Bolivia, although not an OECD or EU member, has adopted a tax regime based on OECD Guidelines for transfer pricing. This framework primarily concerns commercial and financial transactions between related companies for Corporate Income Tax (CIT) purposes.
Entities in Bolivia are considered related parties in several scenarios, including ownership influence, business activities in low-tax regions, or cross-border branch/affiliate operations.
Taxpayers are obligated to provide transfer pricing documentation in Bolivia, including a Transfer Pricing study for transactions exceeding BOB 15 million. For transactions exceeding BOB 7.5 million, a sworn statement (Form 601) is required, and documentation demonstrating arm’s length transactions for transactions under BOB 7.5 million.
Bolivia’s methods for transfer pricing, including Comparable Uncontrolled Price, Resale Price, Cost-Plus, Profit Split, and Transactional Net Margin, are aligned with OECD standards. A benchmark study can use both domestic and foreign comparables to determine the arm’s length range.
Transfer pricing documentation should be submitted within four months after the close of the fiscal year. Various deadlines apply to different types of businesses. Penalties for non-compliance can result in fines or even imprisonment for tax evasion.