Transfer pricing in El Salvador runs on the Código Tributario's own market-price standard, an annual F-982 report above USD 571,429, and OECD Guidelines that have been persuasive rather than binding since 2019.
Returns and reports are filed through Servicios en Línea DGII (portaldgii.mh.gob.sv) and guidance is published as guías de orientación on mh.gob.sv. Appeals go to a separate tribunal, the TAIIA.
Ministerio de Hacienda — Impuestos / Servicios en Línea DGIITransfer pricing was inserted by Decreto Legislativo No. 233 of 16 December 2009 (D.O. 239, Tomo 385) and applies from tax year 2010. There is no separate transfer pricing statute or regulation.
D.L. No. 233 of 16 Dec 2009; consolidated Código Tributario (Asamblea Legislativa)The statute speaks of the market price used between independent parties for goods or services of the same kind, not of the OECD arm's length principle. Every taxpayer with a related-party or listed-jurisdiction transaction is caught, whatever the size.
Código Tributario, art. 62-A; DGII Guía DG-001/2018, secs. 2 and 6The art. 62-A paragraph requiring OECD lineamientos (added by D.L. 763/2014) was annulled in Inc. 96-2014 and Inc. 126-2014 and never re-enacted, so the DGII must challenge prices under arts. 199-A and 199-B. There is also no OECD transfer pricing country profile for El Salvador — it is not among the 83 published jurisdictions.
Sala de lo Constitucional, Inc. 96-2014 / 126-2014; consolidated Código Tributario annotationsThe tests extend to common decision units, attribution to relatives to the fourth degree of consanguinity, exclusive foreign distributors, foreign suppliers exceeding 50% of purchases, and head office/permanent establishment relationships.
Código Tributario, art. 199-C lits. a)–j)The FY2026 guide was published on 29 September 2025 (Bermuda reclassified, Slovenia and the Comoros removed). Art. 199-D deems listed counterparties not to be independent, so they cannot be comparables, and payments to them bear 25% withholding.
Código Tributario, arts. 62-A and 199-D; DGII Guía de Orientación General FY2026 (29 Sep 2025)DG-001/2018 sec. 4.1 requires the método más adecuado selected after comparability analysis, with no hierarchy binding the taxpayer. Because the guide rests on the annulled second paragraph of art. 62-A, this is administrative practice rather than law in force.
DGII Guía DG-001/2018, sec. 4.1Where more than three suppliers exist, three suffice and their prices are averaged; the audited taxpayer and its related parties may never be used. This is the provision the DGII must apply when it contests a price, and it makes no functional adjustment.
Código Tributario, art. 199-BTransaction characteristics, functions with assets used and risks assumed, contractual terms (including unwritten ones), economic circumstances and business strategies; adjustments cover payment terms, volumes, advertising, intermediation, packaging, freight, physical characteristics and transaction dates.
Código Tributario, art. 199-DDG-001/2018 sec. 4.2 sets out the quartile computation in full, including interpolation. Results between Q1 and Q3 inclusive are accepted; anything outside is deemed to be the median, not the nearer limit.
DGII Guía DG-001/2018, sec. 4.2With almost no publicly reporting Salvadoran companies, studies in practice use regional Latin American and pan-American sets, with internal comparables preferred where they exist. Excluded comparables must be listed with reasons, and non-quoted currencies converted to USD at the transaction-date rate.
DGII Guía DG-001/2018, secs. 3 and 5No statutory rule fixes the tested party, but the Salvadoran entity is normally tested because the DG-001/2018 documentation structure is built around local functions, assets and risks. Analysis is expected transaction by transaction, and segmented financials need consistent allocation support.
DGII Form F-982 v4 fields; DGII Guía DG-001/2018, sec. 7Group-level content covers structure, intra-group transactions, functions and risks, intangibles and their consideration, and the group pricing policy; taxpayer-level content covers counterparties, transaction descriptions with the method applied, and the comparability analysis with sources and adjustments. Sec. 7(iii) also prescribes the study's structure.
DGII Guía DG-001/2018, sec. 7; Código Tributario art. 147 lit. e)Art. 124-A triggers the Informe de Operaciones con Sujetos Relacionados on Form F-982. Below the threshold nothing is filed, but the art. 62-A pricing duty and the art. 147 documentation duty still apply.
Código Tributario, art. 124-A; DGII Guía DG-001/2018, sec. 6El Salvador's tax year is the calendar year. The standing rule is 31 March; FY2025 filing was reported as moved to 7 April 2026 as a one-off. There is no separate deadline for the study, but it must be complete when F-982 is filed, and by 31 May where a dictamen fiscal is due.
Código Tributario, art. 124-A; Deloitte El Salvador alerts, Jan and Apr 2026Version 4 has been in force since 1 October 2018 and is filed only online through Servicios en Línea DGII. Filers must state whether each transaction was at arm's length, which means the benchmarking must be finished before filing.
DGII Form F-982 v4 and technical specifications (700-DGII-GA-2018-20271)Art. 147 lit. e) covers documentation of related-party and listed-jurisdiction transactions; after four years it may be held on optical or electronic media if integrity is guaranteed, DGII access preserved and an external auditor certifies the conversion. Accounting records must be in Spanish under art. 139.
Código Tributario, arts. 147 lit. e) and 139A dictamen is compulsory for taxpayers with assets above USD 1,142,857.14 at the previous 31 December, prior-year income above 4,817 minimum monthly wages, or in merger, transformation or liquidation. It gives the DGII a standing detection channel independent of audit selection.
Código Tributario, arts. 131 and 135 lit. f)El Salvador is not an Inclusive Framework member (list updated 5 December 2025) and not a participant in the Multilateral Convention on Mutual Administrative Assistance (status 1 September 2026), so it is outside the Action 13 minimum standard entirely.
OECD, Inclusive Framework composition (5 Dec 2025); OECD, MAAC participating jurisdictionsArt. 244 lit. l) also catches late filing and filing without the required specifications. Most commentary still quotes USD 1,095 on the old USD 365 wage; the commerce minimum monthly wage rose to USD 408.80 on 1 June 2025. Note the official text places this at lit. l), not lit. i).
Código Tributario, arts. 244 lit. l) and 228; EY, El Salvador minimum wage 2026Art. 241 lit. a) and b) cover refusal and late supply (minimum one minimum monthly wage), art. 242 lit. c) no. 5 failure to exhibit books within the term granted, and art. 245 lit. d) premature destruction (minimum nine minimum monthly wages).
Código Tributario, arts. 241, 242 and 245There is no transfer-pricing-specific penalty. Supplying inexact information about the business is one of the statutory presumptions of intent, so an aggressive position defended on thin documentation risks the higher rate.
Código Tributario, arts. 253 and 254Holding a study does not shield a taxpayer from an adjustment penalty. Art. 261 relief is the only route: it drops from 75% to 30% once the DGII issues a requirement, summons or notice, and is lost altogether if the correction comes after the term granted. The art. 262 numeral 1) uplift of 75% for recidivism within three years was declared unconstitutional in Inc. 82-2020 of 18 May 2022; only numeral 2), reiteración — repeating the same breach before any earlier sanction is final — survives, and it adds 50%.
Código Tributario, arts. 261 and 262; Sala de lo Constitucional, Inc. 82-2020 (D.O. No. 104, Tomo 435, 2 Jun 2022), as annotated in the consolidated Código TributarioArt. 175 also allows three years for standalone penalties, counted from the day after a late filing. The three-year interruption from the auditor designation order, added in 2014, was annulled with effect from 1 January 2019.
Código Tributario, arts. 175, 82 and 84Arts. 120 and 173 let the administration demand books, records and explanations in the manner and time it specifies; failure within that term is separately penalised. Secondary sources quoting a fixed number of days describe practice, not law.
Código Tributario, arts. 120, 173, 241 and 242The Código Tributario contains no APA provision, and there is no DGII guidance, fee schedule, tenure or rollback rule. Certainty must be built from documentation quality and consistency across years.
Código Tributario (no APA provision); Grant Thornton, El Salvador transfer pricingOutside the Inclusive Framework there is no Action 14 minimum standard, no MAP peer review, no published statistics, no arbitration and no domestic MAP guidance. For counterparties other than Spain there is no treaty route at all.
El Salvador–Spain double tax convention (BOE-A-2009-9325), mutual agreement articleThe tribunal's ruling closes the administrative stage under art. 188, after which judicial review lies to the Sala de lo Contencioso Administrativo of the Supreme Court, with constitutional amparo beyond that.
Ley de Organización y Funcionamiento del TAIIA, art. 2; Código Tributario, art. 188A primary adjustment produces tax, interest and penalty only, with no deemed dividend or loan. There is no domestic downward adjustment mechanism, so relief for economic double taxation depends entirely on the Spanish treaty.
Código Tributario, arts. 62-A, 68 and 199-A to 199-DThose rulings struck down D.L. 762, 763 and 764 of 2014 for breach of art. 135(1) of the Constitution, with effects deferred to 31 December 2018; a further ruling published 14 October 2021 annulled D.L. 127/2018 for curtailing that deferral.
Sala de lo Constitucional, Inc. 96-2014 and Inc. 126-2014, as annotated in the consolidated Código TributarioIncentives under the Free Zones, International Services, digital assets and renewable energy laws are exposed to top-up tax collected in parent jurisdictions, cushioned only by the substance-based income exclusion. Counsel have urged a QDMTT or qualified refundable tax credits; nothing has been legislated.
Consortium Legal, "Pillar Two in El Salvador", 17 Aug 2026El Salvador is outside the Inclusive Framework, so it did not elect to apply the simplified and streamlined approach from 2025, and no counterparty jurisdiction is obliged to respect a Salvadoran Amount B outcome. Neither the Code nor DG-001/2018 mentions it.
OECD, Inclusive Framework composition (5 Dec 2025); Código Tributario and DGII Guía DG-001/2018The Ministerio de Hacienda paired it with a tax crime investigation programme and an OECD maturity-model self-assessment. Reported audit focus: intra-group financing and treasury, royalties, service charges and restructurings, with persistent losses and tax-haven routing as risk flags.
Ministerio de Hacienda press release, 30 Oct 2024; Grant Thornton; Deloitte El SalvadorRecent Código Tributario reforms concern electronic tax documents, invoicing and customer identification (for example D.L. 960 of 28 February 2024 and the September 2024 package). The moving parts for 2026 are administrative: the September preferential-regime list and the F-982 filing date.
EY Centroamérica, reforms to the Código Tributario (Sept 2024)El Salvador's transfer pricing regime is compact, wholly statutory, and no longer tethered to the OECD Transfer Pricing Guidelines. The rules sit in the Código Tributario, inserted by Decreto Legislativo No. 233 of 16 December 2009 with effect from tax year 2010: art. 62-A (the pricing duty), art. 124-A (the annual report), art. 147 lit. e) (retention), art. 135 lit. f) (the auditor's statement) and arts. 199-A to 199-D (market price, related parties, comparability). The Dirección General de Impuestos Internos administers them; appeals lie to the TAIIA.
Art. 62-A does not adopt the OECD wording. It requires taxpayers dealing with sujetos relacionados, or with persons in preferential, low- or nil-tax jurisdictions, to price by reference to precio de mercado, the market price between independent parties for goods or services of the same kind. There is no threshold and no carve-out; the USD 571,429 figure quoted locally is the F-982 filing threshold, not the trigger for the pricing duty. Art. 199-C defines relatedness mechanically at 25% of capital or votes; art. 199-D deems counterparties in listed low- or nil-tax jurisdictions not independent, excluding them from any comparable set as a matter of law.
D.L. 763/2014 had added a second paragraph to art. 62-A directing taxpayers and the DGII to apply the OECD guidelines. The Sala de lo Constitucional struck that decree down for want of genuine parliamentary deliberation (Inc. 96-2014; also Inc. 126-2014), effective 1 January 2019, and it has never been re-enacted. Treat any statement that El Salvador "applies the OECD Guidelines" as contestable.
Two method regimes coexist, and knowing which binds whom is the practical skill. For the taxpayer's own analysis, DGII Guía de Orientación DG-001/2018 accepts the five familiar methods and calls for el método más adecuado, chosen after comparability analysis rather than by hierarchy. But the guide is built expressly on the annulled second paragraph of art. 62-A: it is followed in filings and respected in audits, yet it is not a rule a taxpayer can hold the administration to.
When the DGII challenges a price, the provision in force is art. 199-B, and it is not a method in the OECD sense. For domestic transactions it looks to the selling price of the same goods or services at unrelated establishments in El Salvador; for exports, to prices at which unrelated Salvadoran exporters shipped the same goods to the same destination; for imports, to prices in the country of acquisition plus transport cost. Three suppliers suffice where more exist, and the audited taxpayer and its related parties can never be among them. In substance this is a local CUP applied without functional adjustment, and the gap between it and a properly constructed TNMM study is where Salvadoran disputes are won and lost.
On ranges, DG-001/2018 mandates the interquartile method wherever there are two or more comparables. Results between the first and third quartiles inclusive are accepted; results outside are moved to the median, not the nearer edge — an expensive default worth modelling before filing. Local comparables barely exist, so studies rely on regional Latin American sets from commercial databases. F-982 names the parte analizada transaction by transaction; the Salvadoran entity is normally tested, and segmented financials need documented allocation keys.
El Salvador has no BEPS Action 13 regime — no master file, no local file, no country-by-country report. What it has is a retention duty plus a guidance-level content list, and together they do most of the work of a local file.
Art. 147 lit. e) requires documentation of related-party and listed-jurisdiction transactions to be kept for ten years from issue or receipt, with electronic storage permitted after four years if integrity is guaranteed and an external auditor certifies the conversion. DG-001/2018 section 7 sets the content: at group level, legal and operating structure, intra-group transactions, functions and risks, intangibles and the group pricing policy; at taxpayer level, each counterparty identified, each transaction described with the method applied, and a comparability analysis naming data sources and adjustments. It reads like a master file and a local file without the statutory scaffolding, and it carries no threshold: a taxpayer below USD 571,429 still owes the documentation, it simply files nothing.
Disclosure runs through Form F-982 version 4, filed only online. It is granular: per transaction, the tested party, the comparable type, the tested price or margin, the interquartile range, and whether the result was at arm's length, with any adjustment in dollars. The study must therefore be complete before the form is filed. Art. 124-A sets the deadline at three months from year end — 31 March — though FY2025 filing was reported as moved to 7 April 2026. Art. 135 lit. f) then requires the auditor issuing the dictamen fiscal, mandatory above USD 1,142,857.14 in assets, to state whether related-party dealings comply — a standing detection channel that surfaces gaps without an audit being opened.
The penalties are equity-based, which makes them unpredictable in a way profit-based penalties are not. Failing to file F-982, filing late, or filing without the required specifications costs 0.5% of equity or book capital under art. 244 lit. l), floored at three minimum monthly wages. Commentary still quotes USD 1,095, but the commerce minimum wage rose to USD 408.80 on 1 June 2025, lifting the floor to USD 1,226.40 for 2026. Withholding information the DGII requires costs a further 0.5% (art. 241), and destroying documentation inside the ten-year period 2% of equity (art. 245).
On the adjustment itself there is no bespoke transfer pricing penalty and, critically, no documentation-based penalty protection: a study immunises nobody. An assessment increasing the base attracts the general evasion penalties: 25% of the tax under art. 253, or 50% under art. 254 where intent is presumed — and supplying inexact information about the business is a statutory trigger. The only relief is art. 261: 75% mitigation for voluntary correction before any DGII requirement or notice of audit, 30% afterwards if the correction is made within the term granted, and nothing at all beyond it. The art. 262 numeral 1) uplift of 75% for recidivism within three years was declared unconstitutional in Inc. 82-2020 of 18 May 2022, leaving only numeral 2), reiteración, which adds 50%.
Timing now favours taxpayers. Art. 175 gives the DGII three years to audit a return filed on time, five where none was filed; the three-year interruption running from the auditor designation order fell with the 2014 decree on 1 January 2019 — worth pleading rather than assuming. Capability, meanwhile, is rising: in October 2024 the Ministerio de Hacienda launched transfer pricing and tax crime programmes under the OECD/UNDP Tax Inspectors Without Borders initiative. Reported audit focus is intra-group financing, royalties, service charges and restructurings, with persistent losses and tax-haven routing as standard risk flags.
There is little of either. El Salvador has no advance pricing agreement programme — no unilateral, bilateral or multilateral route, and no signal one is coming. Certainty has to be manufactured through documentation quality and positions held consistently across years.
One comprehensive double tax convention exists, with Spain, in force since 2009; its mutual agreement article is the only MAP channel there is. El Salvador is not an Inclusive Framework member, so the Action 14 minimum standard does not apply and there is no peer review, no statistics and no arbitration; nor does it participate in the Multilateral Convention. For a group facing a Salvadoran adjustment on a transaction with any counterparty other than Spain there is no treaty mechanism at all — and art. 68 expressly denies a domestic credit for foreign tax, so economic double taxation simply stands.
Domestically, an assessment or penalty is appealed to the TAIIA within fifteen business days of notification and the tribunal has up to nine months to rule; its decision closes the administrative phase under art. 188, after which judicial review lies to the Sala de lo Contencioso Administrativo. There is no secondary adjustment rule and no corresponding adjustment mechanism, so a primary adjustment produces tax, interest and penalty and nothing else. The leading transfer pricing jurisprudence, tellingly, is not about valuation: it is the 2018 annulment line and a 2021 ruling striking down the legislature's attempt to curtail its effects.
Nothing changes in El Salvador itself, which is precisely the problem. There is no income inclusion rule, no undertaxed profits rule and no qualified domestic minimum top-up tax, and no announced plan to enact one; outside the Inclusive Framework, it is under no obligation to move. But its incentive regimes — Free Zones, International Services, digital assets, renewable energy — sit exactly where other jurisdictions' IIR and UTPR will bite. The saving surrendered locally is collected by a parent jurisdiction instead, partly cushioned by the substance-based income exclusion where real payroll and assets exist. Counsel have urged a QDMTT or a reshaping of incentives as qualified refundable tax credits; neither has been legislated.
Amount B stands in the same position: no election, no covered-jurisdiction status, no mention in the Código Tributario or DG-001/2018, and no obligation on counterparty jurisdictions to respect a Salvadoran outcome. Groups running baseline distribution through San Salvador still need conventional benchmarking. The legislative picture is otherwise static, recent reforms concerning electronic invoicing rather than pricing. The live variables for 2026 are administrative: the preferential-regime list published each September, the F-982 filing date, and the audit capability seeded in 2024.
Four disciplines separate a defensible Salvadoran file from a vulnerable one. First, document to the OECD standard but plead to the statute. Build the study on functional analysis, a most-appropriate-method selection and an interquartile range, because that is what F-982 captures and DG-001/2018 expects — then be ready to meet an art. 199-B challenge on its own terms, showing why local establishment prices are not comparable once functions, risks and volumes are accounted for.
Second, screen counterparties against the DGII's preferential-regime list every year. It changes, it is published in September for the following year, and a hit costs far more than pricing: 25% withholding, non-deductibility, and a statutory bar on treating the counterparty as independent.
Third, close the timing gap. The study must exist when F-982 is filed, and where a dictamen fiscal is due the auditor's art. 135 lit. f) statement lands by 31 May and needs the analysis behind it. Working back, benchmarking should be substantially complete in the first quarter.
Fourth, treat voluntary correction as a live tool. With no penalty protection from documentation, art. 261 relief falls from 75% to 30% the moment the DGII issues a requirement or notice and disappears once the term granted expires, so self-correcting a weak position is unusually cheap before a designation order arrives and materially dearer after it. The regime rewards taxpayers who audit their own numbers first.
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