rules started to be applied on July 1, a regulation has not yet been defined and approved to regulate the way in which the declarations will be made.
The business sector is working on a proposal for a regulation to be agreed with the government, and once it is ready, companies can start making statements.
"..."We are working on the revision of the proposed regulation, we are in that situation at the moment, effectively it will come into force, but remember that it is not as if tomorrow companies have to go and make a presentation of the results related to this issue," said Aguerri.
Starting from June 30, the rules that oblige companies to report transfer prices are scheduled to come into effect.
At the beginning of last year,the date of entry into forceof Chapter V of the Tax Concertation Law was postponed, after the business sector stated that it was not prepared to start complying with the rule.
The Directorate General for Taxation has suspended until further notice the first informative statement on transfer prices, which had been scheduled for June.
From Resolution No. DGT-R-28-2017:
"...TRANSITORY I.- The deadline has been suspended for the presentation of the informative declaration on transfer pricing established in article 3 of resolution DGTR-44-2016 from eight o'clock on August 26, two thousand and sixteen until the Tax Administration communicates the date and the means for the presentation of the informative declaration on transfer pricing in accordance with article 1 of this resolution.
The bill proposed by the Association of Accountants is based on Mexican law and seeks to regulate commercial activities between related companies from one country to another.
Although there has existed a regulation since 2013, which establishes rules on transfer pricing in the country, the bill proposes to go beyond the provisions of the regulations and establish formal legislation on the subject, as exists in other countries.
Transfer pricing and double taxation are two of the topics covered in three bills to reform regulations which the Ministry of Finance has put to public consultation.
One of the proposals is the bill on "Informational declaration of transfer pricing".Crhoy.com explains that"...This empowers the tax authorities to check that transactions between related parties are valued at prices similar to those that would be agreed between independent parties in comparable transactions. "
Memorandum on the implementation of the rules on transfer pricing 2015 and payment schedule for obligations in January 2016.
From a Memorandum sent by Tezó and Associates:
Taxpayers who pay ISR (income tax) who carried out transactions in 2015 with related foreign companies, including imports, exports, services provided and received such as management services, legal, accounting, financial, technical or any other services; and where these operations had an impact on the determination of the income tax payable, are required to have a Transfer Pricing Study.
Reforms have been made to the Tax Act Coalition to postpone until June 2017 the transfer pricing reports the companies must present.
After the private sector claimed it was unprepared to begin sending reports on transfer pricing on January 1, 2016, as originally stipulated by law, the National Assembly passed an amendment to postpone the measure until 30 June 2017.
Before March 31, 2016 companies with related parties abroad must present a transfer pricing study.
Elperiodico.com.gt reports that "...Angela Paniagua, an auditor from the firm Ixcamparij Mejia y Asociados, explained that a lot of companies have not been notified that they must fulfill this obligation. The SAT only included a box in which they had to 'tick" if the company has operations abroad and asked for details for the tax administration database. There is lack of knowledge on the subject, because of, among other things, lack of disclosure of implications and a guide to the issues that must be reported to the SAT, said the auditor. "
The upcoming entry into force of the tax rules on transfer pricing may take some Nicaraguan companies unawares.
An article on Elnuevodiario.com.ni reports that "... Most Nicaraguans companies are concerned about not being ready to cope with the entry into force of the Law on Transfer Pricing from the first of January next year. "
Legislation on the obligation to submit transfer pricing studies is beginning to be applied in concrete by the Tax Authority.
In his article on Lahora.gt, Mario Coyoy describes the requirements for taxpayers being developed by the SAT:
/ ...
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..
It has been announced that in August the regulations governing transfer pricing will take effect and penalties will be imposed of $10 thousand to $20 thousand on companies that do not submit a declaration.
Companies that do not submit a declaration after three months after the entry into force of the regulations are subject to fines ranging between $10 thousand and $20 thousand.
The Executive Directorate of Revenue has announced that as part of the changes in the audit and tax collection it will oversee the transfer prices of companies headquartered abroad.
In addition to the implementation of electronic billing and other changes that aim to improve the supervision of tax collections, the Executive Directorate of Revenue (DEI) has announced that foreign companies or Honduran companies whose headquarters are outside of the country must report in detail their transfer prices.
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.
Tax Memorandum by Tezó and Associates on Transfer Pricing and schedule for payment obligations in February 2015.
Tax Memorandum by Tezó and Associates:
Under Articles 54 and 55 of Decree No. 10-2012, effective from January 1, 2015, the tax authorities can check whether transactions between related parties (an entity resident in Guatemala with a resident abroad), are rated according to the principle of free competition and make adjustments when the valuation agreed between the parties results in less tax being paid in the country or deferred taxation; if adjustments are made an audience must be conferred within the Process for Determination of Tax Liability by the Administration, established in the Tax Code. It is understood for tax purposes, under the Principle of Free Competition, that the price or amount for a particular operation that independent parties may have agreed in conditions of free competition should be comparable to those performed operations.