The resolution, which was released in conjunction with the Ministry of Finance, addresses aspects of October’s regulations that needed clarification.

Associated enterprise is one area of the country’s regulations that is addressed in the resolution. The resolution provides an in-depth description of the circumstances under which a company will be deemed a related party. It states that if one party participates in 10% or more of the investment capital of the other party, they will be considered associated enterprises.

Further details on documentation requirements were also outlined. The resolution states that large enterprises must submit information to the tax bureau if they are included in the bureau’s large taxpayers division, performing operations subject to the transfer pricing regime that are more than $1 million annually or if they have been notified by the bureau on a case by case basis.

The documents must contain details of functions, assets and risks of the tested party, details and amount of the operations subject to analysis, identification of intercompany transactions, methods selected and the reason of rejection of the others, comparables used, median and inter-quartile range determination for the set of comparables selected and any other conclusions.

Taxpayers will also have to keep the above documents for a minimum period of five years and must be filed within nine months from the fiscal year ending.

Despite clarifying a number of points, the resolution still failed to address the distinction between operations with related parties or independent parties for import and export activities.