Specific TP compliance
The Costa Rican Tax Administration has temporarily suspended the filing date for the transfer pricing information return. On 5 June 2017 Resolution DGT-R-28-2017 was published in the Official Gazette to give effect to this measure. The resolution modifies Article 4 of Resolution DGT-R-044-2016 to temporarily suspend the due date for filing the information return.
According to a previous ruling transfer pricing information returns for fiscal years 2015 and 2016 would have been due on 30 June 2017. This deadline is suspended until further notice. However, taxpayers should maintain the information that would be included on those information returns for filing when the tax administration requests the information.
Spain’s Tax Agency has recently published a draft order approving Form 232 for reporting related-party transactions and transactions and situations that involve countries and territories considered to be tax havens.
The deadline for filing Form 232 has been set generally in May. All controlled transactions with the same related party, regardless of their individual amounts must be reported if the total amount of the transactions exceeds EUR 250,000. Additionally, the same type of individual transactions entered into in a given tax period with the same individual or related entity using the same valuation method and in an amount exceeding EUR 100,000 at arm’s length value, also must be reported.
The amendments to the Tax Code have been effective, with some exceptions, since 1 January 2017. Below is a summary of the most significant changes in corporate profit tax and transfer pricing.
Corporate profit tax:
- The general tax rate remains at the level of 18%. Principles of tax base calculation remain unchanged.
- “Tax holidays” until 2021 are introduced for taxpayers with annual income less than UAH 3 million provided they meet some requirements.
- Accelerated depreciation within 2 years is allowed for machinery and equipment purchased and set in operation in 2017 and 2018, provided that such machinery or equipment is used solely for the purposes of the taxpayer’s own business activity.
- Royalties paid to non-beneficial owners and in other special cases are no longer deductible at all (even if the payments satisfy the “arm’s length” criteria).
- The withholding tax rate on interest paid to non-residents is reduced from 15% to 5% or 0% upon fulfilment of special requirements (other than the application of tax treaties).
- As per the adopted draft law, a transaction will be considered as controlled if (i) the annual income of the taxpayer within the reporting period exceeds UAH 150 million, and (ii) the sum of the transactions with each counter party exceeds UAH 10 million. Also, late surcharges will be introduced for failure to submit a report on controlled transactions or failure to include all controlled transaction in the report.
- The deadline for submitting the report on controlled transactions has been changed to October 1 of the year following the reporting one.
- Self-adjustments can be made to maximum or minimum values of the range of prices (profitability), not to the median, as it was previously envisaged.
A press release has been published by the Finance Ministry on 16th February 2017. It states that the deadline for the transfer pricing (TP) file submission concerning the investment projects General Entrepreneurship (Γενική Επιχειρηματικότητα) and New Independent SMEs (Νέες Ανεξάρτητες ΜΜΕ) is extended to 28th February 2017.
The Inland Revenue Authority of Singapore (IRAS) updated the transfer pricing administration information on its website regarding the reporting of related-party transactions (RPTs) on 3 November 2016.
According to the new requirements a company must complete the form for reporting RPTs from the year of assessment 2018 and will submit it together with Form C if the value of the RPTs disclosed in the audited accounts for the financial year exceeds SGD 15 million.
Costa Rica has published a resolution in the official gazette to finalize the rules concerning the filing of an annual transfer pricing return for taxpayers qualifying as “large taxpayers” or as “national large companies” or operating under a free trade zone regime and having intercompany transactions in Costa Rica.
As per the resolution, the due date for filing transfer pricing return is the last business day of June in the year following the tax year. The first transfer pricing return for 2015 and the transfer pricing return for 2016 will both be due on the last business day of June 2017.
DIAN reminded that the formal obligation to file an informative return will only be complied with if the transfer pricing informative return (Form 120) is digitally signed and submitted and as such mere submission of Form 1125 to DIAN through its online services does not satisfy the obligation to report information for transfer pricing purposes.