Legal Bulletin



Application of International Financial Reporting Standards – IFRS for the transfer pricing regime.

DIAN Revenue Ruling no. 1399 of February 5 of 2016


Article 165 of Law 1607 of 2012 includes two conditions for the application of COL – GAAP in the 4 years of entrance into force of IFRS:

  1. That the tax provision contains a remission, express or implied, to an accounting provision.
  2. That through that remission, a tax basis is determined.

DIAN said that although Section 260-3 includes the first condition, it does not include the second one. The remission at fist level makes reference to the use of accounting information with the objective of comparing it with independent parties, in accordance with the comparability criteria of the arm’s length principle. In a second level, in the event of not complying with the prices or profit margins this implies an adjustment on the median, which affects the tax burden of the taxpayer.

In this sense, DIAN established that the price or profit margin in operations with related parties considering the Transfer Pricing Regime, will be determined from the date of effective application of the new accountability frames for both public and private sectors, without retroactivity.