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🚨 The Receita Federal do Brasil has published instructions on how to submit transfer pricing documentation for FY 2023!   The most notable update is the treatment of the Local File document (or rather, documents from now on). The requirements go beyond what’s typically seen globally. The latest guidelines push for an advanced documentation structure, with multiple files detailing activities, intercompany transactions, and financials.   And here’s the kicker—these changes seem AI-ready! With Brazil’s tax authority (RFB) being one of the world’s leaders in tech-driven audits, it’s no surprise they’re designing requirements suited for the future. 📊🤖   📝 Key details to know: Submission Deadline: Last business day of December 2024 Local File is split in multiple files Format: Multiple PDF files (max size 15 MB each) through E-CAC Additional Instructions: Non-PDFs go in a ZIP file (max 150 MB) Learn more about the new guidelines here: https://lnkd.in/dhguUh_n   Ready to navigate the new TP landscape?   #BaseFirma #InternationalTax #TransferPricing #OECD

🚨Attention: Is your company thinking about investing in Argentina under the Incentive Regime for Large Investments (RIGI)?    If yes, then you must consider the following new transfer pricing regulations for MNEs operating in the country under the regime!   For further information, please contact:   Melisa Gómez - [email protected] #BaseFirma #InternationalTax #TransferPricing #RIGI #Argentina

We are thrilled to announce a revision to our sabbatical policy! 🎉 We've reduced the waiting period for eligibility from 10 years to just 5 years! This change reflects our ongoing commitment to offering valuable benefits and rewarding our employees for their dedication and hard work. At BaseFirma, we prioritize work-life balance and believe in supporting our team's well-being. By lowering the waiting period, we aim to ensure that our employees can enjoy a much-deserved break sooner, in line with our mission to foster a healthy and supportive company culture. 💼💙 #EmployeeWellBeing #WorkLifeBalance #BaseFirmaLife #Sabbatical #EmployeeBenefits

✒️ CUP Method for commodities is supported by Supreme Court in Perú In 2019, Tax Court rejected the transfer pricing adjustment determined by Peruvian tax authority (SUNAT) for a commodity sale intercompany transaction supported by a net margin method. ✔️ Positions: The taxpayer, a local mining company, had used the transactional net margin method to determine the arm’s length price for sales of zinc concentrates to its foreign related party. This was challenged by SUNAT who concluded that differences in certain factors (weight, percentage of humidity, loss, ore grade, recovery factor, etc.) do not affect the price that uses the international zinc quotation as a reference to arrive at the value of the concentrate, so the CUP Method was the appropriate method. The taxpayer appealed to the Tax Court, who ruled mostly in its favour, citing that SUNAT had not taken into account various comparability factors in determining the arm’s length price of the zinc concentrate under the chosen method.  SUNAT then appealed to the Supreme Court. ✔️ Outcome In 2024, the Supreme Court overturned the Tax Court’s decision and decided in favour of SUNAT, thus supporting the CUP method for a commodity transaction. From the Supreme Court’s point of view, SUNAT had properly assessed the relevant components of the zinc concentrate price and not only the international quotation. Also, The Tax Court had not considered the Article 32-A of the Peruvian Income Tax Law, which states that in export transactions with a known quotation on the international market, or with prices that are fixed by reference to the quotations of the specified markets, the market value shall be determined on the basis of such quotations. Key Takeaways: ❗ Intercompany transactions related to commodities (copper, gold, silver, zinc, corn, wheat, etc.) must thoroughly review the CUP Method as the appropriate method. ❗ According to local regulations, using a method other than CUP Method for intercompany transactions related to commodities must be supported by a technical assesment of the economic, financial and technical reasons that are reasonable and relevant to justify the use of said method. For more detail of the case, click in the following link: https://lnkd.in/dmDDqvKg If you need guidance on this matter, please do not hesitate to reach out to our team in Perú: Bruno Rojas - [email protected] Yasser Zola - [email protected] Cynthia Canessa - [email protected] #BaseFirma #InternationalTax #TransferPricing #CommoditiesPeru

✒️ Aplicación en Chile de normas antielusión con amplio alcance: Antecedente: En Chile, tal como en otras jurisdicciones latinoamericanas, existen incentivos claros que fomentan la inversión a través de deuda en lugar de capital, particularmente, la deducibilidad del gasto y tasas rebajadas de Impuesto Adicional (WHT). Recientemente, se ha aplicado la Norma General Antielusión (NGA) a un caso de financiamiento intragrupo donde el deudor nacional recibió financiamiento de una entidad extranjera relacionada registrada como institución financiera extranjera. Posición: Este fallo (apelable actualmente) del Tribunal Tributario y Aduanero (TTA) de las Regiones del Bío Bío y Ñuble, reconoce la postura del Servicio de Impuestos Internos (SII), es decir, confirma que las acciones del contribuyente resultaron en elusión tributaria. De hecho, en el marco del concepto de economía de opción para optimizar la carga tributaria, se destaca que no cualquier opción es válida, específicamente, establecer una institución financiera internacional exclusivamente para la transacción analizada constituye una estructura artificial, y se consideró que ésta respondía únicamente al objetivo de rebajar el porcentaje de retención al pagar intereses a la entidad extranjera. El mensaje central: ❗ La sentencia concluye que el contribuyente actuó con artifisiosidad para acceder a ventajas tributarias, aún si la estructura cumplía con los parámetros de forma para justificar la aplicación de una tasa rebajada. ❗ La principal implicancia para el contribuyente es que, siendo una norma altamente interpretativa, existe mucho potencial para futuras controversias, con largas fiscalizaciones y procesos judiciales, lo que hace necesario contar con un soporte robusto de la sustancia económica de transacciones relevantes. ❗ Este fallo se fundamenta en el soporte de la sustancia, más allá de la forma, y es relevante no solo en el contexto de Chile sino también para otros países de la región y particularmente para transacciones financieras.    🌎 Contacte a [email protected] para mayor información o apoyo. 

