Review and Comparison of Transfer Pricing Regulations in Latin America, the United States and the OECD Guidelines
Authors:   Deloitte,   Inter American Development Bank
Published: March 2024

This report, prepared by Deloitte Touche Tohmatsu transfer pricing specialists with the funding of the IDB, compares the transfer pricing regulations in the OECD guidelines, which constitute the international standard that OECD member countries have agreed should be used in analyzing transfer pricing issues between multinational enterprises and tax administrations, and the situation in Argentina, Brazil, Mexico, the United States, and Venezuela. It concludes that transfer pricing policies are not exclusively about taxation. Transfer pricing regulations should enable tax administrations to obtain a fair tax base at the same time they minimize the risks of double taxation for multinational enterprises. The OECD Guidelines provide the guidance on transfer pricing issues for both taxpayers and tax authorities by establishing a comparison with what would have happened between independent enterprises. However, there is no universal solution to transfer pricing issues in the OECD Guidelines. Also that the preface to the reform introducing the transfer pricing rules states that the tax administration, for purposes of computing the statutory margins for the import and export RP and cost plus methods, will take into consideration economic analysis by industry sector, branch of activity and based on the current economic situation. Adjustment will be allowed when the economic circumstances necessitate adjustment. This flexibility is different from the Brazilian rules, which provide fixed margins for all economic activities unless the taxpayer establishes a different margin with data from official publications or research carried out by a qualified firm. This report, prepared by Deloitte Touche Tohmatsu transfer pricing specialists with the funding of the IDB, compares the transfer pricing regulations in the OECD guidelines, which constitute the international standard that OECD member countries have agreed should be used in analyzing transfer pricing issues between multinational enterprises and tax administrations, and the situation in Argentina, Brazil, Mexico, the United States, and Venezuela. It concludes that transfer pricing policies are not exclusively about taxation. Transfer pricing regulations should enable tax administrations to obtain a fair tax base at the same time they minimize the risks of double taxation for multinational enterprises. The OECD Guidelines provide the guidance on transfer pricing issues for both taxpayers and tax authorities by establishing a comparison with what would have happened between independent enterprises. However, there is no universal solution to transfer pricing issues in the OECD Guidelines. Also that the preface to the reform introducing the transfer pricing rules states that the tax administration, for purposes of computing the statutory margins for the import and export RP and cost plus methods, will take into consideration economic analysis by industry sector, branch of activity and based on the current economic situation. Adjustment will be allowed when the economic circumstances necessitate adjustment. This flexibility is different from the Brazilian rules, which provide fixed margins for all economic activities unless the taxpayer establishes a different margin with data from official publications or research carried out by a qualified firm.