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Latin America in Focus

Staying ahead of cross-border operations

Latin America's emergence as a world market has been, and continues to be, accompanied by an upsurge in the complexity of laws, regulations, and practices impacting cross-border operations throughout the region.

Latin America in Focus shares the latest developments with consequences for the region's tax, legal, and overall business environment—developments that businesses and individuals with investments in Latin America cannot afford to ignore.

Click on any of the headings below to read more about the topic.

Argentina

VAT collection procedures on services provided by nonresidents clarified

New rules that apply as from February 2018 bring the supply of digital content by foreign suppliers within the scope of Argentine VAT, when the services are used in Argentina.

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argentina

Brazil

New tax treaties with Singapore and Switzerland contain BEPS-related measures

The two treaties incorporate measures from the OECD multilateral instrument, even though Brazil has not yet signed the MLI.

Rulings issued on tax treatment of cross-border payments related to travel

Travel-related payments may be treated as business profits under an applicable tax treaty.

State of Sao Paulo issues more guidance on levy of state VAT on software

The tax authorities have released more guidance on the state VAT treatment of “digital goods,” i.e. goods that are generic and commercialized on a large scale.

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Caribbean and Bermuda countries

First CRS reports due in 2018 for non-early adopter jurisdictions

Reporting financial institutions should be completing their due diligence activities, submitting CRS notifications and preparing reports for submission to their tax authorities.

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Chile

Ruling on application of MFN clause in Chile’s tax treaties

The tax authorities have issued guidance on the application of the most-favored nation clause in several of Chile’s existing tax treaties. 

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Chile

Colombia

Colombia, Italy sign tax treaty

The new treaty generally follows the OECD model treaty, and contains some BEPS-type measures.

Deductions may be denied for royalties relating to goods acquired for resale

The legal opinion issued by the tax authorities is designed to prevent taxpayers from receiving a double deduction.

Electronic invoicing to become mandatory for VAT/consumption tax purposes

Effective 1 January 2019, companies that are subject to VAT and consumption tax in Colombia will be required to issue electronic invoices for all transactions for which a paper invoice currently is issued. 

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Costa Rica

Tax reform proposal would replace GST with VAT and tax capital income

A VAT on the supply of goods and all services is slated to be introduced at a standard rate of 13%, along with a couple of reduced rates, and a new 15% tax would be introduced on income from movable capital.

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Mexico

New rules to create presumption of harmful transfer of NOLs

The rules are designed to prevent erosion of the tax base through the transfer of net operating losses.

Amendments to industrial property law issued

Changes to Mexico’s industrial property law that apply as from 25 April 2018 acknowledge the protection of “geographical indicators and introduce an extended period of protection for industrial designs.

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Panama

Transfer pricing information reporting form modified

The new version of the form requests additional information on the taxpayer and each transaction with foreign related parties, as well as comparable transactions/companies used in the transfer pricing analysis.

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Panama

Peru

Withholding on services subject to VAT increased

The tax authorities have published guidance that increases the VAT withholding system percentage applicable to services from 10% to 12.

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peru

Puerto Rico

Draft tax reform bill includes reduction in corporate income tax rate

A draft bill presented on 16 April 2018 would introduce significant changes to the taxation of corporations, including a reduction in the corporate income tax rate.

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Puerto Rico

Contact us

For more information, please contact Americas Tax & Legal.

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Note: Latin America in Focus is not intended to be an inclusive update for all Latin America countries, but rather features key developments in the countries covered.

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