The General Financial Directorate (D-10) has issued the new Decree related to Low Value Adding Services took into effect on January 1, 2013 and it will relief qualifying taxpayers from preparation of full-phase transfer pricing documentation and benchmarking analysis with the mark-up on the service costs desired to be in the range of 3% -7%. D-10 covers both domestic and cross-border intra-group services with a low value adding nature that do not construct a core business activity of the service provider, represent routine functions, and do not represent substantial cost or income for the parties concerned.
The decrees that were previously issued containing the use of international standards for taxation of transactions between related parties (D-332), advance pricing agreements (D-333) and the scope of transfer pricing documentation (D-334) have been followed by Decree D-10. The new decree D-10 is particularly based on the EU Joint Transfer Pricing Forum (EU JTPF) paper naming “Guidelines on Low Value Adding Intra-Group Services”.
