The National Tax Authority of Colombia announced on sale transactions of intangibles subject to the transfer pricing regime. In article 260-1 of the Tax Code provides criteria for ascertaining whether two or more parties are related parties and the present legislation provides that if the following requirements are complied with, the transaction is subject to the transfer pricing regime:
- an income taxpayer carries out the transaction;
- there are overseas parties related to the Colombian income taxpayer; and
- Colombian income taxpayer carries out the transaction with the overseas related parties.
According to the National Tax Authority, as long as the sale of an intangible complies with the mentioned requirements, it will be subject to the transfer pricing regime; thus, any income, cost or deduction derived from the transaction will be determined according to the arm’s length principle for income tax purposes.
