RELATED PARTIES (Tax Code)
Article 199-C.- for the purposes of the provisions of this Code and
other tax laws, the following shall be understood as related parties:
(a) where one of them directs or controls the other, or owns, directly
or indirectly, at least 25% of its share capital or voting rights;
(b) where five or fewer persons direct or control both persons, or
jointly own, directly or indirectly, at least a 25% shareholding in the share
capital or voting rights of both persons;
(c) where they are companies belonging to the same decision-making unit
or business group. in particular, two companies are part of the same
decision-making unit or business group if one of them is a partner or
participant in the other and is in relation to it in one of the following
situations:
(i) holds a majority of the voting rights;
(ii) has the power to appoint or dismiss a majority of the members of
the administrative organ;
(iii) has, by virtue of agreements concluded with other partners, a
majority of the voting rights;
(iv) has appointed a majority of the members of the administrative organ
solely by their votes; and
(v) a majority of the members of the administrative organ of the company
dominated are members or managers of the administrative organ of the dominant
company or of another company dominated by it.
where two companies each form part of a decision-making unit or business
group in respect of a third company, in accordance with the provisions of that
subparagraph, all those companies shall form part of a decision-making unit or
business group;
(d) for the purposes of the preceding subparagraphs, a natural person is
also deemed to hold a share in the share capital or voting rights, when the
ownership of the participation directly or indirectly corresponds to the spouse
or person united by direct or collateral relationship of kinship, by
consanguinity up to the fourth degree or by affinity up to the second degree;
(e) in a union of persons, a de facto company or a business partnership
contract or a joint venture, where one of the contracting parties or partners
participates directly or indirectly in more than 25 per cent of the result or
usefulness of the contract or activities arising from the partnership;
(f) a person domiciled in the country and a distributor or exclusive
entity of the same resident abroad;
(g) a distributor or exclusive agent domiciled in the country of an
entity domiciled abroad and the latter;
(h) a person domiciled in the country and his supplier abroad, when the
latter made purchases from him, and the volume represents more than fifty per
cent (50 %);
(i) a person resident in the country and his permanent establishments
abroad; and
(j) a permanent establishment situated in the country and its head office or head office resident abroad, another permanent establishment of the same or a person connected with it.
