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 world transfer pricing.
Please feel free to contact us if you have any questions.
Quantera Global news, developments, and blogs
- We have officially launched our new podcast “The Transfer Pricing Method”. The first two episodes on APAs and on Public CbCR are now available on Spotify, YouTube, and our website.
- Quantera Global and CauseyWestling, a Swedish consulting firm focusing on all commercial tax-related issues that companies may encounter including transfer pricing, form a strategic partnership. For more information, click here.
- On 4 December, the Dutch State Secretary of Finance released a Decree in which the consequences of OECD Pillar 1 Amount B for Dutch tax purposes are mentioned. For more information, you can read our blog here.
Quantera Global specialties
In the past month, several challenging and noteworthy projects were successfully completed, including:
- A contribution analysis for the application of the profit split method.
- Cash pool analyses for multiple currency cash pools.
- Implementation of a new transfer pricing model for one of our clients, to align their transfer pricing with their growing business.
If you would like to know more about these topics, please feel free to contact us.
News from around the world:
Australia:
- On 26 November, the Senate passed the legislation regarding the Pillar Two global minimum tax rules. Of the three bills introduced on 4 July, one is awaiting Royal Assent and two require further approval from the House of Representatives due to amendments.
- On 13 November, the Australian Taxation Office (“ATO”) issued a release announcing an extension of the filing deadline for local files, master files and CBC reports for the year ended 31 December 2023. The ATO has granted a filing deferral until 31 January 2025.
Bosnia and Herzegovina
On 20 November, the Ministry of Finance of the Federation of Bosnia and Herzegovina published its amendments on the Transfer Pricing Rulebook to revise Master File and Country-by-Country reporting requirements. The new amendments are effective from 1 January 2025 and lower the reporting threshold from BAM 1.5 billion (approximately EUR 766 million) to EUR 750 million (or its equivalent in convertible marks). Additionally, the reporting deadline has been extended from 31 March of the following year to 12 months after the fiscal year-end.
European Union
On 29 November, the European Commission published draft Implementing Regulation 2024/2952 to standardise information disclosure for public country-by-country reporting (CbCR). It introduces a common template, electronic format and a taxonomy for reportable data.
Germany
On 14 November, the German Ministry of Finance issued a draft bill proposing updates to the list of jurisdictions participating in the Multilateral Competent Authority Agreement (MCAA) for the exchange of Country-by-Country (CbC) reports. The updated list includes Albania and Ukraine.
Hungary
- On 15 November, Hungary’s National Tax and Customs Administration published a draft declaration form for taxpayers subject to the global minimum tax. Unlike the autumn tax package proposal, the draft form only requires reportable data from domestic constituent entities of multinationals or large domestic groups and their ultimate parent entities.
- On 4 November, Hungary’s parliament passed the 2024 Hungary-US Agreement on the Automatic Exchange of Country-By-Country Reports.
Ireland
On 6 November, Ireland’s parliament passed a bill to simplify transfer pricing for baseline marketing and distribution activities and amending global minimum tax rules (i.e., Pillar One Amount B and Pillar Two).
Italy
On 19 November, the Italian Tax Authority issued Circular Letter No. 23/E, offering clarifications on transfer pricing in the context of the Investment Management Exemption (IME) regime. The Circular specifically addresses the application of the arm’s-length principle to asset management transactions, providing detailed commentary on transfer pricing guidelines and the qualifying documentation required. These insights reflect feedback gathered during the public consultation on draft guidelines for asset management transfer pricing. By focusing on the transfer pricing aspects, the Circular aims to ensure compliance with the independence requirement for foreign investment vehicles and related entities, contributing to the proper application of the IME regime.
OECD
- On 18 and 19 November, G20 Leaders met in Rio de Janeiro, Brazil, to address global challenges and advancing inclusive growth. The African Union was welcomed as a full G20 member. The Rio de Janeiro Leaders’ Declaration emphasized progressive taxation as crucial for social and development goals and pledged cooperation on taxing very wealthy individuals. Commitments to the 2021 Pillars One and Two tax reforms were reaffirmed and discussions on a UN Framework Convention on International Tax Cooperation were noted. The OECD’s Tax Report to G20 Leaders highlighted updates on BEPS 2.0, tax transparency and capacity-building efforts, reinforcing the G20’s international tax priorities.
- On 15 November, the sixth Tax Certainty Day, the OECD announced the winners of the 2023 MAP and APA awards, which recognise jurisdictions for efficiency and effective outcomes in resolving tax disputes. This year, APA statistics are included for the first time and complement the Mutual Agreement Procedure (MAP) data. Both sets of statistics are aligned with the OECD/G20 tax certainty agenda, aimed at enhancing transparency and improving tax dispute resolution mechanisms globally.
MAP statistics provide insights into the effectiveness and timeliness of resolving disputes, while APA statistics offer a clearer view of efforts to prevent transfer pricing conflicts.
Poland
On 15 November, the President of Poland signed the Act of 6 November 2024, on top-up taxation for entities within international and domestic groups. This marked the completion of Poland’s implementation of Council Directive (EU) 2022/2523, which establishes a global minimum tax level for multinational enterprise groups and large domestic groups in the EU, commonly referred to as the Pillar 2 Directive.
UAE
On 12 November, the Federal Tax Authority (FTA) released a corporate tax guide, outlining procedures and requirements for filing tax returns, with the first filings due by 31 December 2024. The guide contains detailed instructions on among others transfer pricing thresholds requiring disclosures only for related-party transactions exceeding AED 40 million, with additional thresholds for detailed reporting of transactions and connected persons. The guide also introduces rules for preapproval of transfer pricing adjustments that reduce taxable income and specific reporting requirements for free zone entities.
United Kingdom
- On 1 November, the UK First-tier Tribunal dismissed Syngenta Holdings Limited’s appeal in a corporation tax case involving the “unallowable purpose” rule under the Corporation Tax Act 2009. The taxpayer had claimed deductions for interest expenses on an intragroup loan used to fund the acquisition of shares in another UK company from its non-UK parent. HMRC argued, and the tribunal agreed, that the primary purpose of the loan was to secure UK tax deductions, making the interest expenses ineligible under the unallowable purpose rule.
- On 15 November, the Court of Appeal decided in the case in Refinitiv versus HMRC, which is a landmark case in the interaction of transfer pricing and Diverted Profits Tax (DPT). The dispute involved £167 million in DPT assessments for 2018, stemming from HMRC’s recalculations using a profit-split method, contrary to the Transactional Net Margin Method (TNMM) outlined in a 2013 Advance Pricing Agreement (APA) applicable for the period 2008–2014. Refinitiv argued that the TP method as agreed upon in the APA should still apply for the year under audit. The Court upheld the decision that the APA was limited to its explicit duration and statutory scope, emphasizing that extending its application beyond 2014 would undermine its purpose and legislative intent. This case highlights the importance for multinationals to adapt to evolving tax frameworks, offering critical guidance on the interaction between legacy agreements and newer regimes like DPT.
Final words
Thank you for taking the time to read this edition of our newsletter. I hope you found the insights and updates valuable. If you have any questions or would like further information on any of the topics covered, please do not hesitate to reach out to us.
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Best regards,
Adriaan van der Heijden
Director at Quantera Global
