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Quantera Global Newsletter – July 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:

  • COVID-19 APA
    We supported one of our clients in realizing the first APA of the Dutch Tax Authorities where the effects of COVID-19 are agreed upon. For more information we refer to our blog

 

  • QG Academy Webinars

In 2020 we started hosting free-of-charge webinars on a variety of Transfer Pricing topics. Because this turned out to be an instant success, we will continue these webinars throughout 2021. We currently have the following webinars scheduled:

  • 14 July: Phenomena of Valuations in Transfer Pricing
  • 22 July: Time to save budget & time
  • 26 August: Time to save budget & time (re-run)
  • 9 September: 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 our previous webinars here.

News around the world:

  • The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (IF) has agreed a two-pillar solution to address the tax challenges arising from the digitalisation of the economy. Please see the following link.

 

Argentina

  • Argentina has published COVID-19 related relief measures for tax years 2020 and 2021:
    • The due date for filing transfer pricing reports for 2020 and 2021 has been extended to the ninth month after the end of the tax year.
    • A simplified regime is introduced for international operations that meet certain conditions.
    • Submitting a master file. A Master File must be submitted when the consolidated group revenue exceeds 4 billion ARS and transactions with related parties exceeds 3 million ARS in total or 300,000 ARS for at least one group company.
  • Argentina introduces a progressive corporate income tax for tax years beginning 1 January 2021. The 30% fixed rate will be replaced and depending on the amount of taxable income, the CIT rate will be between 25% and 35%. Withholding tax on dividends will increase from 7% to 13%.

 

Armenia
Armenian tax authorities request transfer pricing documentation to select taxpayers for transfer pricing audits. According to the Armenian tax law, TP documentation must be provided within 30 working days upon request of the tax authorities.

 

Azerbaijan
Country-by-country reporting update: CbCR Report for the tax year 2020 needs to be submitted on 31 December 2021 unless the tax authorities specifically request the CbCR report.

 

Australia
The Australian tax authorities have published guidance on the impact of the COVID-19 pandemic, which focuses on whether the presence of workers in Australia creates a permanent establishment. This new approach is applicable until 31 December 2021.

 

Canada
Revised Information Circular on Mutual Agreement Procedures has been published by Canada’s Internal Revenue Service. The main changes relate to the mutual agreement procedures and the dispute resolution.

 

Cyprus
The Netherlands and Cyprus signed an income tax treaty on 1 June 2021. The income tax treaty is intended to prevent double taxation and the prevention of tax avoidance and evasion.

 

Denmark
Denmark has published a draft law (for consultation until 18 August 2021) that should reduce transfer pricing documentation requirements with regard to intercompany transactions between Danish companies. The draft law should impact tax years starting on 1 January 2021 or later.

 

Finland

  • Finnish court accepts US GAAP as a basis for transfer pricing. The court also indicated that loss-making comparable companies do not have to be rejected when determining the business margin of a low-risk distribution company.
  • The Finnish tax authorities have released statements on the impact of COVID-19 on permanent establishment rules and transfer pricing guidelines.

 

Germany
Germany introduces new transfer pricing rules effective from fiscal year 2022. Main items include:

  • Hierarchy of TP methods to be abolished.
  • Introduction of a compulsory DEMPE analysis in view of IP ownership.
  • Under certain conditions the transfer of relevant intangibles will be subject to an adjustment payment.

 

Jordan
Jordan has introduced transfer pricing rules, effective 7 July 2021. It involves taxpayers entering related party transactions above JOD 500,000 per year.

 

Kenya
Kenya proposed a country-by-country reporting obligation in the 2021-2022 budget. The CbCR obligation should be effective from 1 January 2022.

 

Luxembourg
The Luxembourg tax authorities have issued guidance on interest limitation rules. It provides an “equity escape clause” which allows taxpayers (if conditions are met) to deduct the full amount of the exceeding borrowing costs.

 

Qatar
Qatar has extended the deadline for filing Master files and Local files for fiscal year 2020 to 30 September 2021. The deadline for filing tax returns and transfer pricing declarations is unchanged.

 

Spain

  • The Spanish tax authorities have issued draft guidelines for filing the digital services tax declaration. The first digital services tax declaration should be filed in July 2021 for the first and second quarters of 2021.
  • The Spanish government changes the MAP rules for tax and transfer pricing disputes. The main purpose for the changes is to make the MAP procedure more accessible and align the Spanish legislation with EU law and BEPS Action 14.

 

Singapore
Inland Revenue Authority of Singapore has updated its guidance to clarify the GST treatment of transfer pricing adjustments and has furthermore provided an administrative concession.

 

Switzerland
Swiss Supreme Court has ruled on the application of a transfer pricing method and has expressed a preference for the application of a cost-plus method with regard to certain support services.

 

Taiwan
Taiwan has issued a decree related to the implementation and negotiation of Bilateral Advance Pricing Agreements (BAPA). The decree provides additional information regarding the BAPA process and implementation.

 

United States
The US House has accepted legislation to require public country-by-country (tax) reporting. Multinational companies are required to disclose their taxes paid and other key financial information publicly on a country-by-country basis.