Upcoming transfer pricing due dates in the Americas
Argentina: December 29
- Submission of Country-by-Country report for companies whose ultimate parent entity has a fiscal year ending (FYE) on 12/31/22.
- 1st Notification Country-by-Country report due for companies whose ultimate parent entity has their FYE in 09/23.
- 2nd Notification Country-by-Country report due for companies whose ultimate parent entity has their FYE in 10/23.
Canada: December 29
- Country-by-Country report due for companies whose ultimate parent entity has their FYE on 12/31/22.
Costa Rica: December 29
- Country-by-Country report.
Panama: December 29
- Country-by-Country report for companies whose ultimate parent entity has their FYE on 12/31/22.
- Country by Country report notification for companies that have not notified before or whose information has changed.
Uruguay: December 29
- Country-by-Country report for multinational companies whose ultimate parent entity has their FYE in 12/22.
- Country-by-Country report notification for companies whose ultimate parent entity has their FYE in 12/23.
Venezuela: December 29
- PT99 – Informative Affidavit for companies with their FYE on 06/30/22.
Argentina: December 26 – January 2, 2024
- Local File and F.2668 for companies with their FYE in 06/23.
- Master File for companies with their FYE in 12/22.
Mexico: January 2, 2024
- Country-by-Country report.
- Master File.
Colombia: taxpayers required to submit tax information 2024
Through Administrative Resolution 000162, the Colombian tax authority (DIAN) announced which taxpayers are required to provide tax information for the taxable year 2024, indicating the content and technical characteristics for filing and the deadlines set.
The list of taxpayers that must submit certain information is found in Title I of the resolution, which includes:
- Public or private entities that enter into cooperation and technical assistance agreements, for the support or execution of their programs or projects, with international organizations.
- Stock exchanges and stockbrokers.
- Natural persons that during the taxable year to be reported or the immediately preceding taxable year have obtained gross income in excess of 11,800 Tax Value Units.
- Those natural or legal persons who are required to file consolidated financial statements.
- Permanent establishments of non-resident individuals and foreign legal entities, among others.
Additionally, Chapter 14 of the Administrative Resolution clarifies the information that must be provided for related parties. We recommend that companies that are required to provide this information maintain consistency with the information on related parties reported for transfer pricing documentation purposes.
To read the resolution, click here.
Colombia-Spain: treatment of transfer of profits
On September 13, with Tax Concept 1380-005221, the CIJUF (Centro Interamericano Jurídico Financiero) established that for the transfer of profits from a Colombian branch to its headquarters in Spain, the definition of ‘dividends’ does not apply as provided in article 10 of the Agreement between Spain and Colombia to avoid double taxation and prevent tax evasion on income and wealth taxes.
For even if the transfer of profits from a branch office qualifies as a dividend under Colombian tax law, the definition of dividends is covered by Article 7 of the treaty and, as such, should be treated as a business profit.
On the other hand, the tax legislation establishes that the transfer of profits of Colombian origin obtained through permanent establishments or branches located in Colombia, is considered as a distribution of dividends.
To consult Concept 1380-005221 click here.
Global: ruling against Coca-Cola in IRS tax proceedings
The U.S. Tax Court has issued a ruling in favor of the IRS in connection with the Coca-Cola Company & Subsidiaries v. Commissioner of Internal revenue, a transfer pricing case. This case centers on Coca-Cola’s practice of allocating profits to various subsidiaries, shifting their excess earnings to foreign jurisdictions in order to avoid paying higher U.S. taxes. As a result, the IRS made adjustments to the tax returns filed.
While the company disagrees with the court’s interpretation, it is seeking a final resolution of the case in order to file an appeal, arguing that it is unconstitutional to face a retroactive tax liability based on the IRS’s use of a calculation methodology that was different from the one that was agreed upon and approved long ago in examinations over more than a decade.
By its own estimates, Coca-Cola has $14 billion (€13.1 billion) at stake, of which it will have to pay approximately $5.6 billion in the short term.
