Worldwide transfer pricing reference guide 2014

Uruguay (continued)
Documentation deadlines
The income tax return is due within four months of the close of the fiscal year end. In that filing, the company must disclose whether
or not a transfer pricing adjustment is required to achieve an arm’s length result in its transactions with both related parties and
unrelated parties located in tax havens. In such cases, the transfer pricing analysis should be performed by that time, even though the
documentation is not due until nine months after the fiscal year-end.
The deadline for providing the required documentation is nine months after the end of the fiscal year if:
• The transfer pricing annual return (Form 3001), including detailed information regarding all cross-border intercompany transactions and
all transactions with unrelated entities located in tax havens has been filed
Transfer pricing study (Regs. 2.084/009) is to be filed along with Form 3001.
Statute of limitations on transfer pricing assessments
There is no specific statute of limitations for transfer pricing adjustments; rather, the general regime applies. Assessments can be raised
five years after the company’s accounting period ends, but this is extended to 10 years where the difference is due to fraudulent or
negligent conduct by the taxpayer.
Return disclosures/related party disclosures
Taxpayers are required to file:
• The transfer pricing study, including the key elements such as the functions and activities of the company, risks and assets used, the
methods used, the interquartile range, details of the comparables, etc.
• Annual tax return Form 3001
Transfer pricing-specific returns
Only those taxpayers who are obliged to file the transfer pricing study must file the transfer pricing annual return (Form 3001) to the tax
authorities.
In that annual return, the company must provide information about the related party transactions.
Frequency of tax audit and transfer pricing scrutiny by the tax authority
The likelihood of an annual tax audit in general is medium, while the likelihood that transfer pricing will be reviewed as part of that audit
is high. The likelihood that, if transfer pricing is reviewed as part of the audit, the transfer pricing methodology will be challenged is high.
Transfer pricing practice is new in Uruguay; therefore, there isn’t a lot of background on audit practices. However, in the cases known,
the taxing authority has challenged the methodology and the company’s comparable set.
The tax authority relies on a special team of professionals who have focused on performing tax audits for the biggest companies known
as “Great Taxpayers.” However, they have not focused on specific industries.
The focus is mainly on:
• Functional analysis
• Segmentation criteria revision
• Comparison between the financial information of the company considered for the transfer pricing analysis and the financial statements,
identifying internal and external comparables
General observations pointed out at inspections are:
• Comparability adjustments made to the tasted party
• Rejection of the selected comparables companies
• Observations of companies which make continuous losses for many years
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