Executive summary

On June 6, 2016, the Costa Rican tax authority (the DGT),¹ issued a draft of the transfer pricing informative return regulations (the Regulations), which were previously mentioned in Art. 8 of Executive Decree N° 37898-H, published September 13, 2013 (the Executive Decree).

The Regulations were published in the Official Gazette on July 8, 2016, starting the 10-day period for taxpayers to comment on the Regulations.

The most significant provisions of the Regulations are discussed below.

Who's required to file?

In accordance with Art. 8 of the Executive Decree, Art. 2 of the Regulations requires the following taxpayers to file a transfer pricing return: (1) all "large national taxpayers" and "large regional companies" engaged in domestic or cross-border transactions with related companies, and (2) all companies operating under the free trade zone regime established by Law 7210 of November 23, 1990, and its amendments.

Timeline and means for filing

The transfer pricing informative return must be filed before the last business day of June of each year and must include all the transactions performed during the fiscal period covered in the taxpayer's last tax return. For fiscal year 2015, the transfer pricing informative return must be filed no later than the last business day of June 2017.

At least three months before the filling due date, the DGT will make available the technological resources necessary to electronically submit the transfer pricing return. It will also make technological resources available for taxpayers without internet access.

Information required to be filed

The transfer pricing return must include information identifying the taxpayer and its related companies, as well as details of the transactions carried out, amounts, the transfer pricing method used, and profit-level indicators and/or prices, among other information.

Penalties

Taxpayers that fail to timely and correctly submit their transfer pricing return may be subject to penalties, while lesser penalties may apply to taxpayers whose transfer pricing return contains incorrect information (see Article 83 of the CNPT).²

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ENDNOTES

¹ Spanish acronym for "Dirección General de Tributación".

² Spanish acronym for "Código de Normas y Procedimientos Tributarios".