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Quantera Global Newsletter – April 2021

We are pleased to share 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.

Send an e-mail to TPnews@quanteraglobal.com or call us at +31 88 221 5800 and we will introduce you to the relevant professional.

Quantera Global news, developments, and blogs:

  • Quantera Global Amsterdam office

Quantera Global has opened a new office in Amsterdam, located at the Apollolaan 151.

If you would like to drink a (virtual) cup of coffee with us in our new office, please do not hesitate to contact us.

  • Quantera Global winner of the Corporate INTL Global Awards 2021

Quantera Global has been chosen as the winner of the 2021 Corporate INTL Magazine Global Award ‘International Transfer Pricing Advisory Firm of the Year in the Netherlands – 2021’. Corporate INTL’s annual awards mark excellence for the world’s leading advisers and financiers in an array of countries and continents around the globe. We feel proud to be part of this group.

Please read our full press release on this topic here.

  • 4 steps to manage the compliance burden efficiently

Following increased media attention and pressure on tax authorities with respect to MNEs paying their fair share of tax, Quantera Global proposes a 4-step strategy to manage the compliance burden efficiently and mitigate risks.

If you would like to read the full article, please click on this link.

  • Attention to Dutch “flow-through” landscape

There is currently a lot of (political) pressure on the Dutch flow-through structures. A legitimate question could be whether these structures can be regarded as sustainable.

If you have a flow-through structure in place or if you are interested in the developments, please click on this link.

  • Quantera Global aired on national television in RTL Z ‘De Barometer’

Quantera Global featured in a 2-minute item in the RTL Z broadcast ‘De Barometer’ filmed at our Waalre office. Theo Elshof explained the increasing importance of transfer pricing for multinational companies, while Mike van Vuuren explained the added value of Coperitas, Quantera Global’s software solution for transfer pricing processes and data.

Please click this link to watch the item (including subtitles).

  • Webinars

In 2020 we started hosting free-of-charge webinars on a variety of Transfer Pricing topics. This became an instant success. Therefore, we will continue these webinars in 2021. We currently have the following webinars scheduled:

  • 15 April: Transfer pricing risk management: compliance & organization
  • 22 April: Transfer pricing developments Africa
  • 20 May: Transfer Pricing Controversy
  • 26 May: Transfer Pricing developments in the United States
  • 17 June: Transfer Pricing Risk Management: APAs & MAPs

To register for one or more webinars, please visit our website https://www.quanteraglobal.com/group-sessions/ and select the webinar you would like to register for.

You can watch previous webinars by clicking on this link.

News around the world:

  • Australia

Australia and Belgium entered into a Memorandum of Understanding on the procedure for the arbitration of tax disputes between both tax authorities.

 

  • Bahrain

Bahrain introduces CbCR reporting requirements, which will be effective as of the financial year commencing on or after 1 January 2021. Bahrain-resident entities that are part of a MNE whose consolidated revenue exceeds BHD 342 million (approx. EUR 760 million) are included by this regulation.

 

  • Brazil

The Brazilian government has approved three new tax treaties to eliminate double taxation and prevent tax evasion and avoidance. The contracting states are Switzerland, Singapore, and the United Arab Emirates (UAE).

 

  • Belgium

The Belgian tax authorities extended the deadline for filing the corporate tax return. The deadline is extended to 28 October 2021 for taxpayers with financial years ending between 31 December and 28 February 2021.

 

  • Canada

The Canadian Revenue Agency released its annual report regarding the mutual agreement procedure (MAP) for the year 2019. During the year 75 new cases were opened and the average completion time (17.6 months) was lower than the target (24 months).

 

  • China

Following the success of the test for the simplified process for unilateral APAs in Shenzhen and Guangdong, the State Administration of Taxation now proposed to use the simplified process nationwide.

 

  • Costa Rica

The tax authority of Costa Rica has published guidelines for processing and implementing APAs.

 

  • Cyprus

For most cases, no administrative penalties will be imposed by the tax authorities of Cyprus for overdue submission of DAC6 information, which initially have to be submitted before 30 June 2021.

