Quantera Global Newsletter – June 2024 Schedule a call

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    Quantera Global Newsletter – June 2024

    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 transfer pricing world.
     

    Please feel free to contact us if you have any questions. 

    Quantera Global news, developments, and blogs

    • We are proud to introduce Jade van Veelen as one of our new colleagues. Welcome to the team Jade!  
    • On 1 May 2024, together with Coperitas we hosted a transfer pricing session at Erasmus University Rotterdam, welcoming an energetic group of tax students, diving into the world of transfer pricing as part of their Honours program. 
    • On 2 May 2024, we published a blog highlighting the importance of establishing a solid transfer pricing policy for scale-ups. Investing in a thorough and strategic approach to transfer pricing is critical for sustainable growth and global competitiveness. You can read the blog here. 
    • On 30 May, we published a blog exploring the Transactional Net Margin Method (TNMM), its function, application, advantages, disadvantages, and popularity due to data availability and practicality, ultimately highlighting its importance in ensuring arm’s length transactions between related entities in transfer pricing. You can read the blog here 

    Quantera Global specialties

    In the past month, we have completed several challenging and interesting projects worth mentioning, including:  

    • Full preparation of a CbCR file and reconciliation of the CbCR file with the client’s reports and financials. 
    • Providing audit support to one of our clients in Germany. 
    • Credit rating analyses and interest rate benchmark studies.  

     

    If you would like to know more about these topics, please feel free to contact us or to schedule a call. 

    News from around the world:

    Belgium 

    The Belgian tax administration requires large companies with a presence in Belgium to submit a Pillar Two notification form by 13 July 2024. This registration is mandatory for compliance with the new Pillar Two rules. The form gathers extensive group information including financial data and the ownership structure.  

     

    Crown dependencies 

    Isle of Man, Guernsey, and Jersey have released details regarding their commitment to the OECD Pillar Two project. Each island is opting for a different approach on the implementation of the Pillar Two rules.  

     

    Cyprus 

    Cyprus tax department released the “Table of Summarised Information” (TSI) form for 2022 on 6 May 2024, imposing a new transfer pricing reporting requirement for taxpayers engaged in related party transactions. The submission deadline has been extended to 30 November 2024. 

     

    Japan 

    On 26 April 2024, the National Tax Agency issued guidance on the income inclusion rule (IIR), introduced as part of the 2023 tax reform to implement the Pillar Two global minimum tax. This rule will apply to Japanese companies from fiscal years starting on or after 1 April 2024. 

     

    Kenya 

    The new Finance Bill in Kenya proposes significant tax framework changes, including the implementation of a minimum top-up tax of 15% for resident entities or entities with a permanent establishment in Kenya who are part of a multinational group with a consolidated annual turnover of €750 million in at least two of the previous four years. 

     

    Malaysia 

    The Malaysia Inland Revenue Board (MIRB) updated its advance pricing arrangement (APA) guidelines to align with new rules issued in 2023. The changes include stricter eligibility criteria, especially concerning profit margins based on benchmarking analyses. For stable businesses, margin reductions exceeding 3% over five years are scrutinized, while for those with changing functions, a 5% margin drop may be unacceptable without significant shifts in operations. 

     

    Norway 

    On 2 May 2024, Norway has implemented the Pillar Two global minimum tax rules, effective from 1 January 2024, as outlined in the Supplementary Tax Act. The rules, introduced following a public consultation paper issued by the Norwegian Ministry of Finance in June 2023, impose significant reporting obligations on covered groups. The first reporting deadline, for the income year 2024, is June 2026, with subsequent deadlines set at 15 months from the end of the financial year. 

     

    OECD 

    • The OECD released a statement on BEPS, following the 16th meeting held from 28-30 May 2024. It highlighted the negotiations on a final package for Pillar One are almost completed, including a Multilateral Convention (MLC) for Amount A and a framework for Amount B. The goal is to open the MLC for signature by the end of June.
       
    • The OECD updated its guidance on Country-by-Country reporting (CbCR) under BEPS Action 13, focusing on the treatment of dividends. The May 2024 update clarifies that payments received from other Constituent Entities and treated as dividends in the payer’s tax jurisdiction are excluded from “Profit (Loss) before Income Tax” in Table 1 of the CbC report. This aims to ensure consistent treatment across jurisdictions and applies to all reporting fiscal years of MNE groups beginning on or after 1 January 2025. In addition, income taxes accrued or paid on these excluded dividends should not be reported in the relevant tax columns. 

     

    The Netherlands 

    On 28 May 2024, the Dutch tax authority published its annual report on (B)APAs and tax rulings, summarizing its relevant statistics for the year 2023.  

     

    Switzerland 

    Swiss cantons have adjusted their tax rates or initiated projects to enhance attractiveness following the enactment of the Pillar Two global minimum tax. Some examples:  

    • Canton of Schaffhausen implemented a progressive corporate tax rate for profits exceeding CHF 15 million, with an effective tax rate of 15% from 2024. 
    • Canton of Geneva increased its effective corporate tax rate to 14.7% and abolished municipal business tax. 
    • Canton of Grisons proposed a bill favoring companies boosting value creation, research, innovation, or environmental sustainability. 

     

    UAE 

    UAE has released additional guidance on the requirements for qualified Free-Zone persons including TP documentation. You must qualify as a Free Zone person to make use of the 0% tax rate. Requirements can be time sensitive. 

     

    United Kingdom 

    HMRC has issued guidance for registration under the UK’s Pillar Two regime, detailing requirements for in-scope multinational groups. Published on 20 May 2024, the guidance outlines registration deadlines, and necessary details. Key points include: 

    • Registration Deadline: the Ultimate Parent Entity (UPE) or a nominated entity must register within six months from the end of the first relevant accounting period starting after 31 December 2023. 
    • Required Details: information includes UPE details, company registration number, confirmation of UK and/or international entities, accounting period dates, and contact information. 
    • Submission of Top-Up Tax Returns: first returns must be filed by 30 June 2026, or 18 months after the group’s accounting period end, depending on the reporting period. 

     

    Subscribe to extended Quantera Global newsletter by email. Here is the link to join 2000+ finance and tax leaders who get our newsletter, webinar agendas, latest trends and sneak peaks into the transfer pricing trends by mail. 

     

    icon Theo Elshof
    Managing Director

    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.