Transfer pricing in Chile at a glance
|Regulation Type||National regulation / Recognizes OECD|
|Are there specific transfer pricing regulations?||Yes|
|Submission deadline||June of each year|
|Submission deadline upon request||Instantly|
|Annual update required||Yes|
|Official language requirements||Spanish|
|Potential impact of penalties||5% of the adjustments|
Chile tax law
Rules for transfer pricing in Chile are based upon:
- Income Tax Law articles 38 and 41 E
The transfer pricing regulations in Chile are not based on the OECD Transfer Pricing Guidelines. However, since 2010 Chile is an official OECD member and therefore the OECD Guidelines should be taken into consideration when dealing with transfer pricing issues.
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
- Residual profit methods
- Other reasonable methods
Priority of methods
Rules for transfer pricing in Chile prescribe that the most appropriate method should be used.
Information that should be included in the documentation:
Taxpayers in Chile are expected to keep all relevant information that was necessary to establish a method that provided an arm’s length result.
All documentation in Chile must be submitted in Spanish.
Requirements to prepare documentation annually
Chilean taxpayers are obliged to submit a transfer pricing return annually. Upon request of the tax authorities, a taxpayer can also be obliged to maintain a transfer pricing study.
Submission deadline upon request by tax authorities
Upon request of the tax authorities, documentation should be submitted instantly.
Advance Pricing Agreements
Rules for transfer pricing in Chill provide for an option to obtain Advance Pricing Agreements (APA).
The term for which an APA is agreed upon is generally three to five years.
In case a transfer pricing adjustment needs to be made, the Chilean tax authorities can impose a penalty of five percent of the adjustments.