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The transfer pricing restructuring refers to the change in assets, functions or risks assumed by a local company that affects the relationship with its related or related parties. Until before COVID-19, many of the restructurings had been carried out to take advantage of synergies within a group or to reduce costs in carrying out an activity, as well as to transfer and centralize intangible assets. "The OECD Guidelines applicable to Transfer Pricing to multinational companies and tax administrations" address this topic in Chapter 9.

In current circumstances, as part of generating income or preventing the loss from being greater, companies should evaluate the option of restructuring their operation. This restructuring will affect relations with its related parties; however, it will not be as a consequence of group planning.

The importance of considering what should be had in a restructuring scenario is due to the fact that, in the absence of information from a profit redistribution analysis, the possibility of retribution could be raised in this change. As noted, in current circumstances the need starts from not having greater losses or even disappearing. All these elements must be documented. It should be noted that the transfer pricing analysis also applies to post-restructuring operations.

Some of the elements to consider are:

  • Demonstrate the economic reasons that led to the restructuring, for which it is useful to have an analysis of the business result and projections of not making the changes, economic circumstances, among other elements, to justify the decisions of the change in the way to operate. It is important to consider that, in times of pandemic, the use of virtual channels, both to work and to access the market, are essential to continue with the operation.
  • Analysis of the change in conditions and implications for assets, functions and risks. These changes must have the analysis of the impact on the result of the operation.
  • How the valuation of related party transactions is determined from the change. These operations are also subject to the transfer pricing regime and the application of the five methods established in the Regulations for the application of the Internal Tax Regime Law.
  • In the event that this restructuring involves the change in intangible assets, the only argument for the definition of the price is a financial valuation analysis, which includes the current assumptions and conditions.

It is important that those in charge of the financial areas consider within the action plan for this year, full of challenges, the aspects briefly addressed and that will depend on each industry.


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