In accordance with the Regulatory Decree 3030 of December 2013, there is an economic link between the parties if the transaction is between a branch and home office, a transaction involving a permanent establishments, a related party transaction made between third parties, a transaction between related parties through a joint venture agreement or other collaborative agreement, or a transaction between a taxpayer and a party situated in a free trade zone in Colombia. Cost contributions or cost sharing arrangements must comply with the arm’s length principle. Segmented data may be used but if this is used it must be certified by an independent accountant, auditor or the equivalent. Taxpayers may however use other statistical measures, including the whole range, to determine the arm’s length price. If the interquartile range is used this must be justified in the transfer pricing documentation.
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