Australia
OECD Guidelines, the new transfer pricing rules require the provisions of the legislation to be interpreted so as to achieve the most consistency with the OECD Guidelines.
Taxation Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013, made following amendments to the Transfer Pricing Rules:
Financial services– an arm’s length interest rate must be determined under transfer pricing rules before applying thin capitalization provisions.
Priority of Methods– the most appropriate method to be used based on the comparability analysis and the availability of comparable information.
Comparable Data-Range-where all points in the range are equally appropriate and reliable then any point may be regarded as arm’s length.
Documentation requirements– The legislation does not contain detailed guidance on documentation requirements. Taxpayers should prepare transfer pricing documentation by the date of submission of the tax return in order to establish a reasonably arguable position. Documentation should be submitted to the ATO when requested.
Denmark
The government has published a proposal to reduce the rate for the main corporate income tax from 25% to 22% by stages between 2014 and 2016.
Spain
Penalty in cases of adjustments- an aggravated criminal tax penalty applies to tax evasion from 17 January 2013, the penalty being two to six times the tax evaded and imprisonment of two to six years. In this case the statute of limitations is ten years.
Greece
On 23 January 2013 tax Law 4110/2013 was published in the Government Gazette.
Hong Kong
To support small and medium enterprises, for 2012/13 the Hong Kong SAR government proposes to reduce the profits tax by 75% up to a ceiling of HKD 10,000.
Indonesia
The DGT proposes to introduce thin capitalization rules in 2013. The tax deduction for interest paid would be restricted if the debt to equity ratio exceeds a certain level that will be specified in the legislation.
Korea
Transfer Pricing Rule-transactions with a foreign specially related party must be at arm’s length. Transactions between a Korean permanent establishment and other parts of the same legal entity must also be at arm’s length, taking into account the functions, assets used and risks borne by the parties to the transaction. No specific provision but financial services must conform to the arm’s length principle.
Poland
Transfer Pricing Rule-under the proposed legislation that will apply from 1 January 2013 if passed, the requirement to prepare transfer pricing documentation will also apply to partnerships, joint ventures and permanent establishments. Intra-group services-A draft Decree proposes that in the case of low value-adding services the taxpayer only needs to submit a description of the transaction. The tax authority will examine the transaction based on the written description and further information will only need to be submitted if requested. Draft regulations set out the required elements in the description of these low value-adding services.
Proposed legislation extends the thin capitalization rules to cover loans from entities indirectly related to the taxpayer. In relation to the priority of methods, a draft Decree proposes that this hierarchy would be replaced by a requirement to use the most appropriate transfer pricing method, based on the type of transaction and the availability of reliable information.
As regards to the Mutual Agreement Procedure, a draft regulation is being proposed setting out the procedure for trilateral mutual agreement procedures.