 

  • EU
  • The Council of the European Union agreed that they will engage in negotiations with the EU Parliament for the proposed directive on public Country-by-Country Reporting (CbCR). The proposed directive would require MNEs with consolidated revenues of more than EUR 750 million in the last two years to publicly disclose – amongst others – the Corporate Income Tax paid for each EU member state.
  • DAC7 has been published in the EU Official Journal. The directive will enter into force on 14 April 2021 and Member States must apply its provisions as of 1 January 2023. DAC7 creates an obligation for platform operators to report revenues earned by sellers offering certain types of services through digital platforms.

 

  • Germany

On 24 March, Germany’s Federal Cabinet adopted a bill implementing the EU’s Anti-Tax Avoidance Directive (ATAD). The regulation contains provisions regarding hybrid mismatch prevention, controlled foreign company rules, and exit taxation.

 

  • Georgia

Georgia’s Ministry of Finance amends transfer pricing rules for APAs, including the elimination of the threshold. The amendments are expected to be effective by 2022 (at the latest).

 

  • Greek

The Greek Independent Authority for Public Revenues (IAPR) provided guidance on the transfer pricing implications of the COVID-19 crisis. The guidance describes four subjects and follows the OECD’s guidance on this topic.

 

  • Ireland
    • The Irish tax authorities updated their guidance on reportable DAC-6 rules regarding mandatory disclosure of cross-border arrangements.
    • The Irish tax authorities provided guidance on the allowance of deduction of interest and royalties at the applicable tax treaty rate.
    • In preparation of the 2021 Finance Bill, the Irish Department of Finance has launched a public consultation on its proposal to adopt an OECD conform attribution of profits to branches of non-resident companies.

 

  • Mongolia

The Mongolian government issued its first transfer pricing assessment, relating to a mining company. The transfer pricing assessment was issued in 2020 and is currently under dispute.

 

  • Mexico

The Mexican Tax Administration has started sending information requests to maquiladora companies which are involved in the process of obtaining an APA. Upon receipt of the request, companies have 10 days to provide the information requested.

 

  • Netherlands

The Dutch Secretary of State announced that DAC6 has an exemption to prevent double or multiple notifications. Intermediaries can be exempted if they prove that another intermediary company has notified in another (EU) state.

 

  • OECD
  • A new update of the OECD Transfer Pricing Guidelines is expected to be available by mid-2021.
  • Working Parties of the OECD invite the public to provide input on the Commentaries on art. 9 of the OECD Model Tax Convention which relates to the taxation of transactions between associated parties. This is focussed especially on the domestic application of interest deductibility. Comments on the discussion draft should be send before 28 May 2021.

 

  • Qatar

The Qatari tax authorities introduced transfer pricing guidelines for documentation and compliance for financial years beginning on or after 1 January 2020.

 

  • Serbia

Serbia’s Ministry of Finance published the arm’s length interest rates for 2021. Taxpayers may use the prescribed interest rates or apply the OECD-based methods for assessing intercompany interest rates. The interest rates are effective as of 27 March 2021.

 

  • Singapore

Singapore has implemented regulations which govern the application of concessionary tax rates to companies who derive qualifying intellectual property income under the Singapore Income Tax Act.

 

  • United Kingdom
  • The HM Revenue & Customs (HMRC) is considering aligning transfer pricing documentation requirements with the OECD standardized approach. HMRC opened a consultation on the possible adoption of these new requirements. The consultation is open for comments until the 1 June 2021.
  • HMRC updated the CbC reporting scheme to the XML Schema 2.0, which was introduced by the OECD in June 2019. All reports submitted on or after the 1 January 2021 must use the new XML format.

 

  • Zambia

The Zambian government has introduced Country-by-Country Reporting regulations, effective as of 1 January 2021. The Country-by-Country Report must be filed within 12 months after the last day of the accounting year of the group.

 

This information is intended only as a general update for interested persons and should not be used as a basis for decision-making. For further details please contact Quantera Global, Eindhovenseweg 128, 5582 HW Waalre, the Netherlands, phone: +31 88 221 58 00, e-mail: TPnews@quanteraglobal.com