Although there are no specific transfer pricing elements in the new political constitution, the success at a referendum late last month will mean the tax administration will start developing long-term plans to enforce several reforms that have been included in the tax regulations in recent months.

“It is a political calculation being made by the administration, because they were unsure about the support they could reach in case the referendum would be contrary to the government expectations,” said Alexis Carrera, senior manager at Ernst & Young. “The outcome [of the referendum] will re-start several procedures that were on hold for political support, which the government reached with the referendum.”

“As an example, last Monday [September 22], several companies received notifications from the tax administration regarding the failure to present the TP annex, which is a piece of information containing a summary of related party transactions held during the last fiscal year,” she continued. “This Annex had to be presented in April, but it took until yesterday for the Administration to start notifying companies about the start of a sanction procedure for all those companies failing to present this information.”

This development will have some implication for the taxpayers in the region.
“They must expect stronger enforcement of the regulations,” said Carrera.