Australia

A new subdivision 815-A has been passed in 2012 in respect of treaty equivalent cross-border transfer pricing rules. The Commissioner is empowered to challenge the extent of interest deductions in a situation where the level of related party loans is not considered to be commercially realistic, regardless of whether the loans fall within the thin capitalization rules.

 Chile 

Bill 8488-05 of 2 August 2012 came into force and have effect on applicable methods, priority of methods, penalties and APA, where Bill 8488-05 of 2 August 2012 includes provisions for the negotiation of advance pricing agreements.

 Colombia

New Decree 1602 of 27 July 2012 brought changes to documentation timing, that requires contemporaneous documentation to be filed with the tax authorities during a term established by annual regulations and documentation deadlines, that an annual regulation establishes the period within which the transfer pricing documentation must be filed with the tax authorities. Decree 1602, sets out the requirements for an application for an APA. This includes a description of the parties involved, details of the transactions, the transfer pricing methodology and the period to be covered by the APA.

 Latvia

From 1 January 2013 documentation requirements are being introduced for taxpayers whose net turnover exceeds LVL 1 million, for transactions of more than LVL 10,000 with related parties. The required documentation includes a general description of the taxpayer’s industry and business, the legal structure of the group, intangibles used by the taxpayer, functions and risk, business processes and a description of the related party transactions. Timing for documentation, with effect from 1 January 2013 the taxpayer is required to supply the documentation within 30 days after a request from the tax authorities. The documentation must be kept by the taxpayer for five years after the relevant tax year.

Sweden 

Under the draft legislation the main corporate income tax rate would be reduced to 25.3% in 2013 if the economic situation permits this.

 United States 

Under Notice 2012-39 transfers of intangible property by US corporations to foreign corporations as part of outbound reorganizations must in some cases be treated as an outright sale of the intangible property in return for contingent payments from the other party. Where this applies the US, corporation must include in taxable income each year an amount representing the arm’s length charge for the use of the intangible property in line with the commensurate with income standard. In relation to the customs valuation standard, BP headquarters letter HQ W548314, effective from 30 July 2012 the US Customs and Border Protection (CBP) announced that post-importation adjustments made pursuant to a formal transfer pricing policy and specifically related to the declared value of the merchandise may be taken into account in arriving at the transaction value for customs purposes.

 France

Under Article 209B of the French tax code, effective for periods beginning after 31 December 2012 the burden of proof falls on the taxpayer in a situation where the taxpayer makes transfers to entities situated outside the European Union.

India

New Notification No. 36 of 2012 ,Rules 10F to 10T & Finance Act 2012 brought changes on APA. The application process & APA process are set out in Notification No. 36 of 2012. Also for 2012/13 no adjustment is made if the arm’s length price is within 5% of the transfer price charged by the taxpayer.

Peru

As regards to other methods a modified CUP method may be applied in the case of international transactions involving an intermediary who is not the actual recipient of the goods. This includes imports or exports involving tax havens. A monetary threshold is expected to be established with effect from 1 January 2013 in relation to transactions with tax havens that need to be supported by documentation. Under new Decrees 1112, 1120 and 1124, the documentation requirements also apply to transactions with entities located in tax havens, but a monetary threshold is expected to be established at a later date for transactions with tax havens that must conform to documentation requirements. The tax authority may require taxpayers to produce documentation in respect of transactions that did not give rise to any income; or exempt taxpayers from the need to produce documentation in support of certain transactions.

Poland

Under proposed legislation the documentation requirements would be extended to partnerships and to certain transactions between a taxpayer and its permanent establishment.

 Italy 

Under new Circular Letter No. 21/E/2012, taxpayers need to apply for a MAP under a tax treaty within three years of the notification of the tax adjustment, while the time limit for commencing a MAP under the EU Arbitration Convention is three years.