The countries of the Central American region have incorporated and reformed their legislations to the international regulations of Transfer prices and practically all the applicable legal provisions to related parties have already been expanded in the region, which implies, that the companies with regional presence must visualize, review and engage the topic of the determination of prices in the intergroup operations from a comprehensive perspective, under a scope of regional fiscal planning, not only local.

The status of the adoption and application of the rules of Transfer prices in operations performed between related parties in each country of the Central American region are shown below:

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 The tendency in the region has been to integrate the rules of the Transfer prices with the provisions or rules already established for that topic by the Organization for Economic Cooperation and Development (OECD), which none of the countries in the region is a member.

El Salvador is not the exception, and in the last fiscal reform in the month of July 2014 in matter of Transfer prices, it was stipulated in the articles 62-A of the Tax Code, the use of the procedures and technical methods included in the guidelines of the Transfer prices of the OECD. That legal reform opens the path so that the guidelines of an organization like the OECD have application in the operations performed between related parties in our country.

In that manner, it is relevant to have in mind that the recent measures developed by the OECD are focused to establish a series of more rigorous provisions in the operations between related parties. Under this context, the OECD has developed the ¨BEPS Action Plan¨ (Base Erosion and Profit Shifting) which consists of 15 actions. Among those 15 actions is important to highlight the ones that focus on the following topics: digital commerce (action 1), foreign holding companies (action 3), deduction of interests and other financial expenses (action 4), prevention of the abuse of international treaties (action 6), prevention of the artificial evasion of the permanent establishment (action 7), intangibles (action 8), revelation of fixtures of aggressive fiscal planning (action 12), reexamine the documentation of Transfer prices (action 13), development of a multilateral instrument that allows the countries to adhere to an extensive network of treaties (action 15). A manual has been prepared for each of those 15 actions, which are in their finals stages to later be released and put into application. Undoubtedly, the tax authorities of the countries of the region will aim to guide their rules on transfer pricing in the road of the guidelines established by the OECD.

In El Salvador as in the rest of the countries in the region, the tax authorities have begun to aim for audits focused on transfer pricing, in which they for see to have an important tax collection rate, so, it is very important to be dully updated and handle this topic in a preventive manner, establishing coherent and adequate policies for the transfer prices within company groups with regional presence, guaranteeing the tax compliance and avoiding that the companies face lengthy legal processes and continuous audits, with the possibility of tax determination and the imposition of significant fines.