All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.


Reform is the flavour of the decade in the tax world, as multilateral organisations have undertaken wide reviews of international tax rules, with the aim of modernising them to reflect changes to the way businesses operate in a globalised world.

Whether part of the OECD or not, countries in the region are keeping a close eye on international developments, though there are differing views on the level of engagement the organisation has had with non-member developing countries.

National governments have also conducted reforms to ensure regimes tie in with, rather than work against, such multilateral efforts while also remaining attractive to investors. This is a delicate balance. And Latin America is no different.

But not all in the region are conforming to international reform trends. Flying in the face of the global "race to the bottom" of reducing corporate tax rates, Chile is actually raising its rate. But the hike is gradual, and even then the new rate will stand around the OECD average.

Mexico's reform package also bucked the trend of declining corporate tax rates. Scheduled reductions, from 30% to 29% in 2014, and to 28% in 2015, were repealed this year.

Despite these reforms, taxpayers must still navigate a complex compliance environment, and tax technology is not easing the burden. This is nothing new, but contending with Brazilian transfer pricing rules and technology changes brought in to deal with Big Data is the latest example of technology hindering rather than helping.

This summer, Brazil had the eyes of the world upon it as it hosted the FIFA World Cup, and the 2016 Olympics is up next. Further infrastructure investment will be a part of those preparations, and tax incentives may play a key role.

FDI to Latin America rose 5% in 2013 to almost $185 billion, after a 12% jump the previous year. Mexico in particular attracted higher flows, including the $13.2 billion Anheuser-Busch InBev deal to acquire Grupo Modelo. However, the UN predicts modest 1% growth in foreign investment across the region for 2014. Such figures could prompt tax policy changes to maintain attractiveness.

In this context, International Tax Review brings you the 11th edition of its Latin America regional guide, published in association with: Baker & McKenzie, Deloitte, EY, Marval O'Farrell & Mairal, prietocarrizosa and Ulhoa Canto.

The supplement also contains an exclusive interview with Jorge Correa. The Mexican official and OECD secondee shares unique insights on life at the OECD and the Mexican SAT, and the lessons he has taken from one to the other.

Matthew Gilleard

Corporate tax editor, International Tax Review

more across site & bottom lb ros

More from across our site

The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.
The UK government announced plans to increase taxes on oil and gas profits, while the Irish government considers its next move on tax reform.
War and COVID have highlighted companies’ unpreparedness to deal with sudden geo-political changes, say TP specialists.
A source who has seen the draft law said it brings clarity on intangibles and other areas of TP including tax planning.
Tax consultants say companies must not ignore financial transactions in their TP policies as authorities, particularly in the UK, become more demanding.