The principle of transfer pricing is the pricing of goods, services and so on in related party transactions surrounded by multinational enterprises to fulfill the conditions for a self-governing business relationship or to meet the arm’s length principle. Someone involved in financial or business transactions with entities connected to them must maintain transfer pricing documentation. This responsibility is binding both for transactions with legal entities and with individuals with no exception. The Finance Ministry has published a Guidelines No. MF/014283/2016-724 regarding the content of documentation on the transfer pricing method applied by a taxable person that replaces the previous guidelines in 2015, also include a definition of related parties due to economic linkage due to direct or indirect participation of the state, municipalities or higher territorial units in assets, control or management. It applies for 2015 tax period. This guidance specifies the documentary obligations of public interest entities, central administrations and entities with direct or indirect government, municipal or higher territorial unit participation came into force in 14th of July 2016.
PGA Highlights: July 2016
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