Meet your tax obligations for related-party transactions with technical documentation, defensible analysis, and specialized support.
What Your Company Needs to Keep in Mind in El Salvador
Tax Authority
Compliance with transfer pricing regulations is reviewed by the Ministry of Finance through the General Directorate of Internal Taxes.
Companies with transactions between related parties may be required to file Form F-982 and must have supporting documentation to substantiate their analysis of market prices.
Key Obligations
A lack of technical support may result in fines, adjustments to income tax, denial of deductions, or increased exposure to tax audits.
Noncompliance Risks
For the immediately preceding fiscal year, the main compliance deadline in El Salvador is:
March 31: Filing of Form F-982 for the prior tax year.
The Technical Report must be prepared as supporting documentation in the event of a request from the tax authority.
Functional analysis of roles, assets, and risks.
Benchmarking or comparability analysis, where applicable.
Identification of the related parties involved.
Financial information regarding the taxpayer and the transactions analyzed.
Elements that typically form part of the analysis
In El Salvador, taxpayers conducting transactions with related parties must demonstrate that the agreed-upon prices, values, or amounts correspond to market conditions comparable to those between independent parties.
Transfer pricing documentation helps substantiate the reasonableness of intercompany transactions, supports compliance with Form F-982, and provides technical evidence in the event of potential requests from the General Directorate of Internal Revenue.
Compliance in El Salvador requires demonstrating arm’s-length prices in related-party transactions
Selection of the applicable transfer pricing method.
Description of the intercompany transactions carried out.
Review of contracts, invoices, and supporting documentation.
Conclusion regarding compliance with the arm’s-length principle.
Download the Transfer Pricing Compliance Roadmap for El Salvador
View in a single document the key steps, dates, and obligations your company must review to properly comply with Salvadoran regulations.
Before ensuring compliance in El Salvador, check to see if you have:
Clear identification of transactions with related parties.
A review of the applicable threshold for filing Form F-982.
Contracts, invoices, and supporting documentation for the transactions.
A functional analysis of the entities involved.
Up-to-date and segmented financial information.
Benchmarking or comparability analysis, when applicable.
Consistency between intercompany policy and the group’s actual operations.
Technical study prepared in the event it is requested by the authorities.
Leaders in Transfer Pricing Advisory Services in Latin America
Our team can assist you in reviewing, preparing, or strengthening your transfer pricing documentation in El Salvador, taking into account local regulations and your business group’s actual operations.
Local Documentation
Benchmarking
Review of Intercompany Policies
Support during audits or in response to regulatory requests
We assist business groups with operations in various countries across the region, combining local compliance, a regional perspective, and specialized technical support.
+1,200
Annual Studies
Why Choose Grupo Consultor EFE® for Your Transfer Pricing Compliance
Experience in documenting and analyzing intercompany transactions.
+600
clients
Support for local businesses, business groups, and companies with international operations.
Support in El Salvador and other Latin American countries for companies with multinational structures.
Integrated approach
Local + Regional
Technical + Strategic
Differentiated
Documentation prepared to comply with, support, and defend the transaction during audits.
At Grupo Consultor EFE®, we understand that transfer pricing compliance is not merely a tax obligation. It can also serve as a tool to strengthen decision-making, assess the efficiency of intercompany transactions, and anticipate risks in an increasingly regulated environment.
The support they provide throughout the entire process is consistent and highly responsive. Their commitment to completing each stage is evident, as is the high level of professionalism with which they approach every project. Their approach builds trust from the start, and the results clearly reflect their serious and responsible approach. The way they engage and deliver on their promises is truly exemplary.
Companies That Have Placed Their Trust in Us
Real results from business groups that demonstrate their compliance with our technical support.
Rosa Delia Silva Pineda
Flextronics
"
Working with your team has been a positive experience from start to finish. From our very first contact, they demonstrated a high level of professionalism, attention to detail, and clarity in communication. The results we achieved were fully in line with our expectations, which confirms the quality and effectiveness of your services.
Argentina Hidalgo
EMASAL Group
"
It was my first time working on transfer pricing; the support and follow-up were excellent and appropriate. At our corporate office in San Diego, we were asked to conduct a transfer pricing study; previously, our company’s accounting was handled by an external firm, and they were the ones who recommended Grupo Consultor EFE® to us.
Pablo Rafael Xep
CPS
"
Transfer pricing regulations in El Salvador are primarily set forth in the Tax Code, following the reforms introduced by Legislative Decree No. 233. These provisions establish obligations for taxpayers who conduct transactions with related parties or with entities located in countries, states, or territories with preferential tax regimes, low or zero taxation, or tax havens.
