NewsFlash October 2023

Upcoming transfer pricing due dates in the Americas

  • Argentina: November 30th.

  – Second Country by Country Reporting Notification due for Argentinian subsidiaries of Ultimate Parent Entity with Fiscal Year Ended in September 2023.

OECD: negotiations on multilateral agreement to facilitate the application of the global minimum tax are concluded.

On October 3rd, the OECD published the multilateral agreement to facilitate the implementation of the Subject to Tax Rule (STTR), which is an integral part of Pillar Two, the two-pillar solution proposed by the OECD to address the tax challenges arising from the digitalization of the economy.

This rule will allow countries to tax certain intra-group payments, where these payments are subject to a tax rate of less than 9%, and will allow jurisdictions where income is generated to impose a tax where they would otherwise be unable to do so under tax treaty provisions.

The full treaty document can be accessed here.


Brazil: tax on financial transactions levied on lending operations between non-financial entities is constitutional

On October 9, 2023, through Appeal 590186 (general issue number 104), the Supreme Court decided that the application of the tax on financial transactions (Imposto sobre Operações Financeiras, IOF) to loan transactions carried out between legal entities or between a legal entity and a natural person (i.e., credit transactions other than those carried out by financial institutions) is constitutional.

The ruling clarified that the application of the IOF is not limited to credit operations carried out by financial institutions. Consequently, Article 13 of Law 9.779/99, which allows the application of the IOF on such operations, was declared constitutional.

To read the case, click here.


Mexico: tax incentives for key sectors of the export industry 

On October 11, the decree granting tax incentives to key sectors of the export industry, consisting of the immediate deduction of the investment in new fixed assets and the additional deduction of training expenses, was published in the Official Gazette.

This decree grants a tax incentive to corporations and individuals who pay taxes in accordance with the provisions of certain articles of the income tax law, when these taxpayers are engaged in the production, processing or industrial manufacturing of the goods indicated, and also export them.

Likewise, it established that such incentives are granted to taxpayers engaged in the production of cinematographic or audiovisual works whose content is protected by copyright, provided that such works are exported.

To read the decree, click here.

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