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Quantera Global Newsletter – October 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 team update

We are happy that as of September, Esmee van Heeswijk and Nienke de Louwere have joined the Dutch Quantera Global team. Esmee is 24 years old and is currently a Master Student Tax Law at the Tilburg University. Nienke is 24 years old and recently started her final year of the bachelor Tax Law at Tilburg University. Welcome to Quantera Global Esmee and Nienke!

  • Quantera Global specialties

In the past month, we performed several challenging and interesting projects worth mentioning, such as:

  • We successfully defended our benchmark studies. These were part of a more general audit by the Dutch Tax Authorities and included a comparison of the consistency between the studies of four years ago and those of one year ago.
  • We obtained an innovation box ruling.
  • We provided a client with an overview of the Transfer Pricing requirements that apply to them in the various jurisdictions in which they operate, and the special attention points and deadlines.

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

News around the world:

  • Australia

The Australian Taxation office states that it does resign itself to the outcome of the Glencore case rendered by the Federal Court of Australia. According to the ATO, reaching arm’s length conditions requires a careful examination of all available evidence.

  • Botswana

On 1 September 2021, the Commissioner General issued a blanket ruling ending the obligation for taxpayers to prepare and file transfer pricing documentation when the “cumulative arm’s length value” of parties related transactions in a tax year does not exceed BWP 5 million. This ruling is effective retroactively from fiscal year 2020.

  • European Commission

In 2019, the General Court stated that the European commission had not substantiated its claim that Belgium was granting state aid. In its September decision, the Court of Justice stated that the annulment of the decision of the European Commission, which was made by the General Court, was incorrect and contained several errors of law. The Court of Justice therefore refers the case back to the General Court for a ruling on those aspects of the case.

    • Finland
    • Finland proposes to revise transfer pricing adjustments in order to align the Finish transfer pricing rules with the OECD transfer pricing guidelines. The changes would come into force in early 2022.
    • Supreme Administrative Court, vs A Oy: The tax authorities calculated the remuneration of a routine service for all local companies at a level of 4.5%. The interquartile range of the benchmark study was 1.1% to 8.4%. The conclusion of the Finnish Supreme Administrative Court is that if a taxpayer remains within the interquartile range of a valid benchmark study, the tax authorities may not make an adjustment to a different percentage.
  • India

On 24 September 2021, the Indian tax authorities announced that the existing safe harbour rules of FY 2019-2020 will also be applicable for FY 2020-2021 without any change.

  • Ireland
    Ireland clarified transfer pricing rules for ‘section 110’ companies which enjoy a neutral tax regime. The update concludes that the arm’s length test is a requirement for all transactions between associated persons which apply to chargeable periods beginning on or after 1 January 2020.
  • Mexico

Mexico has published a decree that will be submitted to parliament for review, and which contains important changes to the applicable transfer pricing rules. Items that will be changed once agreed upon by parliament are TP documentation requirements, comparable company information, domestic intercompany transactions, and permanent establishments.

  • Namibia

Under Namibian transfer pricing provisions, the Minister of Finance is empowered to adjust the liability of a taxpayer where a particular action is intended to avoid or postpone the tax liability of income tax. A particular situation arises when a transaction has created rights that would not have been created had the arm’s length principle been followed

  • The Netherlands

The State Secretary of Finance has submitted a bill that implements the tax liability measure of ATAD2. The tax relief for revenue which can be allocated to participants in a state which classifies the entity as transparent will only be granted if the excluded revenue is taxed with the participants.

  • Norway

Norway has published a public consultation paper regarding changes for cross-border restructurings without tax implications.

  • Peru

In the absence of an agreement between Peru and the United States on the automatic exchange of country-by-country reports, the U.S. demanded a ‘’secondary filing’’ from multinationals with headquarters in Peru and a subsidiary in the United States. The deadline for compliance lays around mid-October, the exact date depending on the tax identification number of each entity.

  • Taiwan

The Taiwanese Customs Bureau has issued guidelines to clarify the customs requirements for a taxpayer wishing to perform a transfer pricing adjustment on imported goods. Therefore, it may be necessary for enterprises to assess whether changes on transfer prices on imported goods are required.

  • United States

Large organisations are urging the US Financial Accounting Standards Board to prioritize public country-by-country tax reporting. According to the initiating companies, adding such information will make a positive contribution to the risk and value assessment of investors.