Australia | Special rules for hybrid instruments or entities: On 16 August 2018, Treasury Laws Amendment (Tax Integrity and Other Measures No. 2) Bill 2018 containing the hybrid mismatch integrity measures was passed by the Parliament. The bill includes the measures to prevent entities that are liable to income tax in Australia from being able to avoid income taxation, or obtain a double non-taxation benefit, by exploiting differences between the tax treatment of entities and instruments across different countries. See the story in Regfollower |
Peru | Low value-adding services: On 2 August 2018, Legislative Decree No. 1369 (the Decree) was published in the Official Gazette. The decree clarified that expenses incurred regarding “low-value-added services” will be equivalent to the sum of the costs and expenses incurred by the service provider as well as its profit margin, which cannot exceed 5% of such costs and expenses. The Decree will enter into force on 1 January 2019. See the story in Regfollower |
Singapore | CbC reporting requirement-General rule: On 7 August 2018, Inland Revenue Department (IRD) released third edition of its e-Tax Guide on country-by-country reporting. The guides provide large multinational taxpayers with information regarding the obligation to submit CbC reports including discussion of how to complete the relevant forms. See the story in Regfollower |
Belgium | Penalty for documentation failure: On 2 August 2018, the Belgian Ministry of Finance published the Royal Decree of 29 June 2018 on administrative penalties for transfer pricing documentation. Taxpayers who do not meet the reporting and registration requirements for transfer pricing documentation are subject to civil penalties ranging from € 1,250 (for a second infringement) to € 25,000 (for five or more infringements). See the story in Regfollower |
Hong Kong | Information exchange-Multilateral: Hong Kong joined the multilateral competent authority agreement on the exchange of country-by-country reports (CbC MCAA). The CbC MCAA was signed by Hong Kong on 27 July 2018. See the story in Regfollower |
Jamaica | Availability of APA: Tax Administration Jamaica (TAJ) recently published the final version of a Transfer Pricing Agreement (TPA) Practice Note. The purpose of the Practice Note is to provide taxpayers and tax officials with guidance on transfer pricing agreements in accordance with the transfer pricing rules that were enacted in November 2015. See the story in Regfollower |
Malta | Restriction on interest deduction: On 8 August 2018, the Maltese Commissioner for Revenue published update guidelines on the application of the notional interest deduction (NID) rules. Under the NID, a Malta company or partnership, including a Malta permanent establishment of a foreign company or partnership can claim an optional deduction up to 90% against its chargeable income for interest deemed to be incurred on its risk capital. See the story in Regfollower |
Russia | Requirements-Rule: According to Law No.302-FZ (Amending Part One and Two of the Tax Code of the Russian Federation) published on 3 August 2018, transactions between two parties within Russia will be classified as controlled for transfer pricing purposes only if income generated from the transactions exceeds 1 billion rubles per year subject to certain conditions. See the story in Regfollower |
Colombia | CbC reporting requirement-Timing: On 30 July 2018, Resolution 40 of 26 July 2018 was published in the Official Journal. Accordingly, if a constituent entity is required to submit a specific transfer pricing form (form 120), the CbCR notification will be submitted within that form. Otherwise require to download a specific form from the Tax Authority’s website and send it by e-mail to the tax authority. Master file and Local file: On 17 July 2018, the Colombia Tax Authority issued Resolution 38 of 2018 regarding the procedure to file the BEPS Action 13 Local File and Master File for fiscal year 2017. Accordingly, the Local File and Master File should be filed electronically using Form 1729 V-7 and Form 5231 V-1, respectively. The due date of the filing form is 11th and 24th September 2018. See the story in Regfollower |
US | Information exchange-Multilateral: On 16 August 2018, US signed an agreement with Austria on exchange of Country-by-Country Reports. The competent authority arrangement (CAA) for exchange of country-by-country reports is on the basis of a double tax convention (DTC). See the story in Regfollower |
Finland | Control: On 6 August 2018, the Finnish MoF published a draft consultation on a draft law that proposed changes to the Finnish CFC rules. The bill introduced changes to the CFC definition and applicable exemptions, including reducing the control threshold for a company that qualifies as a CFC from the current 50% (direct or indirect ownership) to 25% of ownership of share capital or voting rights or profit entitlements as defined by ATAD. See the story in Regfollower |
Sweden | Applicable Methods: On 29 August 2018, the Swedish Tax Agency has updated its transfer pricing guidance to incorporate the OECD guidance on the application of the transactional profit split method. The update notes that the revised section of the guidance is a clarification of how the profit split method is to be applied and there has been no change in the arm’s length principle as such. See the story in Regfollower |
World Tax Brief: September 2018
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