The tax authorities' innovations to be implemented must be known, concerning Transfer Pricing in particular. In this regard, we will summarize the main legal amendments, which increase the administrative burden on taxpayers and reduce the deadlines for compliance with tax obligations.

1. Reduction of the Deadlines for Filing Documentation

Due to this amendment, the filing deadline for the Local Report has been shortened and will be on May 15, after the end of the fiscal year in question. These are the filing deadlines for the fiscal year 2022:

  • Annex 9 (DIM): May 15, 2023.
  • Local Information Statement: May 15, 2023
  • Master Information Statement: December 31, 2023
  • Country-by-Country Report: December 31, 2023

2.  Increase in the Number of Taxpayers Subject to Reporting

First, according to Article 32-H of the amended CFF, the number of taxpayers required to file the Local Information Statement and the Master Information Statement is increased for those individuals or legal entities that have carried out transactions with companies reporting their financial statements.

Second, the documentation required for transactions with related parties located abroad will also cover transactions with domestic counterparties. Thus, the administrative burden for taxpayers is increased.

3. Technical Aspects

a.     Maquila Companies: There is no longer an option to enter into Advance Pricing Agreements (APA) for taxpayers performing maquila activities to comply with their Transfer Pricing obligations. They will have to resort to the "safe harbor."

b.     Use of Comparables of the Fiscal Year under Analysis: The restriction of the temporality of the comparable data to the reference year will be required unless the business cycle of such product or service can be demonstrated to be of a longer period of time.

c.     Interquartile Range: The interquartile range is established as the most appropriate statistical method to determine remuneration according to the Arm's Length Principle for related party transactions. Conversely, the use of other types of statistical methods is still possible.

Source: Garrigues Comunica