Latin America in Focus — July 2015

Featured topic

Shared services centers in Latin America

By incorporating a tax perspective into shared services center strategies, businesses can unlock new benefits, help manage tax risk for the enterprise and align business objectives with long-term organizational goals. This article summarizes some of the latest integration trends, evaluation and assessment views, and tax incentive regime updates. Find out more.

Bahamas

Value added tax introduced

Value added tax (VAT) was introduced on 1 January 2015. All goods and services that are specifically stated as “exempt” in the VAT Act are considered taxable. The VAT registration threshold is BSD 100,000 and voluntary registration is allowed for businesses that do not meet the BSD 100,000 threshold.

Read more about the Bahamas highlights, which provides an overview of the tax system.

Bolivia

Ruling issued on transfer pricing documentation requirements

A new ruling sets out the requirements for corporate taxpayers to prepare and file a transfer pricing study and/or complete an information reporting form for transactions with related parties.

Brazil

Social contribution on net profits increased

Learn more about a new provisional measure that will take effect on 1 September 2015, increasing the rate of the social contribution on net profits for financial institutions from 15% to 20%. 

PIS/COFINS exemption on certain financial income reinstated

The Brazilian government enacted a decree on 20 May 2015 that reinstates the exemption from PIS/COFINS (social security contributions on revenue) on certain financial income arising from the fluctuation of foreign exchange rates.

Brazil ECF

Brazil’s previous corporate income tax return (known as the DIPJ) has been replaced by a new reporting obligation called the Tax and Accounting Information Disclosure (ECF).

Chile

New rules on taxation of foreign passive income

A controlled foreign company regime has been introduced to regulate passive income earned by Chilean companies abroad. Find out more.

Colombia

Loss carryforwards can affect CREE taxable base

Colombia’s Constitutional Court has affirmed the constitutionality of the provision used to calculate the tax base for the income tax for equality (CREE), which applies in addition to the corporate income tax. Find out more.

Calculation of tax basis during IFRS transition period clarified

Colombia’s tax authorities issued a legal opinion on 5 June 2015 that sets out the legal framework to apply a decree issued in 2014 that implements legislation relating to the gradual implementation of International Financial Reporting Standards in Colombia.

Expert commission releases first report on tax system

On 4 June 2015, Colombia’s Ministry of Finance published the first report of the Commission for Tax Equality and Competitiveness (Commission), which was formed to assess the existing tax system and to propose appropriate changes. 

Costa Rica

Transition period for imposition of withholding tax on payments abroad expires

A six-month transition period that delayed the application of new withholding tax rules in Costa Rica expired on 28 May 2015.

Mexico

Competitiveness: Catching the next wave

Deloitte’s latest competitiveness report examines the key sectors that will fuel Mexico’s “next wave” of growth over the next 25 years.

New administrative rules published 

New administrative rules published in Mexico’s official gazette update the list of EOI countries, address maquiladoras, and clarify provisions regarding information returns that were due on 30 June 2015.

Peru

Mandatory e-invoicing to apply

Certain companies were required to implement an e-invoicing system linked to Peru’s tax authorities´ database by 1 July 2015. A second group of companies will be subject to this requirement by 31 December 2015. 

Deemed dividend rule for “credit” granted to shareholders has been modified

Peru’s government has issued regulations that further amend the deemed dividend rules in the 2014 tax reform.