Transfer Pricing
Country Summary
Costa Rica

This document summarizes the transfer pricing requirements and regulations in Costa Rica. Costa Rica has established formal transfer pricing documentation requirements since 2017, including master files, country-by-country reporting, and local files. It became an OECD member in May 2021, although its tax law does not directly reference the OECD Transfer Pricing Guidelines. Transfer pricing studies have been mandatory for Costa Rican taxpayers since 2013, and they have adopted the three-tiered documentation suggested in the BEPS report. Costa Rica has specific criteria for determining related parties and requires large taxpayers and companies engaged in cross-border related party transactions to prepare a master file and local file, which must be available upon request. The language for transfer pricing documentation should be in Spanish.


Costa Rica’s Transfer Pricing Regulations

In 2017, Costa Rica introduced formal transfer pricing documentation requirements, bringing its practices in line with OECD guidelines. Despite becoming an OECD member in 2021, the country’s tax laws do not explicitly mention OECD Transfer Pricing Guidelines. Nevertheless, Costa Rican regulations follow the arm’s length principle and impose systematic transfer pricing duties, including comprehensive documentation that aligns with OECD recommendations.

Defining Related Parties

Costa Rica’s Income Tax Law lays out criteria for determining related parties and related party transactions. Various scenarios, from capital ownership to unity of decision-making, determine related party status. Additionally, the law considers tax havens as potential factors indicating related party transactions.

Transfer Pricing Documentation

Costa Rica’s transfer pricing requirements apply to large taxpayers and companies engaged in cross-border related party transactions. While there are no specific filing deadlines, companies must prepare master files and local files, which closely resemble OECD standards, and have them available for tax authorities upon request.

Advance Pricing Agreements and Audits

Taxpayers can request advance pricing agreements, but disagreements with tax authorities are non-appealable. Costa Rican tax authorities may perform transfer pricing audits to ensure transactions with related parties adhere to arm’s length principles.

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