The regulatory framework requires that intercompany transactions be priced at arm’s length, that supporting documentation be maintained, and that the relevant information be disclosed when the taxpayer falls under the applicable provisions.
Transfer Pricing Laws in El Salvador
Legislative Decree No. 233 incorporated the regulatory framework applicable to transfer pricing into the Salvadoran Tax Code. Among the relevant provisions are Article 62-A, concerning the obligation to price transactions with related parties at arm’s length; Article 199-B, on arm’s-length pricing; and Article 199-C, regarding the definition of related parties.
Additionally, the General Directorate of Internal Taxes issued the General Guidance Manual to facilitate the determination of transfer pricing, in accordance with the provisions of Article 62-A of the Tax Code and other applicable provisions.
Applicable Legislation in El Salvador
Definition of a Related Party in El Salvador
In El Salvador, a relationship between parties is deemed to exist when one person directly or indirectly directs, controls, or holds a significant interest in the capital stock or voting rights of another, or when a small group of people directs, controls, or holds an interest in both entities.
A relationship may also exist when companies are part of the same decision-making unit or business group, when there are exclusive distributors or agents, permanent establishments, parent companies, foreign suppliers with significant operations, or contractual structures in which one party has a significant interest in the results.
Proper identification of related parties is essential to determine whether there is an obligation to analyze, document, and file Form F-982.
Informative Return in El Salvador
Taxpayers who conduct transactions with related parties or with parties domiciled, incorporated, or located in countries, states, or territories with preferential tax regimes, low or zero taxation, or tax havens may be required to file the Report on Transactions with Related Parties, Form F-982.
This obligation applies when the transactions, individually or in the aggregate, are equal to or exceed the threshold established by applicable regulations.
Reference Date:
March 31: Filing of Form F-982 for taxpayers with a calendar fiscal year.
Supporting Documentation
Article 62-A of the Tax Code establishes that taxpayers who enter into transactions with related parties must determine the prices and amounts of consideration by considering market prices used in comparable transactions between independent parties.
Supporting documentation may include an executive summary, functional analysis, market analysis, economic analysis, financial information, contracts, invoices, comparables, the selected method, and technical conclusions that support the reasonableness of the transactions.
Retention and Submission of the Transfer Pricing Study
The documentation, information, and evidence supporting that the taxpayer considered market prices in its transactions must be maintained in good order and condition for the period specified by the Tax Code.
The submission of supporting documentation regarding transfer pricing is subject to request by the Tax Administration; therefore, the Technical Study must be prepared for submission upon request.
Language of the Documentation
Transfer pricing documentation must be submitted in Spanish, in accordance with the provisions of the Tax Code.
In El Salvador, there are no special provisions for small and medium-sized entities regarding transfer pricing. Taxpayers who conduct transactions with related parties or with entities located in preferential tax regimes, low- or zero-tax jurisdictions, or tax havens must ensure that such transactions are conducted at arm’s-length prices when the applicable conditions are met.
In El Salvador, the substantive tax liability prescribes after ten years, while the Tax Administration’s powers of audit, inspection, investigation, and control expire in accordance with the time limits set forth in the Tax Code.
Salvadoran regulations provide for various methods to assess whether transactions between related parties are conducted at arm’s length.
Accepted Methods:
The selection of the method should take into account the nature of the transaction, the availability of comparable information, the functions performed, the assets used, and the risks assumed by the parties involved.
To determine whether goods or services are priced at market rates, the relevant economic characteristics of the transactions carried out by the taxpayer must be compared with transactions between independent parties.
The analysis may consider characteristics of the goods or services, functions performed, assets used, risks assumed, contractual terms, economic circumstances, and business strategies. When there are relevant differences that significantly affect the price or consideration, these must be eliminated through reasonable adjustments that improve the degree of comparability.
Currently, the El Salvador Tax Administration has not considered implementing BEPS measures within the transfer pricing regulatory framework.
Failure to comply with transfer pricing reporting and documentation obligations may result in fines, income tax adjustments, disallowance of deductions, interest charges, and increased exposure to tax audits.
The regulations provide for penalties for failing to file, filing late, or submitting the Report on Transactions with Related Parties or with parties located in preferential tax regimes, low- or zero-tax jurisdictions, or tax havens without the required specifications.
Check your company’s compliance in El Salvador
Schedule a consultation with our team to find out if your related-party transactions have the necessary technical support to ensure full compliance in El Salvador.
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