The control of transfer pricing manipulation in Latin America and the Caribbean

Transfer pricing legislations are a tax control measure for preventing the abusive manipulation of prices between related companies. They aid in tax administrations' search for the fair portion of revenues obtained from multinational transactions and accordingly, the respective tax payment.

The Latin American tax administrations have a great interest in transfer pricing. This is evidenced by the fact that, of the twenty countries of the region, fourteen have regulation for preventing the manipulation of transfer pricing (Argentina, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Peru, Uruguay and Venezuela). Likewise, Nicaragua and Paraguay are working in projects for introducing transfer pricing regulations. This leads us to conclude that approximately 85% of the Latin American countries have attributed importance and are working in developing this tax control measure.