Transfer Pricing Regime Obligated Parties -Maturity dates begin in September

For this purpose, the Transfer Pricing Regime requires compliance with formal obligations for taxpayers that meet the following requirements:

a. Obliged to the Transfer Pricing Regime

Are obliged to the Transfer Pricing Regime, and therefore to comply with the Full Competence Principle, those income taxpayers that comply with at least one of the following assumptions:

(i) Perform operations with related parties [2] abroad.

(ii) Carry out operations with related parties in a free zone.

(iii) Carry out operations with any entity or person located, domiciled or resident in a non-cooperating jurisdiction, of low or no taxation or subject to a preferential tax regime (hereinafter referred to as Non-Cooperating Jurisdictions) [3].

b. Formal Transfer Pricing Obligations

Once it is verified whether the taxpayer is obliged to the Transfer Pricing Regime, the scope of its formal obligations must be verified, which are divided into two: (i) Presentation of Informative Declaration and (ii) Presentation of Proof Documentation, which will have a scope according to the fulfillment of certain requirements detailed below.

(i) Informative Declaration:

It must be filed by taxpayers subject to the Transfer Pricing Regime, who have a Gross Assets equal to or greater than 100,000 UVT [4] or Gross Income equal to or greater than 61,000 UVT [5] as of the last day of the closing of the taxable period.

It must also be filed by taxpayers who carry out operations with entities or persons located, domiciled or resident in Non-Cooperating Jurisdictions, regardless of their income or net worth.

(ii) Supporting Documentation:

Taxpayers subject to Informative Declaration must corroborate whether they are required to submit Supporting Documentation and its scope.  In this sense, the assumptions to determine the scope of the Supporting Documentation are summarized below:

1. Local Report:

It must be filed by taxpayers who are obliged to file Information Returns, only with respect to the types of operations that exceed, cumulatively in the year, 45,000 UVT [6].

In turn, it must be filed by taxpayers who have carried out operations with Non-Cooperating Jurisdictions with respect to the types of operations that exceed, cumulatively in the year, 10,000 UVT [7].

2. Master Report:

Must be filed by those taxpayers obliged to file Local Report and who belong to a multinational group.

3. Country-by-Country Report:

Must be filed by the taxpayer that is controlling of a multinational group that in the previous year has obtained consolidated income equal to or greater than 81,000,000 UVT[8], or that without being controlling is designated as responsible for providing the Country by Country Report or is obliged to file it for having a participation in the income of the group, in accordance with literal c of numeral 2 of article 260-5 of the Tax Statute.

c. Deadlines

Finally, both the Informative Declaration and the Supporting Documentation must be filed within the dates established by the National Government (See the due dates of the declaration and of each one of the reports in the annex), under penalty of incurring penalties for non-compliance.

[1] See Art. 260-2 of the Tax Statute. It should be clarified that such Principle implies that conditions that would be used between independent parties are met.

[2] The relationship criteria can be found in Article 260-1 of the Tax Statute and includes, among other criteria, subordination, and economic relationship.

[3] Vr. Article 1.2.2.2.5.1 of Decree 1625 of 2016. These jurisdictions include Hong Kong, State of Qatar, Angola, Maldives, Trinidad, and Tobago.

[4] $3,560,700,000 for 2020 purposes.

[5] $2,172,027,000 for 2020 purposes.

[6] $1,602,315,000 for 2020 purposes.

[7] $356,070,000 for 2020.

[8] $ 2,884,167,000,000 corresponding to 2020.