The registration of agreements for Commodity Transactions with related parties is regulated.
To carry out the Transfer Pricing analysis of these operations by applying the Uncontrolled Comparable Price (NCCP) method, it is possible to take as a reference the operations carried out with independent third parties or previously made quotes. One of the most important information elements to apply the PCNC method in commodity transactions is the date of the operation. With Resolution 67 of June 24, 2020 published in the Official Gazette 51,355, the procedure for registering commodity contracts is regulated in order to demonstrate the date of the contract and establishes deadlines to do so.
To demonstrate the accuracy of the date of the agreement with the related party, the taxpayer must register the contract either within the calendar month following its signing or before the first delivery, whichever occurs first. In case of modifications to the contract, it must be registered again within the calendar month following the modification date, provided that the initial contract has been registered.
In accordance with article 188.8.131.52.4.1. of Decree 1625, the information that must be registered regarding the agreements (contracts, offers and acceptances or other documents that establish the terms, and that can constitute a reliable proof), is the following:
- Identification of the parties involved: name or company name, identification and country of domicile and/or fiscal residence.
- Document Type: Contract, offer and acceptance, or other documents setting out the terms of the agreement.
- Subscription date.
- Validity: start and end dates.
- Commodity pricing date for each hedged transaction.
- Type and description of the commodity: including the characteristics, quality and object of the covered transactions.
- Agreed volumes: identifying the unit of measure.
- Delivery terms and conditions: including information related to International Trade Terms (Incoterms), type of transport, port of departure, port of delivery, insurance, among others.
- Commodity agreed price: value of the fixed price or if it is a variable price, indicate the fixing formula, describing in detail each of the variables that make up said formula.
- Others that affect the price: all those clauses agreed in the transaction that affect the final price of the commodity and that are not considered within the formula indicated in the previous numeral.
- Type of currency under which the agreement was agreed.
On the other hand, the transitory paragraph of Resolution 27 indicates that the taxpayer must declare at least points 1, 4, 5, 6 and 9 indicated in the previous list.
According to a press release from the DIAN, it was reported that as of August 3, 2020, the computer system is enabled for a period of three (3) months, in order to verify its functionality; where the taxpayer may register the agreements.
As of November 4, the end of the month referred to in the transitory paragraph of article 184.108.40.206.4.1 will begin. of Decree 1625 of 2016, the Only Regulatory Tax Matter.
To see the complete registration manual for these contracts, click on the following link: Commodity Agreement Registration Manual Presentation.
TP Consulting Colombia
Global Knowledge Applied to Local Reality