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 and The Caribbean region covers:
- 7,949,380 square miles
- 33 sovereign countries
- 17 dependent states
It’s a vast territory, incredibly diverse region but with lots of commonality. Emerging markets have reached critical mass levels, continually growing in spite of challenges and political uncertainty. Influences are changing and so should your view of the region, in reverse polarity as per above globe image. It always a matter of perspective.
Below is a brief insight as an update on some of key countries’ latest developments with consequences for the region’s tax business environment—developments that businesses and individuals with investments in Latin America cannot afford to ignore.
- Argentina
A major overhaul of Argentina’s tax system that generally applies as from 1 January 2018 includes changes that affect the taxation of both residents and nonresidents. - Brazil
New tax treatment of certain oil and gas activities converted into law: A provisional measure on the new tax treatment of certain oil and gas activities in Brazil was converted into law and published in the official gazette on 28 December 2017. Also, CbC reporting requirements for exchange relationships activated after 2017. The tax authorities have introduced CbC reporting obligations in Brazil. - Colombia
New tax treaty signed with UAE: The governments of Colombia and the United Arab Emirates have signed a tax treaty, and commercial and investment protection agreements. - Costa Rica
Incentives for electric vehicles enacted: Costa Rica enacted a law on 25 January 2018 that introduces incentives for electric vehicles to encourage the use of cleaner technologies to protect the environment. - Mexico
New rules introduced on dissolution and winding up of companies: A decree published in Mexico’s official gazette on 24 January 2018 amends several provisions of the General Law on Commercial Companies relating to the procedure for the dissolution / winding up of companies. Lack of business purpose as factor in determining sham transactions: A Mexican court has ruled that the tax authorities can take into account the fact that a transaction lacks a business purpose where the authorities discover during a tax audit that the transaction is not reflected in the taxpayers accounting books. - Peru
New transfer pricing reporting obligations clarified: A decree amends Peru’s income tax legislation and provides guidance on new formal transfer pricing documentation requirements.
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