1. POLICY ASPECTS OF TRANSFER PRICING
Isaác Gonzalo Arias Esteban
International Cooperation and Taxation Director
Regional seminar on multinational taxation & transfer pricing
Jun 10-12, 2014
Port of Spain, Trinidad & Tobago

2. MATURITY BIG INFLUENCE RESOURCES COMPLEXITY GOALS INFORMATION
CONTEXT
MATURITY
BIG INFLUENCE
RESOURCES
COMPLEXITY
GOALS
INFORMATION
Current guidelines are a good starting point
“Tropicalization” is advisable
Are there significantly better alternatives?

3. Artificial transactions
Transfer pricing methodology and general principles
Arm´s Length
Artificial transactions
Economic reality
Market price

4. Which should be the situation of exempt income tax taxpayers?
Transactions subject to transfer pricing
MOST USED
All transactions with related parties
Transactions with entities established in “Tax Havens”
ALTERNATIVES
Income level
Patrimony
Amount of transactions
Transactions with persons established in free zones.
Which should be the situation of exempt income tax taxpayers?

5. Associated related parties
Parent company and its branches, subsidiaries and PE
Branches, subsidiaries and PE among themselves
Direct and indirect stock participation
Decision-making or control
Same members, partners or stockholders participate in the board of directors or decision-making
Through kinships or affinity with managers or administrators up to a certain level
Trough rights maintained in a trust
Corporations domicilied in tax havens or preferential tax systems
Distribution of profit
Actual management
Proportion of transactions (purchase/sales)
Price mechanisms used between the parties
Exclusive agent
Consanguinity and/or afinity

6. Burden of proof
TAX ADMINISTRATION
TAXPAYER

7. Approach for all-inclusive hotels
Methods
Comparable Uncontrolled Price
Resale Price
Cost Plus
Profit Split
Residual profit Split
Transactional Net Margin
OCDE
Innovations
So called “6th. Method”
“Fix margings”
Market price average
Approach for all-inclusive hotels
Hierarchy
Best method rule/no hierarchy
Preference of method

8. Taxpayer obligations TP Return or report Conserve or present
Conservation period
Frequency
Penalties

9. Which kind of APA exists?
What is an APA?
Which kind of APA exists?
What could be a good negociation period?
What about the duration?
Does it have cost?

10. Exemption from transfer pricing system
Simplified system for taxing international transactions
Exemption from transfer pricing system
“Safe harbours” rate of interest
Exemption from supporting documents
“Safe harbours” methods

11. The future of transfer pricing legislations
Unitary Taxation Approach
Country by Country Report
Intangibles (new approach)
Safe harbours
Profit Split Method
6th “Method”
BEPS work…

12. THANK YOU VERY MUCH FOR YOUR ATTENTION
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