Worldwide transfer pricing reference guide 2014

Colombia (continued)
Penalty relief (continued)
The tax authority has a period of five years from the original date of filing to start an administrative process to impose fines regarding
noncompliance of formal transfer pricing duties.
Transfer pricing adjustments
In the case of transfer pricing adjustments a penalty of up to 160% of the additional tax could be triggered. In case of a
self-assessment or acceptance of the challenges made by the tax authorities, this fine could be decreased to 10%.
Documentation requirements
Taxpayers must prepare supporting documentation proving that each transaction with foreign related parties complies with
the arm’s length principle. The transfer pricing documentation includes a functional analysis (organizational structure, business
description, functions, assets, risks and detailed information of the intercompany transactions, among others), a macroeconomic
analysis, an industry analysis and an economic analysis.
Documentation is not required for transactions that do not exceed US$141.268 for taxable year 2013. Decree 4349 outlines the
information to be included in the transfer pricing documentation.
Documentation deadlines
• Documentation
Documentation should be available to the tax authorities by June 30 of the following fiscal year.
In this regard, Regulatory Decree 1602, issued in July 2012, added the obligation to file the transfer pricing documentation with
the tax authority every year, via its electronic system. The due date is the same for filing both the transfer pricing documentation
and the transfer pricing return.
• Filing returns
Information regarding due dates is not available yet. It is expected that the due dates for documentation and informative return will
be in the month of August.
Statute of limitations on transfer pricing assessments
The general rule for statute of limitations for transfer pricing adjustments is two years. In some cases (losses or set-off of losses), the
statute of limitations is five years.
Return disclosures/related party disclosures
As part of the transfer pricing return, taxpayers must disclose information on related parties, such as if it’s a foreign or local related
party (free trade zone), country of residence and tax ID number.
Other information disclosed on the transfer pricing return includes the type of intercompany transaction, the amount of the
transaction, the transfer pricing methodology applied, the company assessed, the price/margin obtained in the transaction and the
arm’s length range.
It is also necessary to include information regarding comparability adjustments, designation of the tested party, and the amount of
adjustments made on the income tax return, if any and the financial information that was used (segmented or complete information).
Transfer pricing-specific returns
See the return disclosures/related party disclosures section above.
Worldwide transfer pricing reference guide
69