The transfer pricing rules in El Salvador date back to almost a decade ago, with the incorporation in 2009 of Legislative Decree No. 233 which amends the Tax Code of that country by adding articles 62-A, 124-A, 199-B and 199-C.
Article 124-A, specifically, indicates the formal transfer pricing obligations that must be complied with before the Tax Administration by the taxpayers obliged according to the regulation, such as the presentation of a Report of Operations with Related Parties (Form 982) and the conservation of documentation that supports the values agreed in these operations, in a certain fiscal year.
The purpose of this article is to explain the main aspects of the declaration or Report of Transactions with Related Parties in El Salvador.
What is the report of operations with related parties?
It is the affidavit of transfer pricing, stipulated in Article 124-A of the Tax Code of El Salvador.
Who are the taxpayers obligated to file this report?
Those taxpayers domiciled in El Salvador that have carried out operations with related parties or with parties domiciled in tax havens in a given fiscal year, are obliged to file the Report of operations with related parties, provided that:
- The operations indicated above jointly or individually must be equal to or exceed five hundred seventy-one thousand four hundred twenty-nine dollars ($571,429.00).
How do I file the Transactions with Related Parties Report?
The online filing of the report of operations with related parties must be made through Form 982, version 4, which can be found in the web page of the Ministry of Finance by choosing the option “DGII Online Service”.
To do this, you must enter the “Services with Password” and choose the option “Online Declarations and Report”, in this you can choose the “F-982- Operations with Related Parties”.
Likewise, in order to help you file this form, the General Directorate of Internal Taxes-DGII has made available a user’s manual on “Technical Specifications for the Online Filing of the Report on Transactions with Related Parties”.
What is the filing date for Form 982?
According to the final paragraph of article 124 of the Tax Code, Form 982 must be filed within the first three months following the fiscal year to be reported.
What is the penalty for not filing Form 982?
The penalty for not filing Form 982 corresponds to 0.5% of the equity or stockholders’ equity indicated in the Balance Sheet, which cannot be less than 3 minimum wages.