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 and Developments
- We have launched the fifth episode of our podcast “The Transfer Pricing Method”, entitled “Germany’s Transfer Pricing Shift: Upcoming Global Implications for Transparency and Compliance”. The episode is now available on Spotify, YouTube, and on our website.
Quantera Global Specialties
In the past month, several challenging and noteworthy projects were successfully completed, including:
- An in-house transfer pricing documentation project, initiated in early January, for which one of our team members worked on-site to support the client directly.
- We submitted a request for the extension of an APA (Advance Pricing Agreement) to support our client’s transfer pricing strategy further.
- A full-fledged (financial) guarantee analysis, supporting an at arm’s length guarantee fee to be charged by the guarantor.
If you would like to know more about these topics, please feel free to contact us.
Quantera Global Blogs
- On 2 May, we published a blog on location-specific advantages, which covered the OECD guidelines, the UN manual, and court cases on this topic. You can read the blog here.
- On 13 May, we published a blog post summarising our fourth podcast episode on the growing significance of operational transfer pricing (OTP), the challenges organisations face and how businesses can optimise their OTP processes to ensure accuracy and efficiency. You can read the blog here.
- On 23 May, we published a blog on Transfer Pricing Forms and their increased importance. You can read the blog here.
News from around the world:
Australia
- On 16 May, the Australian Taxation Office (ATO) released updated guidance on the Pillar Two minimum tax rules. This includes information on how to calculate top-up tax, what filing and payment obligations apply, and how the rules affect specific entities. It also provides insights into how the rules interact with other tax provisions.
- On 29 May, the ATO published draft guidance on determining an arm’s length amount of related-party debt. The guidance also categorises taxpayers and scenarios into different risk levels.
Bahrain
Bahrain’s National Bureau for Revenue (NBR) has released a new guide outlining the general principles and administrative aspects of the domestic minimum top-up tax (DMTT) under Pillar Two.
Czech Republic
On 25 May, the Czech Supreme Administrative Court rejected Inventec’s appeal in a transfer pricing dispute. The court confirmed the tax authorities’ use of a profit level indicator including material costs (ROTC) over Inventec’s preferred method excluding them, emphasising the importance of proper functional analyses and correct entity and transaction qualifications.
Denmark
On 21 May, Denmark’s Supreme Court rejected the tax authorities’ income adjustments, concluding that there was insufficient argumentation to argue that the transfer pricing documentation was significantly deficient. Additionally, the Court ruled that the pricing for some of the sales companies outside of the mentioned interquartile range, was not necessarily proof that the pricing was not at arm’s length, considering that information on only a limited number of comparables was available.
European Union
On 6 May, the EU published Council Directive (EU) 2025/872 (DAC9) in its Official Journal. The directive establishes a framework for the exchange of Pillar Two information among member states. It became effective on 7 May, marking a key step in enhancing tax transparency and cooperation within the EU.
Hong Kong
On 28 May, Hong Kong’s Legislative Council approved a new law to implement Pillar Two global minimum tax rules. The law will be published on 6 June and be affective as of 1 January 2025.
Mexico
On 26 May, Mexico’s Tax Administration Service announced a significant increase in tax collection from large taxpayers during 2019–2024 compared to 2013–2018, largely due to enhanced audit strategies.
Netherlands
- On 22 May, the Dutch Tax Authorities published the 2024 report on international tax rulings. This included rulings, (B)APAs and innovation box rulings with both large and small taxpayers, providing clarity and certainty on tax treatment through agreements with the tax authorities. The report contains details of recent developments, including prefiling/filings for a ruling regarding the implementation of Pillar Two in The Netherlands.
- On 26 May, the Dutch Tax Authorities published the 2024 MAP report. The number of cases received increased by 37% compared to 2023. Despite the increase in cases, most were resolved within 24 months. The report covers dispute resolution on double taxation and key figures from the past year.
OECD
On 22 May, the OECD released updated transfer pricing country profiles for 11 jurisdictions and introduced new profiles for Azerbaijan and Pakistan. These updates include information on hard-to-value intangibles and information on the simplified approach for baseline marketing and distribution activities.
United States
In May, the U.S. Tax Court ruled that the “income method” was the most appropriate way to value Facebook US’s 2009 transfer of intangibles to its Irish affiliate. However, the court reassessed certain valuation parameters, resulting in a revised valuation of $7.8 billion (versus the IRS’s $19.9B). While the case confirms the IRS’s use of the ‘income method’, it also stresses the importance of using reasonable assumptions.
Final words
Thank you for taking the time to read this edition of our newsletter. I hope you found the insights and updates valuable. Do you have any questions or need further information? Contact us today to get expert advice on worldwide transfer pricing matters and developments.
If you have not already done so, subscribe to our Quantera Global newsletter here and join over 2,000 finance and tax leaders in receiving our newsletter, webinar invitations, latest trends, and sneak peeks into the world of transfer pricing in your inbox every month.
Best regards,
Adriaan van der Heijden
Director at Quantera Global
