Do you have an international company? What Is Transfer Pricing and Why Does It Matter?

Transfer pricing refers to the prices set for goods, services, or financing exchanged between related parties within the same multinational group. These prices must be comparable to those that would be charged between independent companies, following the arm’s length principle.

Proper transfer pricing helps:

• Avoid base erosion and profit shifting across tax jurisdictions.

• Stay compliant and prevent tax penalties.

• Ensure transparency with tax authorities.

🌎 Transfer Pricing Regulations by Country

🇺🇸 United States

Governing rules:

• Internal Revenue Code (IRC) §1.482

• Treasury Regulations §1.6662-6 (penalties for non-compliance)

Regulatory authority:

• Internal Revenue Service (IRS)

Key obligations:

• Contemporaneous documentation is required for cross-border related-party transactions.

• Relevant forms: 5471, 5472, or 8865, depending on entity structure.

• Form 8975 (Country-by-Country Report) required if global revenue exceeds $850 million USD.

🇨🇱 Chile

Governing rules:

• Article 41 E of the Chilean Income Tax Law

• SII Resolution No. 126/2022

Regulatory authority:

• Servicio de Impuestos Internos (SII)

Key obligations:

• Form 1907 must be filed for related-party transactions.

• Transfer pricing study required if total related-party transactions exceed CLP $500 million in a tax year.

• If no major changes occurred, prior studies may be reused with updated economic data.

🇲🇽 Mexico

Governing rules:

• Articles 179 and 180 of the Mexican Income Tax Law

• CFF Regulations

• SAT’s Transfer Pricing Guide

Regulatory authority:

• Servicio de Administración Tributaria (SAT)

Key obligations:

• Local and master file documentation required for taxpayers with annual income exceeding MXN $894 million.

• Must file reports such as Annex 9 and DIEMSE.

• Must use accepted transfer pricing methods and include robust economic analysis.

🇻🇪 Venezuela

Governing rules:

• Articles 109 to 113 of the Income Tax Law

• SENIAT Ruling SNAT/2003/2424

Regulatory authority:

• Servicio Nacional Integrado de Administración Aduanera y Tributaria (SENIAT)

Key obligations:

• Must file a transfer pricing informative return if related-party cross-border transactions exist.

• Transfer pricing study is mandatory and must apply the arm’s length principle.

• OECD-based methods are accepted, adapted to the local context.

Transfer pricing compliance is not optional—it’s a legal requirement in most countries. Ensure you have proper documentation and a reliable economic study to reduce tax risks and stay audit-ready.

Need Help with Transfer Pricing?

At ProfitMAS, we specialize in international tax compliance. If your business conducts intercompany transactions, we help you meet all local transfer pricing requirements, avoid fines, and optimize your tax structure.

💼 Services available in the U.S., Chile, Mexico, and Venezuela 📄 Tailored documentation based on each country’s laws 🛡️ Economic analysis, comparables, and full technical reports

👉 Book your free consultation today and stay ahead of tax audits. 📩 Email us at info@profitmas.com 🌐 Visit www.profitmas.com