Global Tax Alert (News from Transfer Pricing) | 22 January 2014

Guatemala postpones transfer pricing regulations

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On 20 December 2013, Guatemala issued Decree 19-2013, which reforms the Tax Legislation Update –TLU- (Ley de Actualización Tributaria). TLU was published through Decree 10-2012 of 5 March 2012, which established the transfer pricing regulations, as well as other tax provisions, in effect since 1 January 2013.

Among the approved reforms, Decree 19-2013 postpones the application of the transfer pricing regulations to 1 January 2015.

Nevertheless, Decree 19-2013 states that the tax authorities are still entitled to request information regarding the content of Chapter VI of the TLU in order to create their databases.

Chapter VI of the TLU includes, among others, the definition of the arm’s-length principle and related parties; the criteria that taxpayers must follow to perform a comparability analysis; the methods to apply when assessing the arm’s-length principle; the taxpayer’s obligation to prepare and maintain the transfer pricing documentation necessary to support the arm’s-length nature of intercompany pricing; and the empowerment of the tax authorities to adjust prices.

For additional information with respect to this Alert, please contact the following:

Mancera, S.C., Mexico City
  • Jorge Castellón
    +52 55 5283 8671
    jorge.castellon@ey.com
Ernst & Young, S.A., San José, Costa Rica
  • Rafael Sayagues
    +506 2208 9880
    rafael.sayagues@cr.ey.com
Ernst & Young Limited Corp., Panama City
  • Luis Eduardo Ocando
    +507 208 0144
    luis.ocando@pa.ey.com
  • María José Luna
    +507 208 0147
    maria.luna@pa.ey.com
Ernst & Young, S.A, Guatemala City
  • José Echeverría
    +502 2386-2403
    jose.echeverria@pa.ey.com

EYG no. CM4123