For Coca-Cola’s press release, click here.
Mexico-Spain: summary of the multilateral agreement published by the Ministry of Finance of Spain
On November 10, 2023, the Spanish Ministry of Finance published a summary of all items of the tax agreement with Mexico that were changed by the multilateral agreement for the application of measures related to the prevention of tax base erosion and profit shifting.
The principal changes will apply to:
- Taxes withheld at source on amounts paid or paid to non-residents, as of January 1st, 2024.
- All other taxes in Spain levied in tax periods beginning on or after June 10, 2024.
- All other taxes in Mexicolevied in tax periods beginning on or after January 1st, 2025.
For a summary of the text, click here.
OECD: new members join the Inclusive Framework on BEPS
The Philippines and Kuwait join the Inclusive Framework on BEPS, which now has more than 140 member jurisdictions.
Through their accession, they will also participate in the Pillar 1 and Pillar 2 plan to reform international tax rules, contributing to international efforts against tax evasion.
To consult the list of members of the Inclusive Framework on BEPS, click here.
OECD: statistics on MAP 2022 cases
On November 14th , statistics were released on MAP 2022 cases (“Mutual Agreement Procedures”), which aim to increase the effectiveness of dispute resolution mechanisms. These statistics provide an overview of progress and areas where further work is needed.
The most relevant points shown by these statistics are:
- The increase of new MAP cases (almost 3%) shows that taxpayers are increasingly engaging and relying on MAP due to its increased availability and access.
- Fewer MAP cases were closed in 2022 compared to 2021 (approximately 4% less), affecting both transfer pricing and other tax cases.
- Approximately 73% of MAPs concluded in 2022 fully resolved the matter, both for transfer pricing and other issues.
The average duration of cases is starting to approach the target of 24 months. Transfer pricing cases took an average of 29 months, proving that although taxpayers are requesting more MAPs, the authorities are rising to the challenge through increased resources and better case management.
To view the statistics, click here.
OECD: jurisdictions seek to implement Crypto-Assets Reporting Framework
As part of efforts to combat tax evasion, 48 jurisdictions are seeking to implement the OECD’s Crypto-Asset Reporting Framework (CARF) by 2027.
The CARF framework seeks the automatic exchange of relevant tax information on crypto-assets, a key component of tax information exchange developed by the OECD under a G20 mandate stemming from the increasing digitization of financial markets.
The list of countries seeking implementation was published by the UK Treasury and can be found here.
To learn more about the CARF framework, click here.
OECD: publication of reports on transparency and exchange of information on request
On November 8, the Global Forum on Transparency and Exchange of Information for Tax Purposes published new reports on transparency and exchange of information on request (EOIR – “Exchange of Information on Request”) for six of its members (Latvia, Mauritania, Pakistan, Poland, Serbia and Thailand), and supplementary reports reflecting the progress made by two members (Botswana and Dominica) in implementing the EOIR standard.
The EOIR standard applies when the tax authority of a requesting jurisdiction requests specific information from the competent authority of a partner jurisdiction.
With these progress reports, more than half of the Global Forum members have so far been examined, with the ratings assigned to 88% as “compliant” or “largely compliant”; 10% as “partially compliant”; and 2% as “non-compliant.”
To read the reports, click here.
OECD: new publication on transfer pricing in the mining sector
On November 6, the OECD ((Organisation for Economic Co-operation and Development) and the IGF (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development) published two new documents, which are tools to provide detailed guidance to tax administrations in resource-rich countries on how to apply transfer pricing rules to the sale of mineral products.
The first of these documents outlines a framework designed to help developing countries address the challenges of transfer pricing of minerals and includes simplified administrative approaches to pricing mineral sales that could reduce the administrative burden on developing countries. The second applies this transfer pricing framework to a specific mineral, bauxite. Both documents are available in English and French.
To read the documents, click here.
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