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WHAT INFORMATION IS NECESSARY FOR THE TRANSFER PRICING CONTROL? PROCESSES FOR WHAT? RISK MANAGEMENT CONTROL WHAT INFORMATION EXISTS TO COMPLY WITH THE “ARM’S LENGTH” PRINCIPLE? WHAT HAPPENS IN LAC?
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Márcio F. VerdiExecutive Secretary
Interamerican Center of Tax Administrations
Transfer Pricing DocumentationAccess to useful information
CONTEXT
100% of LAC countries have TP standards and have established an information regime
Few Caribbean countries have provisions in this regard.
THE GOOD THE BAD
The current regimes of information are of little use - statement, study, etc.
Little is known of relevant businesses in several countries
The DTCs/TIAES increase exponentiallyLittle is exchanged and there are no coordinated procedures in LAC
In some countries banking secrecy or inability to identify owners of assets remain in force
TAs believe that TP is a priority issue and gradually invest resources.
Information is asymmetrical and scarce due to various circumstances.
Most countries use commercial databases, Osiris being the most used.
Some countries have access to horizontal cooperation based on transparency standards.
Internal comparable are very hard to find and the external do not abound
WHAT INFORMATION IS NECESSARY FOR
THE TRANSFER PRICING CONTROL?
PROCESSES FOR WHAT? RISK MANAGEMENTCONTROL
WHAT INFORMATION EXISTS TO COMPLY WITH THE “ARM’S
LENGTH” PRINCIPLE?
WHAT HAPPENS IN LAC?
Information Regime of large companies in 5 LA countries
Information Regime of large companies in 5 LA countries
The road to CBCR
What is the level of knowledge in the region? What concerns exist?
Level of knowledge and some data from the region according to CIAT/TJN
What some LA countries
do?
The agreement was signed
by 3 countries
Only 50% reported
having an extensive
knowledge
87% needs are satisfied
by CBCR
75% require adjusting standards
Access:20% TAs
30% central DB
50% subsidiary
What are the remaining concerns?
Maturity
Number of countries
that implement
CBCR
Risk management
ThresholdAdjust the
current regimes
Modify rulesCooperative compliance
Dispute resolution
Access to information
Resistance of local
companies
Control/ Audit