In this edition of the newsletter, you will find the most important national and global developments in tax law that are (closely) related to the transfer pricing world.
Please feel free to contact us if you have any questions.
In the past month, we successfully completed several challenging and noteworthy projects, including:
If you would like to know more about these topics, please feel free to contact us.
On 1 June, the final domestic top-up tax return template for fiscal year 2024 was published in the Belgian Official Gazette. The template does not differ from the latest published draft version. The first filing deadline is 30 September. Additionally, on 15 Juni, the final domestic top-up tax return template for fiscal year 2025 was published as well.
On 15 June, the Cyprus Tax Department made two announcements on Pillar Two implementation. It confirmed that Cyprus is treated as having a qualified IIR for fiscal years beginning on or after 31 December 2023 and can receive and exchange top-up tax information returns under DAC9. It also clarified the filing and payment obligations for Cypriot constituent entities, including the TTIR, related notifications and IIR top-up tax returns.
On 24 June, the European Commission adopted the Tax Simplification Package, which includes a Direct Taxation Omnibus and updates on DAC. The proposals aim to reduce the compliance burden on businesses and key measures were included on EU direct tax directives, which impact withholding tax on dividends, interest, and royalties, alongside the elimination of overlaps between CFC and Pillar Two rules. Furthermore, the DAC recast will significantly scale back reporting obligations for multinational groups subject to the 15% minimum tax rate. The package now proceeds to the European Parliament for consultation and the Council for adoption.
On 5 June, the Italian Supreme Court ruled in Italy vs Montebianco S.p.A. (Case No 18145/2026). The tax authorities argued that the Comparable Uncontrolled Price (CUP) method should have been used for intra-group sales to Montebianco’s US subsidiary. However, the Court upheld the taxpayer’s use of the cost-plus method, which accurately accounted for unique personnel costs borne directly by the US entity. Crucially, the Court noted that while the CUP method has an implicit preference, modern OECD and Italian guidelines do not enforce a strict hierarchy if another method proves more appropriate for the specific facts. The case has been referred back to the Court of Appeal for final processing.
On 18 June, the Luxembourg tax administration issued updates to its Pillar Two frequently asked questions (FAQs). The revised guidance provides clarification on registration and GIR notification obligations, establishing that local GIR filing is generally exempted provided that central filing conditions are satisfied. Furthermore, it defines the filing triggers for local IIR, UTPR, and QDMTT returns, noting that these obligations primarily arise when top-up tax is due or allocated to a constituent entity within Luxembourg.
On 14 June, the Tax Administration of Peru announced via the Official Gazette an extension of the compliance deadline for submitting the FY 2025 Local File. Taxpayers utilizing Virtual Form No. 3560 to fulfill transfer pricing information requirements now have until the due dates applicable to their October 2026 monthly tax obligations. Depending on the taxpayer’s tax identification number (RUC), the extended deadlines fall between 16 and 23 November 2026.
The following updates have been provided by our network partner, BTTP.
Cash pooling remains an area of interest for transfer pricing purposes. In a recent individual tax ruling concerning a real cash pooling structure, the Director of the National Revenue Information (KIS) confirmed that settlements between related parties under a real cash pooling arrangement may qualify as controlled financial transactions, with receivables and liabilities analysed separately and without netting. Importantly, the ruling clearly distinguishes between capital value and interest: only the capital exposure should be taken into account when testing the PLN 10 million TP documentation threshold, while interest does not affect this threshold. This individual tax ruling provides useful practical guidance for groups using cash pooling structures (link here).
In Poland, foreign entities operating through a permanent establishment should carefully distinguish between TP documentation and TP reporting obligations. Services performed by a Polish permanent establishment of an EU/EEA entity for a related Polish entity may benefit from a statutory exemption from local TP documentation, provided the relevant conditions are met, but this does not necessarily eliminate the obligation to report them in the TPR-C form. This approach was confirmed in a recent individual tax ruling issued by the Director of KIS, which also indicated that the attribution of income or loss to a Polish permanent establishment may itself constitute a controlled transaction subject to TP documentation and reporting obligations once the applicable threshold is exceeded (link here).
Year-end transfer pricing adjustments based on outcome testing may qualify as TP adjustments for CIT purposes, provided that they are aimed at aligning the taxpayer’s profitability with arm’s length conditions and the statutory requirements are met. In a recent individual tax ruling, the Director of KIS confirmed that a year-end true-up performed after comparing budgeted figures with actual financial data may fall within the scope of Article 11e of the CIT Act. The ruling concerned intra-group services charged during the year based on planned costs and revenues, with a final year-end adjustment made to align the profitability of the controlled transaction with the arm’s length level. Importantly, the adjustment was not linked to specific invoices or individual monthly services, but to the annual profitability of the transaction as a whole (link here).
Transfer pricing adjustments may have VAT consequences where they can be linked to specific supplies and effectively modify the consideration for those supplies. In a recent individual tax ruling, the Director of KIS confirmed that settlements based on the profit split method, aimed at ensuring an arm’s length price for goods sold between related parties, should be treated as adjustments to the originally invoiced prices of those goods. As a result, such adjustments should affect the VAT taxable base and be documented with corrective invoices. The ruling is particularly relevant for taxpayers applying TP true-ups that are not merely general profitability adjustments, but can be linked to specific taxable supplies of goods (link here).
On 3 June, the Portuguese tax authorities announced an extension for the submission of the GIR and domestic top-up tax returns for fiscal year 2024. The filing deadline has been deferred from 30 June to 30 September, applicable to qualifying groups with fiscal years ending within the window of 31 December, 2024, to 31 March, 2025.
On 16 June, HMRC opened a technical consultation on the International Controlled Transactions Schedule. The proposed annual filing would require in-scope multinationals to report specified cross-border related party transactions and permanent establishment dealings in a standardised digital format. The requirement is expected to apply to accounting periods beginning on or after 1 January 2027. Comments are due by 31 July (link here).
Thank you for taking the time to read this edition of our newsletter. I hope you found the insights and updates valuable. Do you have any questions or need further information? Contact us today to get expert advice on worldwide transfer pricing matters and developments.
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Best regards,
Adriaan van der Heijden
Partner at Quantera Global
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