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Chile Import Regs.: Transfer Pricing

Regulations of Chile for special products, prohibitions, restrictions, labeling, documentation, etc.

Chile Import Regs.: Transfer Pricing

Postby bridgat » Tue Nov 18, 2008 3:38 am

On July 6, 1999, the Chilean National Customs Service issued a resolution requiring certain importers, as of August 2, 1999, to file a "Sworn Declaration of Value" together with supporting documents, for all transactions involving the importation of new goods that have a value greater than US $5,000 FOB.

As we understand, the purpose of the declaration is to help determine whether an "arms-length" price is being used in international transactions involving related parties. If the transaction involves related parties, the reported price of the import transaction may be ignored and a price can be applied by the customs authorities based on the transaction value for similar goods involving unrelated parties or by other criteria deemed reasonable by the GOC authorities.

A "non-arms-length transaction" exists, if an importer and exporter fall within any of the following situations:

a) if one party carries out responsibilities for the other party's business;
b) if there is a legally recognized connection, such as a business partnership;
c) if there is an employee-employer relationship;
d) if one party has, directly or indirectly, the ownership, control or possession of 5 percent or more of the outstanding stock or bonds;
e) if one party's business is controlled, directly or indirectly, by the other party;
f) if both parties are controlled directly or indirectly by the same third party;
g) if both parties control a third entity;
h) if both parties are members of the same family.

The importer is also required to state on the document whether territorial or other restrictions apply to the resale of the goods and whether any sales commissions have been included in the declared price.
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