The amendment to the Tax Administration Law applicable from 1 January 2012, enables taxpayers to apply for advance transfer pricing agreements with the tax administrator. Agreements between taxpayers and the tax administrator on transfer pricing methodologies and assessment principles can therefore be made from that date.
The transfer pricing agreements may be used for various inter-group transactions, and will be binding for a specific period, i.e. they will be valid for the current year and for five years from the date of the tax administrator’s decision.
The tax administrator will have to give a ruling on an application within 60 days of receiving it, but an additional 30 days is allowed for the examination of applications received up to 1 July 2013. A further 60 day extension can be granted if additional research is required to process an application. Processing time extensions must be notified in writing to the taxpayer making the application.
