Quantera Global news, developments, and blogs
Quantera Global news, developments, and blogs
- We have started with our pilot tool for Pillar Two. If you would like to join our pilot or have any questions about it, feel free to contact us here.
- On 16 June 2022, a blog was posted on our website about how to align your transfer pricing policy with Pillar Two, what preparations you need to make and forecasts for 2022. You can read the blog here.
- On 14 July we will host a webinar on recent developments in the field of Transfer Pricing and financial transactions, including the impact of the new Dutch TP decree. Interested? Please register via the registration link.
- From 30 June to July 2, Quantera Global Netherlands had its annual company outing, where we enjoyed a relaxing boat trip in the historic water village of Giethoorn and played various games such as Farmer’s golf, laser gaming and escape rooms. A great opportunity to get to know each other even better.
Quantera Global specialties
In the past month, we completed several challenging and interesting projects that are worth mentioning, such as:
- Setting up a Profit Split analysis and remuneration, including support for the implementation and preparation of the relevant intercompany agreements.
- We performed several financial transaction analyses, such as a debt capacity analysis, interest rate analyses for loan facilities and guarantee fee analyses. More information on this topic can be found here.
If you would like to know more about these topics, please feel free to contact us.
QG Academy Webinars
In 2020, we started hosting free-of-charge webinars on a variety of Transfer Pricing topics and we are continuing these webinars in 2022. We currently have the following webinars scheduled:
- 14 July: Financial Transactions
- 29 November: Outlook 2023
- 8 December: Outlook 2023 (2)
To register for one or more webinars, please visit our website https://www.quanteraglobal.com/group-sessions/.
You can watch our previous webinars here.
News from around the world:
Africa
On 14 June, the Africa Initiative published the 2022 edition of the Tax Transparency in Africa report. The aim of this report is to inform African countries of the latest developments and challenges in global transparency, so they can tackle tax evasion and other illicit financial flows.
China
The Shenzhen Tax Bureau and Shenzhen Customs published a joint notice on 18 May. The notice is intended to resolve the challenges regarding related-party imports. The notice sets up a collaborative management framework in which customs and tax authorities will work together to avoid double taxation on related-party imports.
Europe
- EU Member States could not reach an agreement on the proposal for a EU minimum tax directive during the Economic and Financial Affairs Council of the EU (ECOFIN Council) due to Hungary’s veto.
- On 1 June, the EFTA Court gave its decision in the case of PRA Group AS versus the Norwegian Tax Authorities. The EFTA Court ruled that the earning stripping limitation rules may be reduced to the extent that the debt/equity ratio and/or interest rate are in line with what would have been agreed with a third-party (i.e. at arm’s length).
France
On 16 June 2022, McDonalds concluded a settlement agreement for EUR 1.25 billion. McDonalds reached a settlement with the French tax authorities to avoid a legal case over alleged tax evasion. McDonalds is accused of artificially reducing its profits with license fees to avoid tax.
India
The Central Board of Direct Taxes of India has issued updated guidance for the mutual agreement procedure, with more clarity on the implications of the “Vivad se Vishwas” scheme and a new section requiring MAP applicants to provide full and truthful information, meaning applicants must provide all facts of the case that can materially affect the negotiation process.
OECD
On 9 June, the OECD published the transfer pricing country profiles of Egypt, Liberia, Saudi Arabia and Sri Lanka. The OECD’s country profiles provide up-to-date information on key aspects of transfer pricing legislation and practice.
The Netherlands
- The Dutch decree on rulings has been amended and has entered into force on 18 June 2022. Amendments have been made on the application of the EU sanction list in combination with beneficial owners and additional information has to be provided with regard to the global organisational and shareholder structure. Additionally, the other amendments consist mainly of editorial changes.
- On 1 July, a new Dutch Decree on Transfer pricing was introduced, replacing the 2018 decree. As most important and most elaborated change, we note the revised section 9 on financial transactions. However, there is more to discover, such as the cancellation of the indirect written approval of the lack of economic studies for MNE’s with a consolidated annual turnover of less than EUR 50 million. We will soon issue a more extensive overview of the main amendments.
United Kingdom
- The UK is postponing the implementation of the OECD Pillar Two Legislation. The new rules will apply to accounting periods beginning on or after 31 December 2023.
- Sneha Jain and Eric Edward (Quantera Global UK) wrote a blog on the developments in the UK regarding transfer pricing documentation. A summary is provided below.
The UK government is working to align TP documentation with the OECD guidelines regarding the master and local file requirements. The outlook is that from 1 April 2023, groups with a Country-by-Country Reporting (CbCR) obligation and UK operations must maintain a master file and UK local file. The proposed legislation will impose a 30-day deadline for the business to furnish the documentation following a request from HMRC. HMRC has promised that a detailed practical guidance will be accompanied with the legislation and that it will be broadly in line with the OECD requirements. Furthermore, it will include explanations with regards to the ‘Summary Audit Trail’ (SAT). The genesis of the SAT could be that quite often a misalignment exists between the expected documentation from the point of view of tax authorities versus taxpayer. This misalignment will be addressed by this new requirement. There is a fine balance between taxpayer’s transparency and disproportionate burden on the taxpayer. There will be another consultation at some point this year, which will invite views over the specific wordings of the bill.