Considerations of TRANSFER PRICES in Costa Rica

Considerations of TRANSFER PRICES in Costa Rica

It is applied to taxpayers that conduct operations of income and expenses or that have impact on income tax, with companies considered of the same economic group, or where an influence over decision making about prices exist, or that at least 25% of participation in social capital, voting right, among other motives which link the companies exist.

Local reports must be done once a year, per tax period registered and in local currency.

An adjustment in transfer prices can be of voluntary nature or when the Tax Administration applies such procedure, which, for all purposes, this last one is the median (50 percentile). This is originated when at finishing the results obtained in the tax period, it is demonstrated that the price agreed among the related parties translates into a benefit which results in a less tax payment.

The regulation of transfer prices in Costa Rica analyses operations with local and foreign related parties.
In Costa Rica 3 levels of documentation in price transfer subject remain in force: i) local report, ii) Corporate report (master file) and iii) country by country report (applies with exceptions).

There is no minimum amount which activate the obligation to maintain the transfer prices in order for the taxpayers.
Currently the obligation of the informative declaration of transfer prices is suspended by Resolution DGT-R-28-2017.
The taxpayers have a new tool for price transfers called, Anticipated Price Agreement APA. This allows, after a request is done to the Sub-directorate of Price Transfer Previous Agreement of the General Directorate of Taxation-SAPPT, to safeguard and anticipate the results of the operations submitted to revision with the purpose of fulfilling the arm’s length principle, up to five years.

The practice of transfer prices brings multiple benefits to the companies, such as the tax compliance, a correct risk management, centralization of functions, among others.

With the adherence of Costa Rica to the selective group of the Organization for Economic Cooperation and Development -OECD, it is submitted to a higher pressure of the transfer prices obligations. The Tax Administration recognizes the guidelines of his organization which acts as a guide in the practice of transfer prices in Costa Rica.


Bianka Vargas M.

Senior Transfer Prices

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