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Trends on transfer pricing: Venezuela
1. Venezuela: Trends in Transfer Pricing
Transfer Pricing
► Nelson Landaeta C.
nelson.landaeta@nlc-asesoria.com
www.nlc-asesoria.com
2. Agenda
Recent developments on transfer pricing in
Venezuela
Issues considered by the SENIAT to start an audit
process on transfer pricing
Basic aspects considered by SENIAT during a
Transfer Pricing audit process
Recommendations to be prepared for an audit
process
4. Recent developments on transfer pricing in Venezuela
Seniat has issued several TP During the past six years, the
assessments to relevant multinational transfer pricing personnel from
corporations in diverse industries, SENIAT has being participating in
which have been publicly informed: joint training sessions with other
Automotive: Mitsubishi Motors, tax authorities in Mexico and
Mack, Chrysler; GM Europe.
Oil Industry: Shell Venezuela, Adoption of the updated OECD
Exxon Mobil, Eni transfer pricing guidelines
Pharmaceutical: Pfizer Venezuela, approved on July 2010.
Food Industry: Alimentos Heinz More aggressive presence of tax
authority in transfer pricing
auditing process
Inclusion of thin capitalization rules
during 2007 VITL amendment;
6. Issues considered by the SENIAT to start an audit
process on transfer pricing
Taxpayers with costly debts and interests Rejection of the use of foreign Global
from long term loans effected with their Master File TP documentation;
respective related foreign party Using non updated financial information
from comparable companies up to June
Changes in TP methods without adequate of the FY subject to study;
justification from one year to another year; Inconsistency between TP report, Income
Tax Return and PT-99 Form;
Profit Level Indicators (PLI) below the first Showing lower operating margins
inter quartile arm’s length range; comparing with operating margins from
previous year.
Significant payments to related parties for Late filing of PT-99 Form.
intra group services and technical assistance;
Linked cooperation among all the Main
Customs Tax Administration and the TP
Administration;
8. Basic aspects considered by SENIAT during a Transfer
Pricing audit process
Review of compliance with the Analysis of financial information
requirements set under Article 169 of used: (Historical / re expressed)
the VITL, the transfer pricing study (aggregated / segmented);
and all supporting documentation for
Selection criteria for external
each transaction subject to analysis;
comparable (TNM)
Contemporaneity of the comparable
Review of economical analysis set run process
aspects such as:
Review of the acceptance and
Internal comparable rejection;
rejection matrix contained in the
CUP method discard; study;
Discarding other methods;
Characterization of the entity based on
their functions, assets and risks (TNM
Analysis);
10. Recommendations to be prepared for an audit process
Carry out regular meetings between the Finance area and / or tax, operations
and marketing areas in order to handle details on its operational aspects and
its relationship to transfer pricing issues that could arise from them;
Identify potential service providers (prove non-availability of services locally)
in the case of payments for technical assistance;
Make sure to have all the supporting documentation evidencing the reception
of services from a foreign related party;
Supporting documentation language: Spanish
Establishment of procedures through which the supporting information is
properly filed prior to the start of an audit process.
11. Thanks for your attention !
► Nelson Landaeta C.
nelson.landaeta@nlc-asesoria.com
www.nlc-asesoria.com