Update On Costa Rica's Regulation For Annual Transfer Pricing

Earlier this month, the Costa Rican General Direction of Taxation (DGT or Dirección General de Tributación, in Spanish) released draft rules for annual transfer pricing for public consultation. Originally enacted in 2013, Decree 37898-H protects the principle of 'free competition'.

Costa Rica's transfer pricing rules follow guidelines set by the Organization for Economic Cooperation and Development (OECD), which require taxpayers to apply the following transfer pricing methods:

• comparable uncontrolled price method
• resale price method
• cost plus method
• profit split method, and
• transactional net margin method

The filing requirements are applicable to individuals and business entities that conduct intercompany transactions and fit into one of the following categories: