Transfer Pricing in Honduras

The legal framework

The regime is compact but complete. The Ley de Regulación de Precios de Transferencia (Decreto 232-2011), in force since 1 January 2014, is the operative statute; its Reglamento (Acuerdo 027-2015) supplies the detail; Tax Code art. 113 (Decreto 170-2016) anchors the power to verify prices. Enforcement sits with the Servicio de Administración de Rentas (SAR), created under Executive Decree PCM-084-2015, through its Departamento de Fiscalización Internacional y Precios de Transferencia.

Article 1 states the object by reference to the principio de libre o plena competencia; article 5 turns it into an obligation to compute income, costs and deductions at the prices and margins independents would have used. Scope is narrow: article 2 catches dealings between Honduran residents and related non-residents, plus any transaction with a person under a special regime enjoying tax benefits — free zones, ZOLI, maquila. Groups whose related parties are all domestic sit outside the study obligation (art. 113(2)), though never outside SAR's audit powers.

Relatedness is broad. Art. 3(3) reaches participation in management, control or capital, single-decision-unit companies, shared directors, foreign PEs of Honduran residents and base-reducing tax-haven dealings; the Reglamento adds family links, preferential agency arrangements and economic dependence. Where the test turns on participation, art. 4 requires a holding above 50%. The OECD Guidelines are a technical reference only, and only so far as they are consistent with Honduran law (Reglamento art. 38) — a position resting on Chapter VI or X with no domestic hook is fragile in audit.

Methods, comparables and benchmarking

LRPT art. 8 lists CUP, resale price, cost plus, profit split (including a residual variant), TNMM and an "other" category, with no hierarchy. A Best Method Principle governs, assessed on fit with the business, information reliability, comparability and fewest adjustments (arts. 22-24); the sixth method requires proof that none of the first five can be reasonably and reliably applied. An easily missed duty sits in the same article: the chosen method must be notified to SAR, discharged through the mandatory method field in Form 545.

Commodity exporters have a dedicated rule. Art. 10 lets an exporter of goods quoted on a transparent market apply CUP at the quoted value on the date shipment begins, modulated for incidences normally admitted by Honduran origin. Decreto 62-2019, an authentic interpretation adopted because Congress found SAR had misapplied art. 10, confirms that the modulation covers official price regulation and that regulated export prices are themselves arm's length, displacing the quotation.

Range mechanics are unforgiving. Art. 9 and Reglamento art. 21 accept any result inside the interquartile range, but a result outside it is adjusted to the median, not the nearer edge. Art. 26 prescribes the quartile algorithm in its own terms — median position (n+1)/2, first quartile at (median position + 1)/2, third at (median position − 1) plus the first quartile position, interpolated where fractional. Those positions reduce to 1+(n−1)p, so art. 26 is the inclusive convention: it reproduces Excel's default QUARTILE / QUARTILE.INC and not QUARTILE.EXC, and using the exclusive variant is often the difference between inside and outside the range.

Foreign comparables are permitted where local data is unavailable, with market adjustments, and five years of data may be used (art. 20). The tested party need not be Honduran, and segmentation is expected wherever an entity has both controlled and third-party turnover. Services must clear a benefit test (art. 27); intangibles get comparability factors and DEMPE-flavoured disclosure (art. 28), but there is no HTVI rule and the promised intangibles agreement has never issued. Art. 11 lets SAR recharacterise where economic substance diverges from legal form.

Documentation: what SAR expects

Honduras has not adopted master file and local file. Its OECD profile ticks both boxes, but the same answer concedes the master file agreement was still to be approved, and SAR's April 2026 Form 545 manual mentions none. Three obligations are real.

First, the Estudio en Materia de Precios de Transferencia — not filed, but produced on request. Art. 32 fixes its fourteen contents, lettered a) to n): functions, risks and assets; the evidence behind the prices; quantified transactions and identified counterparties; the method and its justification; every comparable accepted or rejected, with reasons and sources; each adjustment's methodology; and finally the median, the arm's length range, the market price and the resulting adjustments. Foreign-language material must be translated through a Honduran consulate in the country of origin or by the Traductor Oficial de la República (Ley de Procedimiento Administrativo art. 53, as amended by Decreto 255-2002 art. 11). Art. 29 still cross-refers to the repealed 1997 Tax Code on deadlines; the operative periods sit in Tax Code art. 87 — ten business days by default, five in an audit for anything beyond the initial requirement. Records are kept five years for RTN-registered taxpayers, seven otherwise.

Second, Form 545, due by 30 April for calendar-year taxpayers and within three months of close for special periods (art. 31). Since Acuerdo SAR-236-2024 the Oficina Virtual is the only channel; connection or password failures excuse nothing. Medium and large taxpayers file with no de minimis; small taxpayers file above USD 1,000,000 of cumulative related-party transactions; anyone dealing with a special regime or a tax-haven counterparty is in regardless. The return is granular — method, tested party, profit level indicator, result, adjustments and all three quartiles per transaction — and the adjustment carries automatically into the income tax return.

Third, country-by-country reporting under Acuerdo SAR-653-2023. Groups above EUR 750 million consolidated revenue (the Acuerdo also states HNL 19 billion) are in scope: Honduran ultimate parents file in OECD XML within twelve months of year end, and every Honduran constituent entity notifies by 31 December of the reportable year. The local-filing obligation in Acuerda Segundo numeral 2 is suspended by the Acuerdo's Transitorio until SAR reinstates it, so today only Honduras-headquartered groups file locally.

