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.
Quantera Global news, developments, and blogs:
EU project
We are honoured to have been selected by the EU to support Poland and Slovakia in streamlining their Advance Pricing Agreements processes. The general objective of the project is to contribute to institutional, administrative, and growth-sustaining structural reforms in Poland and Slovakia.
We will share our extensive knowledge and expertise and address relevant issues related to positioning, policies, organisation, and automation. This multi-country project officially started on 13 September 2021.
Blog on New Transfer Pricing Legislation in Portugal
The changes to the Portuguese transfer pricing regime following the publication of Ministerial Decree No. 268/2021 of 26 November reflect recent developments in national and international transfer pricing legislation.
For more information on the new Transfer Pricing legislation in Portugal, please read our article here.
Blog on APAs and the Consequences of COVID-19
After obtaining the first Dutch Covid-19-related APA, we were asked by IBFD to share our thoughts on this topic and have collected them in the article “APAs and the Consequences of Covid-19”.
The full article can be found here.
Dutch article on preventing mismatches
Recently Stefan Ubachs, Director of Quantera Global, shared his views in a Dutch NTFR article (2021/3794) on the Dutch Bill Preventing of mismatches in the application of the arm’s length principle.
News around the world:
Australia
- On 12 November, the Australian Taxation Office released a report with its findings on ‘category C’ disclosures by taxpayers in the Reportable Tax Position Chart (RTP). Taxpayers who are part of a group with an Australian income of $250 million or more must complete the RTP schedule (an appendix) on their income tax return.
- On 18 November, the Australian tax authorities announced that the filing requirements for country-by-country (CbC) reporting have been extended to 4 February 2022.
Brazil
The Superior Chamber of Tax Appeals (CSRF) published decision 9101-005.666, rejecting the requirement for transfer pricing adjustments on loan agreements with related parties abroad.
Our Alliance partner Castro Barros wrote an article about this topic, which can be found here.
Denmark
- In a High Court case (Denmark vs “Fashion Seller A/S), the Danish tax authorities rejected the request to enter into a MAP because it did not contain the minimum information required by paragraph 5(a) of the Code of Conduct for the effective implementation of the Double Taxation Convention with respect to the adjustments of associated companies (EU 2006 code of conduct).
- In other High Court cases (Denmark vs Takeda A/S and NTC Parent S.a.r.l), the issues concerned whether withholding tax should be paid on interest paid through foreign group companies considered to be “beneficial owners” via conduit companies and whether payments were exempt from withholding taxes.
- The Danish transfer pricing documentation rules have recently been updated and include an exemption from the filing requirements for taxpayers with only domestically controlled transactions. For companies not covered by the exemptions, transfer pricing documentation needs to be filed within 60 days of the tax return filing deadline for FY 2021.
Europe
- The EU adopts public CbC reporting to deter corporate tax avoidance. Each Member State is expected to implement it in 2023 and it is expected that companies will have to comply from 2024 onwards.
- The European Commission (EC) has indicated that it will submit a directive proposal to combat the abuse of conduit companies in the fourth quarter of 2021. As soon as this proposal is published, it will be examined how it relates to existing legislation and regulations, proposals already made and the results of the report of the Committee on conduit companies.
Netherlands
On 22 November, State Secretary of Finance Vijlbrief sent to the House of Representatives the report on Conduit Companies and the government’s response to this report. The full Dutch report can be found here.
OECD
According to the OECD’s 2020 MAP statistics released on 22 November, around 75% of MAPs concluded globally in 2020, both for transfer pricing and other tax matters, resulted in a complete resolution of the problem. Only 3% of the cases were closed without reaching an agreement.
Romania
On 29 October, the Romanian National Tax Agency updated the list of major taxpayers required to prepare transfer pricing documentation.
Spain
From 2022, The Spanish Budget will set a minimum corporate tax rate of 15% of the tax base for certain taxpayers, regardless of whether the companies carry out activities abroad. The minimum tax will apply to companies paying tax under the consolidated tax regime and to companies with a net turnover of EUR 20 million or more.
Ukraine
On 28 October, the Cabinet of Ministers of Ukraine approved a new Advance Pricing procedure for transfer pricing purposes. This will come into force in Ukraine on 1 January 2022.
United Kingdom
On 30 November, the UK government outlined updates to numerous tax policies as part of an effort to modernize and simplify the UK tax system and tackle non-compliance. These include measures related to tax credits for research and development, transfer pricing documentation, corporate tax compliance, mandatory disclosure rules and ‘digital taxation’ for corporate taxes.
United States
- Eligible taxpayers are invited by the Louisiana Department of Revenue to participate in a voluntary initiative designed to resolve transfer pricing issues. The purpose of the Louisiana Transfer Pricing Managed Audit Program is twofold. First, it seeks to provide a quick solution to corporate tax audits when transfer pricing issues arise. Second, it seeks to provide taxpayers with certainty and uniformity in resolving transfer pricing issues for open audit periods and a specified period of future tax years.
- On 19 November, the U.S. House of Representatives approved an amended version of President Biden’s Build Back Better bill (which includes changes to corporate and international taxes). The bill contains a number of important international, corporate and individual tax provisions. One of these amendments aim to bring it in line with the OECD’s Global Tax Agreement by applying a higher rate and changing the global provisions for intangible low-tax incomes.