In this Newsletter we would like to keep you up to date on relevant Transfer Pricing developments in an accessible manner.
We are pleased to keep you informed about 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.
You may send an e-mail to firstname.lastname@example.org or call us at +31 88 221 5800 and we will introduce you to the relevant professional.
Developments and blogs:
- Corona virus and transfer pricing
- OECD publishes advice on business continuity considerations for tax administrations
- The OECD made an analysis regarding the Corona measurements per country for tax purposes. Amongst others, the OECD does not consider a permanent establishment will be present when directors and employees are working from home due to the Corona virus.
- OECD publishes reports on cross-border tax dispute resolution
- The OECD has published whether countries were compliant to the minimum standard introduced by the OECD BEPS project. Luxemburg, Germany, Austria, Sweden, Italy, France and Liechtenstein were assessed. Most countries are largely compliant, but some countries require specific modifications.
- Portugal has made amendments to its transfer pricing legislation
- New rules for documentation requirements, APAs and penalties have been published. For more information, please read our blog here.
News around the world:
- Czech Republic: Czech Republic has published country specific rules for the COVID-19 pandemic regarding transfer pricing.
- Denmark: the Danish Ministry of Taxation has provided an extension of the filing date of amongst others Transfer Pricing Documentation.
- Finland: the court in Finland ruled two times in favour of taxpayers. In one decision a sales company chose a group’s contract manufacturer as the tested party for its transfer pricing documentation. The tax authorities disagreed and stated the taxpayer’s choices diverged from the group’s transfer pricing documentation. The court ruled in favour of the sales company’s chosen strategy. In the second case, the court ruled that under Finnish transfer pricing rules it was not allowed for the tax authority to ignore the taxpayers chosen structure.
- Hongkong has published a memo regarding the taxation of the Digital Economy, Electronic Commerce and Digital Assets. This memo includes amongst others practical guidance, including on permanent establishments, and determination of the tax base.
- Hong Kong has published a revised guidance concerning the government’s interpretation regarding tax rulings.
- India: India has announced an equalisation levy of 2%. This levy will, amongst others, apply to e-commerce sales and services by non-resident operators to Indian customers.
- Indonesia: new rules for APAs have been published. Including a simplification of the process and the opportunity to renew APAs.
- Netherlands: to ensure liquidity of companies during the crisis, a company is now allowed to take into account the expected losses over 2020 for determining the taxable profits of 2019. It is allowed to form a ‘Corona reserve’.
- Poland: the Tax authority in Poland has published a new, more interactive, Transfer Pricing form (TPR-C). This form has more possibilities to add information, such as more countries as locations for contractors.
- Seychelles: Seychelles has published a new CbCR-form., which is more in line with the OECD standard.
- South Africa: South African Revenue Service (SARS) has published specific rules to (financially) cope with the Corona virus. However, no extensions will be given to taxpayers.
- South Korea: South Korea has implemented new transfer pricing rules as of January 1, 2020. A diverted profit tax has been implemented, specific rules have been laid down for low value adding services and the compliance burden of taxpayers.
- Sweden: new jurisprudence determines that if a taxpayer voluntarily provides the tax administration information and this information is inaccurate, the taxpayer has to pay a (relatively large) fine for this misinformation.
- Turkey: in February Turkey has announced to implement the BEPS Action 13 reporting requirements. Subsidiaries in Turkey will have to file a CbC report separately in Turkey. Through a CbCR notification the tax authorities are notified which entity will be handling the CbC report in Turkey.
- United Kingdom: adjusted draft legislation has been published for digital services tax. The draft legislation includes several topics such as the determination of the tax base and applicable thresholds. The tax rate will be approximately 2% of the total UK digital service revenue.
- United States: the US Department of Treasury has released guidance and frequently asked questions regarding transfer pricing documentation and best practices. Mainly unforeseen business circumstances are discussed.
Quantera Global Academy:
• Due to the measures in relation to the Covid-19 virus no group sessions will be organized at the moment. We have organized webinars instead.
• Please find the recordings of our webinars here.