✒️ Regulatory changes in Chile due to the "Tax Obligations Compliance Bill" (Bulletin 16621-05). 🌎 Here is our summary of modifications over the transfer pricing and valuations framework. Reach out for additional information: [email protected]

✒️ Cambios regulatorios en Chile por el "Proyecto de Cumplimiento de Obligaciones Tributarias” (Boletín 16621-05). 🌎 El news flash contiene una síntesis de las implicancias en Precios de Transferencia y Valoraciones. Para mayor información: [email protected]

It's been a busy year for Receita Federal and multinational enterprises in #Brazil! Yesterday, two new relevant instruments were published: Provisional Measure 1.262/2024, and Normative Instruction 2.228/2024, which introduce an additional levy to the Social Contribution on Net Profits (CSLL) for large multinationals.   This aligns with President Lula's valued goal of positioning Brazil as a global player by adopting OECD international standards and strengthening its role within the G-20 forum, where it will host the global summit next month in Rio de Janeiro. It also contributes to the internal objective of achieving a 0% primary deficit by 2025.   🚨 Key Points:   Global Base Erosion and Profit Shifting (GloBE) Rules: Brazil joins the global movement to combat tax avoidance.   Qualified Domestic Minimum Top-Up Tax (QDMTT): This new levy aligns with international standards.   Who's Affected: Brazilian companies belonging to Multinational Enterprises with annual revenues of at least EUR 750 million (R$ 4.5 billion) for the Group.   🔍 How Does it Work?   Effective Tax Rate Calculation: The difference between the 15% minimum and the company's actual effective tax rate determines the additional levy.   GloBE Net Income: This metric plays a crucial role in calculating the effective tax rate.   ✒️ What Does This Mean for Businesses?   Increased Tax Burden: Multinational groups operating in Brazil may face higher tax liabilities if their global effective tax rate falls below 15%.   Compliance Challenges: Adherence to the complex Pillar II rules will require careful planning and robust compliance measures.   📅 Effective Date:   If approved by Congress during 2024, the new rules will take effect for fiscal years starting on January 1, 2025.   Do you need guidance to navigate through these exciting times? Please do not hesitate to reach out to our team in Brazil:   Ana María Rincon - [email protected] José Simões - [email protected] Sources: Provisional Measure 1.262/2024 - https://lnkd.in/edcX4uns   Normative Instruction 2.228/2024 - https://lnkd.in/eGa3kA-W   #BaseFirma #InternationalTax #TransferPricing #GloBE #OECD

In today's consulting landscape, technology and automation are increasingly hailed as the future of the industry. While we value technical innovation and cutting-edge solutions, we at BaseFirma remain convinced that the human touch has never been more crucial. We demonstrate this conviction every day through our investment in our people and our relationships. Once again, BaseFirma  is being recognized for our people. At the #ITRAwards2024, hosted by ITR (International Tax Review) , we were nominated in eight categories and honored with awards for Best Transfer Pricing Firm in Colombia and Best Tax Firm in the US - Denver Market. These accolades reflect our unwavering commitment to excellence, innovation, and delivering value to our clients. Thank you to our incredible team, whose dedication and talent make this possible. And a heartfelt thanks to our clients and partners for your trust and collaboration—you are the reason we come to work energized, motivated, and excited for the future. Here’s to many more milestones ahead! #BaseFirma #Awards #InternationalTax #TransferPricing

Peru Alert - APAs and Other Methods In the context of the tax reforms being promoted by the Executive Branch through the delegated powers granted by the Peruvian Congress, two legislative decrees have been published, specifically aimed at strengthening the regulatory framework for transfer pricing. These decrees, Legislative Decrees 1662 and 1663, introduce key modifications that impact the treatment of Advance Pricing Agreements (APAs) and the Other methods applicable to valuing transactions where reliable independent comparables are unavailable. ✔ Legislative Decree 1662 - APAs: This decree amends Article 32-A of the Income Tax Law to allow for the retroactive application of Advance Pricing Agreements (APAs), known as “roll-back.” This change facilitates the resolution of transfer pricing disputes, ensuring that agreements apply to prior years when the circumstances of those years are comparable. Recommendation: It is advisable to carefully evaluate the comparability criteria of prior years before applying the roll-back mechanism. Companies should ensure robust documentation to demonstrate that the conditions of previous years align closely with those of the APA application year to avoid potential challenges from tax authorities Link: https://lnkd.in/eRMCmunG ✔ Legislative Decree 1663 - Other Methods: This decree introduces new valuation methods for transactions within the scope of transfer pricing, complementing the methods previously established in the Income Tax Law when they are not appropriate. The regulation aims to reflect the economic reality of transactions and establishes the use of methods such as discounted cash flow, multiples, the equity participation valuation method, appraisals, and the Multiperiod Excess Earnings Method (MPEEM), applicable in transactions where no reliable independent comparables exist. Recommendation: Taxpayers should adopt a tailored approach when selecting these alternative methods, ensuring that the chosen method best captures the economic substance of the transaction. A technical report justifying the selection of the method must be prepared, detailing the reasons behind the choice and ensuring it withstands scrutiny from tax authorities. Link: https://lnkd.in/enmG6fe6 Contact [email protected] for additional information.