• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/24/2014

Uruguay - Transfer pricing implications for branch’s financial operations  

July 24: The tax administration (DGI) issued guidance to address the tax treatment—and transfer pricing implications—of financial transactions between a Uruguayan branch and its foreign parent company and related foreign subsidiaries, when these are the only transactions between the entities.

Consultation N ° 5,795 considers both the income tax and transfer pricing aspects of such financial transactions.

In general, amounts resulting from such financial transactions between the permanent establishment (PE) of a non-resident entity and that foreign entity will be considered to be capital accounts.

Regarding the transfer pricing aspects of such financial transactions, the arm’s length principle applies—i.e., the price charged in transactions between related companies does not differ from the price that would have been charged in similar transactions between independent entities. In the case of financial transactions, the “price” consists of accrued interest.

Read a July 2014 report (Spanish) prepared by the KPMG member firm in Uruguay: Monitor Semanal

Contact a tax professional with KPMG's Global Transfer Pricing Services.

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