Audits, penalties and the enforcement climate

The penalty schedule is short and expensive. LRPT arts. 18-19 create three infringements: failing to supply, or supplying false or manifestly inexact, information, fined USD 10,000 in lempira equivalent; declaring an understated base through non-arm's-length valuation, fined 15% of SAR's adjustment, rising to the greater of 30% or USD 20,000 where combined with the information infringement; and any other breach, fined USD 5,000. Only the second carries a documentation defence, art. 18(2) conditioning the infringement on the absence of documentation proving what was declared. There is none against the information penalty. Nor does the primary adjustment depend on documentation: Reglamento arts. 16 and 33 let SAR determine prices on its own evidence and on any information available to it.

Acuerdo SAR-411-2018 supplies the mechanics: the determination runs through Title Four of the Tax Code, and the 15% penalty bites on the adjustment amount. Assessment windows come from Tax Code art. 144(2): five years for RTN-registered taxpayers, seven otherwise, from the day after the return was or should have been filed.

Enforcement has changed with the technology at SAR's disposal. Because Form 545 is filed only through the Oficina Virtual in structured form, and adjustments migrate automatically into the income tax return, SAR can cross-match the two returns against the study the taxpayer says it holds. Its guidance treats incoherence between study and return as inexact data under art. 19(1) — a USD 10,000 exposure created by a formatting mismatch. No target sectors are published; what draws attention are transaction types — intercompany financing, management and administrative service fees, royalty and intangible payments, and distribution and supply-chain pricing — with audits triggered by risk indicators, inconsistencies in filings, transfer pricing disclosures or sector-specific review programmes. One counterweight: the CbC agreement bars reliance on the report to make adjustments.

Dispute resolution and advance certainty

This is the weakest part of the system, and planning should assume it. Honduras has no comprehensive double taxation convention in force. MAP is therefore unavailable and simply unaddressed in the tax law, and the corresponding adjustment route in Reglamento art. 16(2) is inoperable on its own terms: it requires prior SAR authorisation, a treaty in force with the adjusting State, payment of the foreign adjustment with no pending appeal, and certification by the foreign administration. LRPT art. 15 offers only a discretionary examination. Double taxation from a Honduran adjustment is, in practice, permanent.

Advance certainty is equally thin. LRPT arts. 13-14 authorise APAs for up to five fiscal years, effective only for transactions after approval, which precludes rollback — but Reglamento art. 34 leaves the procedure to a general agreement SAR has never issued. There is no APA programme, no rulings regime, no cooperative compliance and no ICAP.

What remains is the domestic route, and it moves fast. Auditors issue a provisional regularisation proposal within ten business days of closing field work (Tax Code art. 125(15)); the taxpayer has fifteen business days to accept or lodge reposición (art. 122(12)); the resolution follows within twenty of the taxpayer's alegaciones (art. 123(1)). Reposición runs fifteen business days and is decided within twenty (arts. 172(1) and 175(2)); apelación goes to the Secretaría de Finanzas through the Superintendencia Tributaria Aduanera (arts. 176(2) and 178(1)), after which the contentious-administrative courts open. No published Honduran transfer pricing judgment could be identified, and there is no accessible repository of tax decisions, so case law offers no guidance.

Pillar Two and what changes in 2026

Honduras has enacted nothing under Pillar Two: no income inclusion rule, no undertaxed profits rule, no domestic minimum top-up tax, no published bill and no CFC regime. Inclusive Framework participation since 2019 has been confined to the minimum standards, principally Action 13. Amount B is likewise unadopted, so Honduran distributors gain nothing when a counterparty jurisdiction applies it.

The live change is country-by-country reporting reaching operation. Acuerdo SAR-653-2023, published 19 March 2024, took effect for fiscal years beginning on or after 1 January 2025, giving a first notification deadline of 31 December 2025 and a first report deadline of 31 December 2026 for calendar-year groups. SAR published a twenty-four-question FAQ on 20 November 2025 — nine on notification, fifteen on filing — but the XML portal was still to be announced by general communication, a real execution risk for a December 2026 filing.

Two items to track. Honduras told the OECD in May 2025 that new transfer pricing regulations were in preparation and a master file agreement imminent; neither has appeared. And the Ley de Justicia Tributaria lapsed without a majority; it carried no TP amendment, but its repeal of exemption regimes would have reshaped the special-regime population inside the TP net.

How practitioners should respond

Start with classification, because it decides everything else. Medium and large taxpayers file Form 545 with no monetary floor; the USD 1,000,000 threshold rescues only small taxpayers, and SAR reclassifies by general agreement (last confirmed: Acuerdo SAR-125-2022). Treat the threshold as filing relief, not a pricing safe harbour: art. 5 still applies.

Build the study before the return. The contemporaneous rule here is arithmetic rather than statutory — every quartile, tested-party result and adjustment on Form 545 must be reproducible from a study that exists on the filing date, because a mismatch is itself a USD 10,000 infringement. Run the range on the inclusive convention art. 26 prescribes (QUARTILE.INC, not QUARTILE.EXC) and document adjustments in the categories the return pre-codes.

Then price for the absence of relief. With no MAP, no operative corresponding adjustment and no APA programme, the only leverage is the quality of the file when SAR opens the audit. That argues for tighter intercompany agreements, contemporaneous benefit evidence for service charges, and conservative positioning on commodity exports and financing — where Income Tax Law art. 25, treating non-commercial related-party receivables outstanding beyond 100 calendar days as advance dividends, does the work a secondary adjustment regime would do elsewhere. Finally, diarise the CbC cycle, and confirm before filing season whether suspended secondary filing has been reinstated.