Worldwide transfer pricing reference guide 2014

Honduras
Taxing authority and tax law
Taxing authority: Tax Administration of Honduras (Dirección Ejecutiva de Ingresos, or DEI).
Tax law: Decree No. 232–2011, Articles 1 to 22.
Relevant regulations and rulings
Transfer Pricing Law (Decree No. 232–2011) establishes the regulations applicable to individuals or business entities that have related
party transactions in Honduras.
Honduran transfer pricing provisions are mainly based on the OECD Guidelines and apply to all the transactions conducted by Honduran
taxpayers with related entities resident abroad and with entities operating under a special tax regime in Honduras. The regulations also
apply to transactions conducted by taxpayers with entities domiciled in tax havens.
Decree 232–2011 also includes an additional non–OECD method (the export valuation method), which is intended to be used for
transactions involving goods with well-known prices in transparent markets.
Transfer Pricing Law will come into force on January 1 2014.
OECD Guidelines treatment
Honduras is not an OECD member, and there is no reference to the OECD Guidelines in the Decree 232–2011. However, local regulations
generally follow the OECD standard.
Priorities/pricing methods
The provisions require the application of the most appropriate transfer pricing method. The specified methods are: CUP, Resale Price,
Cost Plus, Profit Split, TNMM and the export valuation method.
Transfer pricing penalties
If taxpayers fail to provide or provide false, incomplete or inaccurate information under a request from the DEI, a penalty of
US$10,000 applies.
If taxpayers report a taxable income lower than it should have been in arm’s length conditions, a penalty of 15% over the corresponding
adjustment applies.
If taxpayers fail to provide the correct information or fail to declare a correct taxable income, then the penalties will be the greatest of
30% or US$20,000.
If taxpayers fail to comply with any other provision of the Law, a penalty of US$5,000 applies.
Penalty relief
There is currently no penalty regime in place.
Documentation requirements
Contemporaneous transfer pricing documentation regarding related party transactions is mandatory and must be maintained. However,
the current Transfer Pricing Law does not provide the list of information required to be included in the documentation. Further regulation
setting out the general framework required for the support documentation is expected.
Documentation deadlines
Taxpayers are required to document and file information about their transactions with related parties on an annual basis upon filing their
Income Tax Returns. Further regulation setting out time frames and forms is expected.
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