Finland Control: On 1 November 2018, the Ministry of Finance submitted a bill to Parliament proposing changes to the CFC rules. Under the proposed rules, the control threshold setting the CFC status would be reduced from 50% to 25%, and the direct or indirect shareholdings of resident and non-resident related parties would be taken into account in assessing the threshold, which could bring additional entities within the scope of the CFC provisions.
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Peru CbC reporting requirement-Timing: For fiscal year 2017, the deadline for CbC report has been extended from November 2018 to March 2019 by Ruling No. 264-2018 issued on 11 November 2018.
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Poland Requirements-Rule: On 14 November 2018, President of Poland signed an act including amendment of transfer pricing measures effective in 2019. The new laws will repeal existing Article 9a of the CIT Act regarding transfer pricing, which is being replaced by Chapter 1a, addressing comprehensive changes in this respect.
Requirements-Control: The definition of related parties have been broadened under the new law which was signed by the president on 14 November 2018 in a way that threshold of “at least 25% ownership stake” (for determining which entities can be considered to be related parties) will also apply to instruments other than shares. Thus, for instance, investment funds may be found to be related parties.
Specific TP compliance-Form: From 1 January 2019, taxpayers will be required to provide information about related party transactions by a new form called TP-R, which replaces the existing CTA TP form. TP-R requires a much broader range of information, including the structured and specified presentation of the results of bench-marking studies.
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Brazil MAP: On November 29, 2018, the Revenue Authority published Normative Instruction No. 1846 of 28 November 2018 that covers the rules for submitting a Mutual Agreement Procedure (MAP) request, the approval of a request, and the termination process.
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Vietnam Restriction on interest deduction: Vietnam Ministry of Finance is considering proposed amendments to the country’s interest expense deduction restriction. The Decree No. 20/2017/ND-CP, enacted 24 February 2017 (Decree 20), limits deductions restriction for related party total loan interest to 20% of total net profit generated from business activities plus loan interest and amortization costs arising in that period.
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Australia CbC reporting requirement: Significant Global Entities (SGE) that have a Country-by-Country (CbC) reporting obligation for the year ended 31 December 2017 will be aware that the Local file, Master file, and CbC report are due to be lodged by 31 December 2018. However, due to the year-end holiday period, ATO is providing a lodgment deferral where SGEs will have until 15 January 2019 inclusive to lodge each of the respective statements.
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Thailand Requirements-Rule: On 21 November 2018, Thailand’s new transfer pricing law was enacted and published in the Official Gazette and will be effective from 1 January 2019, which was approved by the National Legislative Assembly in 27 September 2018.
Requirements-Control: Under the act related parties” are defined as two or more legal entities holds directly or indirectly at least 50% of the share capital of the other entity; a shareholder holds at least 50% (directly or indirectly) of the share capital of both entities; or a person has a dependent relationship through participation in the capital, management or control of another entity as prescribed by the Ministerial Regulations.
Transfer pricing documentation: According to Section 71 ter, companies or partnerships with related party transactions are required to submit a report (disclosure form) with the annual corporate tax return, which provides information on the relationship between entities and the value of inter-company transactions.
Penalty for documentation failure: According to Section 35 ter, failure to lodge the disclosure form or transfer pricing documentation by the due date or lodgement of incomplete/incorrect disclosure form or transfer pricing documentation will result in a fine not exceeding Baht 200,000.
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Egypt BEPS related compliance: On 21 October 2018, Egyptian Ministry of Finance has issued new decree 547 providing the authority for new transfer pricing guidelines to be published. The new guidelines introduced three-tiered level of transfer pricing reports for transparency to include Master File, for the ultimate holding company of the group, Local File for each subsidiary in the group and CbCR to be submitted in the specific deadline.
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Bulgaria Penalty for documentation failure: On 5 November 2018, the Ministry of Finance (MoF) published a draft consultation, proposing new mandatory documents for transfer pricing documentation, and a penalty for failure to comply with up to 1% of the value of undocumented transactions. Failure to submit the TP file may also lead to other negative tax consequences, including that the penalties proposed may end in significant liability.
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Latvia Documentation-Requirement: Under the official Gazette no 225.21/2018 published on 14 November 2018, transfer pricing documentation is mandatory for Latvian companies and permanent establishments in Latvia of foreign companies that enter into transactions with (1) a related foreign entity; (2) natural persons related to the entity; (3) entities or persons if they are located, setup or established in low tax or tax free countries or territories (offshore companies).
Master file: Taxpayers resident in Latvia are required to submit Master file electronically within 12 months following the end of the reporting fiscal year subject to meet specific thresholds and are required to prepare within 12 months following the end of the reporting fiscal year and submitted within one month of request if controlled transactions do not exceed EUR 15 million but exceed EUR 5 million and revenue is below EUR 50 million.
Local file: A Local file is required to submit electronically within 12 months following the end of the reporting fiscal year if controlled transactions exceed EUR 5 million in the reporting fiscal year. Local file required to prepare within 12 months following the end of the reporting fiscal year and submitted within one month of request if controlled transactions exceed EUR 250, 000 but do not exceed EUR 5 million.
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Argentina CbC reporting requirement: The Federal Administration of Public Revenues (AFIP) has published General Resolution 4332 of 8 November 2018, which includes several amendments to General Resolution 4130 regarding Country-by-Country (CbC) reporting. It entered into force from November 12, 2018.
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Uruguay Transfer pricing documentation: In October 2018, the government of Uruguay issued Decree No. 353/2018 providing regulatory guidance regarding new transfer pricing (TP) documentation requirements. The decree clarifies guidance to implement the transfer pricing documentation requirements introduced by the 2017 law.
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