Transfer pricing in Costa Rica

Transfer pricing in Costa Rica at a glance

Regulation Type National regulations
Are there specific transfer pricing regulations? Yes
Submission deadline N/A
Submission deadline upon request (N/A)
Annual update required No
Official language requirements Spanish
Potential impact of penalties N/A

 

Costa Rican tax law

Rules for transfer pricing in Costa Rica are based upon:

  • Executive Decree No. 37898-H

OECD

Costa Rica is not a member of the OECD, however, generally they follow the OECD Transfer Pricing Guidelines.

Methods

Accepted methods

Accepted methods are:

  • The comparable uncontrolled price method
  • The resale price method
  • The cost plus method
  • The profit split method
  • The transactional net margin method

Priority of methods

Rules for transfer pricing in Costa Rica prescribe that a taxpayers should apply the best method.

Documentation requirements

Information that should be included in the documentation:

Documentation requirements in Costa Rica only prescribe that the submitted documentation should state that the intercompany transactions are in line with the arm’s-length principle.

Language

Rules for transfer pricing in Costa Rica prescribe that documentation should be submitted in Spanish.

Requirements to prepare documentation annually

Rules for transfer pricing in Costa Rica do not prescribe that documentation should be submitted annually.

Submission deadline upon request by tax authorities

There is no official deadline to submit the documentation upon request by the tax authorities. However, if a tax audit takes place the documentation should be available at the time of the audit.

Advance Pricing Agreement

General 

Rules for transfer pricing in Costa Rica provide for the option to obtain an Advance Pricing Agreements (APA).

Terms 

The term for which an APA is agreed upon is three years,

Penalties

Rules for transfer pricing in Costa Rica do not prescribe specific transfer pricing penalties, this means that ordinary tax penalties apply.

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