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Quantera Global Newsletter – June 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:

  • Quantera Global strengthens strategic position with Censio Tax in Sweden

Quantera Global is proud to announce its strategic partnership with Censio Tax, a Swedish professional services firm specialising in transfer pricing advisory. This alliance will leverage the companies’ respective strengths in transfer pricing advisory to empower MNEs with appropriate, tailor-made transfer pricing solutions. You can read more about our new strategic partnership with Censio Tax by clicking on the following link.

 

  • Blog on recent developments in intercompany financial transactions

In recent years, tax authorities have become increasingly interested in the Transfer Pricing aspects of financial transactions. If you want to know more about some recent (court) developments, you can read our blog on this topic here.

 

  • Quantera Global wins GAE Award

Global Advisory Experts (GAE) has recognised Quantera Global in its Annual GAE Awards for 2021. Quantera Global was chosen as the winner of International Transfer Pricing Advisory Firm of the Year in the Netherlands – 2021, for providing a high level of specialisation. You can read the press release by clicking the following link.

 

  • QG Academy Webinars

In 2020 we started hosting free-of-charge webinars on a variety of Transfer Pricing topics. This became an instant success. Therefore, we will continue these webinars in 2021. We currently have the following webinars scheduled:

  • 8 June: Tax and Treasury: it takes 2 to tango (with ING, Zanders and AS Watson)
  • 1 July: Transfer Pricing Developments Poland, Germany, Austria and The Netherlands
  • 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:

  • Argentina

The Argentinian tax authorities announced that it will provide three additional months for taxpayers whose fiscal year ended in 2021, to comply with their Transfer Pricing studies and Form 2668 obligation. The original deadline was set in June and has thus been extended to September 2021. Furthermore, the tax authorities have published guidance for controlled transactions during the COVID-19 pandemic.

 

  • Australia
    • On 12 May, the Australian Tax Office (‘ATO’) amended its guidance on permanent establishment in the wake of COVID-19. The amendment focusses on situations in which employees are forced to remain in Australia because of extraordinary circumstances.
    • On 19 May, the ATO released its compliance approach that amongst others covers the tax risks in connection to Transfer Pricing arrangements regarding intangible assets.

 

  • Canada

In its 2020 APA Program Report, the Canadian Revenue Agency has indicated that the completion time for an APA in 2020 dropped to 37 months, compared to 51 months in 2019.

 

  • Costa Rica

Costa Rica has joined the OECD as its 38th member and the 4th member in the Latin American and Caribbean region.

 

  • Denmark

The Danish High Court recently ruled in two “Beneficial Ownership” cases. Although the cases can still go to the Supreme Court, it provided more insight on the effect of anti-abuse rules to complicated group structures and stressed the consequences of companies in this structure that are solely deemed to channel through dividends.

 

  • EU

On 12 May, the General Court of the European Union ruled in two important state aid cases (the European Commission (‘EC’) versus Amazon and ENGIE). The first case was ruled in favour of Amazon. The EC was unable to prove that Amazon’s Transfer Pricing methodology created an unfair advantage, which is one of the determining factors in EU’s state aid law. In the second case the EC was able to prove that a Luxembourg tax ruling created an unfair advantage for ENGIE.

 

  • Finland

The Finnish Supreme Administrative Court concluded that the cost-plus pricing method was the most appropriate method for assessing intra-group services that were provided in 2009, including financial services.

 

  • India
    • On 3 May, the Indian government announced the thresholds that non-residents have to consider for having a taxable presence in India under the new “significant economic presence rules”. Companies can either have a significant economic presence when the transaction total is at least 20 million INR, or when the companies have more than 300,000 users. However, in many instances the new rules will be overridden by the bilateral tax treaties.
    • The Indian government has also extended certain tax filing deadlines due to the COVID-19 pandemic.

 

  • Malaysia

The tax authorities in Malaysia have announced that taxpayers can file their CbCR information by means of the electronic ‘C form’.

 

  • OECD
    • Although certain countries have lately scrutinized the Global Minimum Tax plans, the OECD’s Director of the Centre for Tax Policy and Administration, Pascal Saint-Amans, said that this will not stop countries from reaching an agreement. An agreement is still expected later this year.
    • In the newest round of BEPS Action 14 Peer Reviews, Greece, Hungary, and Slovakia were found to fall short on the dispute resolution goals by failing to timely resolve MAP procedures. Iceland’s lack of a bilateral APA program means that the country also falls short in this regard.

 

  • Poland

The amended protocol for the Dutch-Polish tax treaty, that was agreed upon in October 2020, has been sent to the Dutch States-General. Changes were made in part to align the tax treaty to the OECD’s minimum standard regarding the BEPS-project.

 

  • Puerto Rico

The Puerto Rico Treasury Department has issued guidance on Transfer Pricing studies that support the amount of intercompany expense charges. Such studies form an exemption on the rule that 51% of intercompany expense charges are not deductible.

 

  • Qatar

The tax authority of Qatar recently released a list with FAQs concerning Transfer Pricing compliance and documentation requirements.

 

  • Singapore
    • On 3 May, Singapore and Serbia announced that the two countries have signed a new bilateral tax treaty.
    • The tax authority of Singapore recently released Transfer Pricing guidelines on centralised services and also ruled on the characterization of two hybrid instruments. Based on the key features of the securities, the authorities determined that the instruments qualify as debt securities.

 

  • South Africa

In two interpretation notes, the South African Revenue Service recently provided insight in the application of withholding taxes that apply to interest and royalties.

 

  • Taiwan
    • On 6 May, the Taiwanese tax authority provided a list of potential rewards that aim to assist companies in complying with their tax obligation if they provide the relevant documents electronically.
    • On 20 May, the Taiwanese tax authorities announced that it will impose penalties on certain foreign providers of digital services that do not meet the required filing deadline of 30 June. Foreign providers that provide these services and do not have a Permanent Establishment in Taiwan or are not subject to withholding taxes, are required to file an income tax return.

 

  • United States

On 28 May, the United States Department of Treasury released their ‘Green Book’. This document includes detailed explanations for the tax proposals that the Biden Administration is set to enact in the next year. These proposals include, amongst others, substantial changes regarding international tax rules for corporations and a corporate tax rate increase.