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 world transfer pricing.
Please feel free to contact us if you have any questions.
Quantera Global news, developments, and blogs
- On 24 October, we published a blog on the relevant transfer pricing aspects for Chief Revenue Officers (CROs). You can read the blog post here.
- On 31 October, Rudolf Sinx, Managing Director at Quantera Global, presented a webinar on the increased scrutiny from Tax Authorities. Rudolf shared his view on TP documentation, audit support, APA, and MAP procedures. You can watch the webinar here.
Quantera Global specialties
In the past month, several challenging and noteworthy projects have been successfully completed, including:
- Assisting a medium-sized multinational in optimising their European transfer pricing model.
- Preparing transfer pricing documentation for a Dutch multinational family-owned business.
- Setting up a transfer pricing policy for a Dutch multinational regarding one of their business lines in the Middle East.
- Preparing a brand-license agreement.
If you would like to know more about these topics, please feel free to contact us.
News from around the world:
Australia
On 25 October, the Australian High Court upheld the decisions of the Federal court and Full Federal court, refusing the application for special leave to appeal and disallowing interest deductions of approximately USD 894 million. Following the Australian Tax Authorities’ assessment, the related terms and conditions of the loan notes were not considered at arm’s length. This shows the importance of adhering to the TP guidelines, particularly in determining arm’s length terms and conditions for financial transactions.
Austria
In Austria, the ultimate parent entity (UPE) can appoint an alternative Pillar Two taxpayer. For taxpayers whose book year is a calendar year, the appointment must be made by 31 December 2024, and proof must be uploaded in FinanzOnline.
Brazil
- On 1 October, Brazil published instructions for the submission of transfer pricing (TP) documentation on its digital platform, in line with the updated TP rules. This platform, the RFB’s official digital portal (e-CAC), will be used by taxpayers to submit their Master File and Local File documentation. These new rules introduced a three-tier documentation structure, including the Country-by-Country report, Master File, and Local File, which align with the OECD guidelines.
- On 3 October, Provisional Measure 1,262 was introduced, which includes an additional social contribution on profits, establishing Brazil’s qualified domestic minimum top-up tax (QDMTT). This aligns Brazil with the OECD’s global anti-base erosion (GloBE) rules, joining other countries in adopting Pillar Two standards.
Cyprus
On 25 October, the Cyprus tax department announced extended deadlines for submitting income tax returns with the table of summarized information (TSI). The new deadlines are 28 February 2025 for 2022 returns and 30 November 2025 for 2023 returns.
European Commission
On 28 October, the European Commission proposed extending the DAC measures to enable the exchange of Pillar Two global minimum tax information (DAC9). This would integrate the OECD’s GloBE information return into EU law, allowing member states to exchange relevant data.
France
On 10 October, France’s Finance Bill was published, including proposed tax increases for large companies, a corporate surtax, special shipping company contributions, and a tax on share buy-backs. It also updates Pillar Two rules and implements the DAC 8 directive on crypto assets.
Germany
- On 17 October, Germany’s Ministry of Finance published a notification form for registering the Pillar Two minimum tax group leader. The form centralises top-up tax payments and filing obligations at the group leader level. The start date for filing is 2 January 2025 and the registration must be submitted electronically by 28 February 2025, for calendar-year taxpayers.
- On 18 October, Germany’s Bundestag passed the Annual Tax Act 2024, covering Pillar Two rules, restructuring, CFC taxation, and other tax measures. The bill awaits approval by the Bundesrat on 22 November. Other updates include the Fourth Bureaucracy Relief Act and BEPS MLI treaty changes.
Hungary
On 29 October, Hungary’s autumn tax package was released, including amendments to global minimum tax rules, requiring more detailed data reporting.
Isle of Man
On 24 October, the Isle of Man announced the implementation of the OECD Pillar Two global minimum tax, effective from 1 January 2025. Draft legislation will be reviewed in November and an online platform for filing obligations will be introduced.
Italy
On 10 October, the Supreme Court dismissed an appeal from an Italian manufacturing company challenging a tax assessment that replaced its use of the Comparable Uncontrolled Price (CUP) method with the Transactional Net Margin Method (TNMM). The Italian tax authorities deemed the TNMM more appropriate due to the company’s limited risk profile and pre-confirmed orders. While the company argued that the CUP Method could be applied, the Court upheld the tax assessment of the tax authorities.
Ireland
On 11 October, Ireland’s Finance Bill introduced key tax measures, including a participation exemption for foreign dividends from EU/EEA and treaty jurisdictions, Pillar One Amount B rules, and updates to Pillar Two rules. Other changes include increased R&D tax relief and improvements to investment incentives. The rules will apply as of 1 January 2025.
Malta
On 28 October, Malta’s 2025 Budget Speech confirmed the deferred application of the IIR and UTPR under Pillar Two, with no introduction of IIR, UTPR, or DMTT in 2025. Only administrative requirements for the EU Minimum Tax Directive were transposed.
Netherlands
On 4 October, the Court of Justice EU ruled that the Dutch rules on limitation on interest deduction are permissible under EU law, as it justifiably combats tax fraud and evasion. Even if the terms and conditions of a loan transaction are at arm’s length, the set-up may sometimes still be considered as an artificial or fictitious arrangement.
New Zealand
- Inland Revenue New Zealand has released its updated Multinational Enterprise Compliance Focus 2024, the first update since 2019. This document outlines key compliance areas for multinationals in New Zealand, highlighting risk indicators and areas for improvement, with a strong focus on adherence to local tax rules and New Zealand-specific transfer pricing.
- On 29 October, the Pillar Two GloBE rules were enacted, requiring MNEs with global turnover over €750 million to pay a 15% minimum tax. Local companies must adhere to specific filing and registration requirements, with penalties for non-compliance.
OECD
On 24 October 2024, the OECD released a report on international tax reform, highlighting progress on the two-pillar solution, BEPS minimum standards, and updates on tax policy, inequality, and administration.
Poland
Poland has submitted draft legislation to implement the EU Minimum Tax Directive to the lower house of parliament. The rules are expected to be implemented as of 1 January 2025.
United Kingdom
On 30 October, the UK announced that the UTPR will be included in the Finance Bill 2024-2025, effective as per 31 December 2024. The bill also includes technical amendments to top-up tax rules and anti-arbitrage measures for CbC reporting.
Final words
Thank you for taking the time to read this edition of our newsletter. I hope you found the insights and updates valuable. If you have any questions or would like further information on any of the topics covered, please do not hesitate to reach out to us.
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Best regards,
Adriaan van der Heijden
Director at Quantera Global
