Thursday, August 8, 2019
Authorities in Ecuador have worked with a number of international organization to develop a new framework to detect potential cases of transfer pricing abuse.
In a new document, prepared by the German Society for International Cooperation, Ecuador's Internal Revenue Service, the United Nations, and the Intra-American Center of Tax Administrations, the organizations set out how Ecuador has introduced a basic risk detection system, which Ecuador intends to gradually enhance.
Ecuador's regional peers are being encouraged to replicate the regime.
According to the paper, the authorities have focused on related-party transactions from 2012 and 2017 and is using Artificial Intelligence and numerous risk analysis models to assign a risk score to taxpayers. Officials will focus enforcement activities on those enterprises assigned the highest risk ratings.
The document has been published online by the Intra-American Center of Tax Administrations in Spanish. It said an English language version will be available shortly.