On 21 March 2018, the General Directorate of Internal Taxes of the Ministry of Finance issued the Transfer Pricing Orientation Guide (DG-001/2018).
These guideline is intended to help taxpayers to comply with the following legal obligations:
- The determination of transfer prices in transactions carried out with (i) related parties or (ii) with persons domiciled, constituted or located in countries, states or territories with a policy of low or no taxation.
- The presentation of a report with the Transfer Pricing transactions.
- The conservation of the documentation related to Transfer Pricing transactions.
- Tax withholdings in the Transfer Pricing transactions.
- Identification of nondeductible costs and expenses related to Transfer Pricing transaction to determine net income of tax payer.
- The auditors’ settlement in its fiscal report that the Transfer Pricing transactions are in compliance with the tax regulations.
- Examples relating to points 1-6, mentioned above.
The Guideline was developed in response to the amendment of article 62-A of the Salvadoran Tax Code (1) effective since 2014 and replaces the previous guidelines DG-001/2012 from March 2012.
