Transfer pricing in Costa Rica at a glance
|Regulation Type||National regulations|
|Are there specific transfer pricing regulations?||Yes|
|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
Costa Rica is not a member of the OECD, however, generally they follow the OECD Transfer Pricing Guidelines.
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.
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.
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
Rules for transfer pricing in Costa Rica provide for the option to obtain an Advance Pricing Agreements (APA).
The term for which an APA is agreed upon is three years,
Rules for transfer pricing in Costa Rica do not prescribe specific transfer pricing penalties, this means that ordinary tax penalties apply.