Transfer pricing audits are expected to increase in the region with the aim of limiting deductions and controlling multinationals.
Transfer pricing tax control regimes in Latin America have been subject to continuous reforms aimed at protecting the tax revenues of States from aggressive tax planning designed and implemented by multinational groups.
At the 7th International Tax Law Congress organised by the Administrative Tax Tribunal (TAT), we discussed the prospects for transfer pricing in the region given the interest in this subject in the academic and business community and the general public.
In this sense, in the region, these perspectives should focus on the actions of the "Inclusive Framework" of the OECD's Base Erosion and Profit Shifting Project (BEPS), which various states have gradually implemented, such as "Action 13: Transfer pricing documentation and country-by-country reporting" and "Action 5: Combat harmful tax practices, taking into account transparency and substance".
These reforms to countries' regulations, in line with the proposed actions, have resulted in the standardisation of supporting documentation for multinational groups, the subjection of taxpayers operating under a preferential tax regime to the transfer pricing regime, and the power of tax administrations to request supporting documentation with the aforementioned characteristics.