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Transfer Prices: An Opportunity to Be Taken
For companies, it is essential to review cross-border operations carried out with related parties, and it is crucial to have a study on transfer prices, in order to justify them in light of current tax regulations (Article 41 E of the Tax Law to the Income), since otherwise the SII is enabled to determine the prices, values or returns considered normal for the market and, in that case, for the determination of interest and fines.
In effect, the difference determined by the SII in the exercise of this power will be affected by the tax established in article 21 of the Law on Income Tax, that is, with a rate of 40%, and may also apply an equivalent fine. to 5% of the same amount (when the taxpayer does not deliver the required background information during the audit).
In addition, the sanctions associated with the sworn transfer pricing statement (Form No. 1907) should be considered in this matter, as indicated in Circular No. 31 of 2016, whose deadline expires this Friday, June 29.
Failure to present this statement will be sanctioned by the SII with a gradual fine, which depends on the number of operations and increases by the passage of time, reaching up to 50 UTA ($ 28,608,600).
For its part, the presentation late, also brings a fine, which depends on the number of operations and the delay, which could reach up to 40 UTA ($ 22,886,880).
In turn, the statement that has been presented incomplete or erroneous, also brings with it a fine, which is limited to 40 UTA ($ 22,886,880).
Finally, if the SII estimates that the presented statement is maliciously false, I could urge by the application of a fine ranging from 50% to 300% of the tax evaded and with greater prison in its middle to maximum grades (61 days up to 3 years ), in accordance with article 97 Nº 4, subsection 1, of the Tax Code.
In short, the presentation of information related to transfer prices and having a study that correctly justifies the values charged between related parties, constitutes an opportunity for companies, since doing it correctly will eliminate the possibility of a tax contingency.
**Translated bt Google Translate**
Director of the Economic Contentious Department at Cuevas Abogados (Since 2017). He worked previously as Director of Fiscal Defense in Amplus Tax & Legal (2014-2017).
He was Managing Director of the Fiscal Defense in KPMG (2013-2014).
He was Responsible Manager of the Disputes and Conflicts in Ernst & Young (2012-2013).
He worked as Lawyer in the Department of Internal taxes (2001-2011).