20 December 2016 Uruguayan tax authorities issue ruling on transfer pricing requirements for corporations that derive some income from tax-exempt activities A corporation that participated in a tax-exempt activity is required to comply with the transfer pricing rules. On December 6, 2016, the Uruguayan tax authorities issued Ruling No. 5,947, concluding that a corporation that has income derived from a tax-exempt activity is subject to the transfer pricing rules. A corporation conducts business with foreign related companies. The income derived from that business activity is exempt from the corporate income tax. The corporation requested a ruling from the tax authorities on whether it is required to carry out a transfer pricing analysis for its transactions with the foreign related companies. The corporation asserted that there would be no tax impact from any transfer pricing adjustment by the tax authorities. The tax authorities concluded that the corporation is subject to all transfer pricing rules because it carries out transactions with foreign related companies, even though the income from those transactions is exempt from tax. Thus, the corporation must carry out the transfer pricing analysis, keep the supporting documentation and submit the transfer pricing report.
Document ID: 2016-2179 | |||||||||||||||||||
