TPA Newsletter

Indonesia

Main corporate income tax rate-Certain small and medium enterprises with gross income not exceeding IDR 4.8 million may be taxed on the basis of 1% of turnover.

Israel

Main corporate income tax rate-The corporate tax rate is 26.5% for 2013/14 (previously 25%). Lower rates apply to companies eligible under the Law for the Encouragement of Capital Investment.

Malaysia

Audits

Process- A Transfer Pricing Audit Framework effective from 1 April 2013 restricts the periods of assessment covered by a transfer pricing audit to five years.

Peru

Documentation

Format– From fiscal year 2012 onwards taxpayers are required to submit the transfer pricing study to the SUNAT each year with the Transfer Pricing Informative Return Form. This should be done by the end of June of the following year but the transfer pricing study for 2012 should be sent to the SUNAT by October 2013.

Thresholds-A Resolution passed in 2013 has restricted the situations in which taxpayers need to submit a transfer pricing informative return. Under the Resolution taxpayers must file a transfer pricing informative return only when the amount of transactions entered into with related parties and parties in tax havens in the fiscal year exceeds PEN 200,000.

Portugal

Control-A proposal to increase the shareholding requirement to 20% is currently under discussion.

Slovenia

Financial services-Thin capitalization provisions apply to restrict deductible interest where the related party debt exceeds the prescribed debt to equity ratio of 4:1. The thin capitalization provisions apply where one party has a direct or indirect 25% shareholding in another and from 1 January 2014 also to “sister” companies that are both 25% owned by the same shareholder.

Romania

Interest-For late payment of tax relating to liabilities that arise after 31 July 2013 the late payment penalty is 0.02 per day of delay in addition to the payment of interest at the applicable rate.

Russia

Documentation

Format-Letter 03-01-18/26965 clarifies that transfer pricing documentation in relation to a transaction or set of transactions may consist of a single document or set of documents and does not need to be in any particular format provided that it contains the necessary information. The documentation may be prepared by the party from whom the information is requested or by the other party to the transaction, but must be submitted by the party from whom the documentation was requested.

Vietnam

Audits

Time Limits-Under Vietnamese tax law, accounting law and implementation regulations, the tax authorities are authorized to make retroactive adjustments for up to 10 years. This can be extended in the case of taxpayers who fail to register for tax.

Penalty in cases of adjustments-From 1 July 2013 underreporting of tax liabilities could be subject to a penalty of up to 20% (formerly 10%) of the underpaid amount, regardless of whether the taxpayer keeps all related supporting documents and presents them to the tax authorities upon request and tax evasion could be subject to a penalty of up to three times the outstanding tax liability.

Interest-Late payment of tax is subject to interest of 0.05% per day of the outstanding tax amount. This rate increases to 0.07% after the delay exceeds 90 days.