Taiwan: Transfer Pricing Rules: As per the amendments to the Regulations governing assessment of profit-seeking enterprises, it is mandatory to apply the arm’s length principle in the attribution of profits in a business restructuring provided some factors are taken into account in determining profits.
Advance Pricing Agreement (APA) Rules: Companies considering the application of an APA can apply for a pre-filing meeting under the amended TP Assessment Rules. The tax authority should complete the pre-filing meeting within 3 months of the application date. As per the amended TP Assessment Rules; a taxpayer may apply for an APA if the total value of related party transactions amounts to more than TWD 500 million or TWD 200 million per year.
Reference of Profit-Split Methods: By reference to the OECD Transfer Pricing Guidelines, the amended TP Assessment Rules have included another appropriate situation to which the profit split method may be applicable in the transfer pricing analysis where each participant to the controlled transaction makes unique and valuable contributions to the controlled transaction.
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Nigeria: General Rule for CbC Reporting Requirement: Nigeria has signed the Multilateral Competent Authority Agreement (MCAA) for implementing the exchange of country-by-country (CbC) reports and will be entitled to receive CbC reports of multinational enterprises (MNEs) having their headquarters in one of the other MCAA partner countries. The CbC reports will include information such as a summary of income earned and tax paid, and the number of employees deployed by MNEs across the different jurisdictions of operation in a tax reporting period. Companies will be required in 2017 to submit CbC reports on “controlled transactions” conducting during the 2016 financial year. Also, it is most likely that Nigeria will provide rules that will facilitate the exchange of similar information with co-signatories.
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Portugal: General Rule for CbC Reporting Requirement: The government of Portugal has introduced the mandatory reporting of financial and tax information statement of multinational groups or country-by-country report (CbCr) in the draft State Budget for 2016. Multinational groups where the ultimate parent company is a resident in Portugal would be required to submit country-by country reports if the consolidated turnover exceeds €750 million. This measure follows the Action 13 of the OECD BEPS project and implies that the eligible groups to report information about their activity by country, including gross income, pre-tax profits, retained earnings, IRC amount due and payable, capital, number workers, tangible assets, entities in each country and their activities.
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Romania: Documentation Requirement: As per the Order no. 442/2016 published by the National Agency for Fiscal Administration (ANAF), “large taxpayers” engaged in transactions with related parties, having a total annual value determined by reference to the value of transactions conducted with all related parties, excluding value added tax (VAT) must prepare transfer pricing documentation on an annual basis. The materiality threshold represents the total value of international transactions excluding Value Added Tax (VAT).
Documentation Format: Order no. 442/2016 published by the National Agency for Fiscal Administration (ANAF) required the format and content of transfer pricing documentation should be as per Chapter V of the OECD Transfer Pricing Guidelines on documentation.
Documentation Threshold: As per the Order no. 442/2016 published by the National Agency for Fiscal Administration (ANAF), “large taxpayers” equal to or greater than the defined thresholds (excluding VAT) must prepare transfer pricing documentation on an annual basis. The threshold amounts are €200,000 for interest registered for financial services, €250,000 for provision of services, €350,000 for acquisition or sale transactions of tangible or intangible goods. A secondary threshold is also given for large taxpayers and for other small and medium-sized taxpayers that do not satisfy the conditions of the primary threshold to prepare transfer pricing documentation upon written request of the tax authority.
Documentation Deadline: In general, the deadline for presenting transfer pricing documentation to the tax authority is 10 calendar days from the date of a request from the tax authority. As per the Order no. 442/2016, if the primary threshold amount is satisfied, then such large taxpayers must complete their transfer pricing documentation by the date when their annual corporate tax return for each tax year is due. The deadline for presenting transfer pricing documentation for those large taxpayers engaged in related-party transactions that are below the primary threshold amounts or for small and medium-sized taxpayers is between 30 and 60 calendar days, subject to a 30-day extension if requested by the taxpayer.
Transfer Pricing Adjustment: As per the Order no. 442/2016 published by the National Agency for Fiscal Administration (ANAF), transfer prices will be adjusted for taxpayers that fail to substantiate that the prices are in accordance with the arm’s-length principle. Transfer prices will be estimated, where the transfer pricing documentation is incomplete. The Order no. 442/2016 also provides clarifications on how the interquartile range should be determined to assess whether a transaction was carried out in compliance with the arm’s-length principle.
Interest: The daily interest charge would be reduced from 0.03% to 0.02% as per the Law No. 207/2015 of Romania and is effective from 1 January 2016.
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Russia: Financial Services: As per the amended thin capitalization rules passed by the parliament on 15 February 2016, interest on loans from banks and Russian companies will not be subject to the thin capitalization rules, under certain conditions. The Law No. 25-FZ also extends the scope of the thin capitalization rules to include loans from foreign related parties that do not hold a direct or indirect interest in a Russian borrower. The law sets forth that the interest expenses, which are not deductible for corporate income tax purposes under the thin capitalization rules, qualify as dividends and are taxed accordingly. The law will enter into force on 1 January 2017.
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