Decree 390 was published in the Official Gazette on 25 October 2016 to regulate the arm’s length principle established in the Fiscal Code and establishes Transfer Pricing documentation requirements. The Decree will enter into force on 1 January 2017.
The content of the Decree is generally follows the OECD Transfer Pricing Guidelines. Specific comments are following:
- In case the price or margin of the controlled transaction falls outside the arm’s length range, the taxpayer should adjust it to the median;
- Multiple year data can only be used when it adds value to the transfer pricing (TP) analysis;
The Decree formulates specific documentation requirements. Taxpayers that prepare Transfer Pricing documentation in line with the minimum requirements of Chapter 5 of the OECD Transfer Pricing Guidelines should satisfy these requirements.
