We are pleased to share the most important national and global developments in tax law that are (closely) related to the transfer pricing world
Quantera Global news, developments, and blogs
In the past month, we have completed several challenging and interesting projects worth mentioning, such as:
- In order to asses the relative contributions within a group, we performed a contribution analysis for one of our clients
Controversy case European countries
- We successfully completed a complex transfer pricing controversy case involving two countries within the EU.
- A tax audit had resulted in severe (proposed) adjustments, and in addition, client suffered from a very harsh behavior of one of the tax authorities. After a lot of de-escalating work, we were able to convince both tax authorities of a solution for the past ending without double taxation and with no interest or penalties.
If you would like to know more about these topics, please feel free to contact us.
QG Academy Webinars
As part of the series of country-specific webinars to mark our 10th anniversary, we hosted a webinar on 13 July in cooperation with WTP Advisors’ Guy Sanschagrin and Michael Bredahl. This webinar focused on US transfer pricing developments over the past decade.
During this webinar, the following topics were discussed:
- Summary of key developments in transfer pricing in the U.S.;
- The various types of intangible assets and the need to understand their context within a multinational enterprise;
- The Tax Cut and Jobs Act including GILTI, FDII and BEAT;
- Proposed U.S. Treasury rules regarding transfers of IP;
- OECD Pillar II, the global minimum tax, and potential for double taxation in the U.S.; and
- Controversies and risks including the new guidelines for review and acceptance of APAs and recent tax cases.
For more information or to register for any upcoming webinars, please visit our website https://www.quanteraglobal.com/group-sessions/
You can watch our previous webinars here.
News from around the world:
Brazil
On 3 July 2023, the Brazilian Authorities issued a public consultation document on the new transfer pricing rules. The consultation document contains guidance and instructions on how to apply the new transfer pricing rules.
Cyprus
The Cypriot Tax Department issued a tax circular on 7 July 2023. The circular is effective retroactively from 1 January 2023 and provides guidance on the documentation method for ‘’back-to-back’’ financing transaction. The Cypriot Tax Department deems the CUP (Comparable Uncontrolled Price) method the most appropriate.
European Commission
The European Commission published its annual report on taxation on 3 July. The report contains the recent trends in EU tax systems and aims to provide policymakers across the EU with insights to help them improve tax policy, implementation or compliance.
Germany
Germany has published a draft implementation bill of Pillar Two in line with the OECD. The draft implementation bill is based on input provided on the initial discussion draft published by the German Authorities earlier this year. The draft implementation bill also clarifies how to deal with existing German tax rules in conjunction with Pillar Two.
Gibraltar
Gibraltar delivered its 2023 Budget on 11 July. The Budget includes several measures, including a consultation on the implementation of the Pillar Two measures.
Liechtenstein
On 11 July, the Government of Liechtenstein approved draft legislation to implement Pillar Two in Liechtenstein and sent it to the Parliament for approval along with an Explanatory Memorandum.
OECD
- The OECD published an outcome statement on Pillar One and Pillar Two providing more information regarding the timing of implementation of both Pillars. Depending on the progress made in the second half of 2023, the Pillars will be implemented as of fiscal years starting on 1 January 2024 or 2025.
- On 17 July, the OECD released a public consultation document, seeking public comments on Amount B under Pillar One. Comments need to be submitted by 1 September 2023.
- The OECD also published several documents on 17 July. The documents include guidance on the Subject to Tax Rule (Pillar Two), administrative guidance on the GloBE-rules (Pillar Two) and contains the GloBE Information Return.
The Netherlands
- On 6 July, the Deputy Minister of Finance proposed several amendments to the tax ruling policy in a letter to the Lower House of Parliament. The proposed amendments should be implemented as of the beginning of October 2023.
- The Dutch Tax Authorities published helpful “knowledge group” positions on 4 July. The publication contains the interpretation of the Dutch Tax Authorities regarding the scope of art. 8bd CITA.
Turkey
Draft legislation has been presented to the Turkish Parliament to change certain aspects of Turkish tax law. A few of the most important changes suggested in the draft legislation are the following items:
- Increase of CIT rate from 20% to 25%
- Increase of CIT for financial institutions from 25% to 30%
- Reduction of tax exemptions for immovables
United Kingdom
- The UK passed the Finance (no.2) Act 2023 on 11 July. The Act contains legislation for the implementation of the OECD Pillar Two measures. The measures will take effect for accounting periods beginning on or after 31 December 2023.
- On 19 July, the Transfer Pricing Records Regulations 2023 were published and in the International Manual of HMRC new guidance has been added regarding the transfer pricing documentation requirements in the UK.
- As of 26 July 2023, it is no longer required for entities within the UK to make an annual country-by-country reporting (CbCr) notification. The notification stated the ultimate parent entity who would file the report.