Transfer Pricing Brief: February 2021

Australia	Scope of transfer pricing rules: Australian Taxation Office (ATO) expanded the definition of “significant global entity (SGE)”. The SGE concept determines whether an entity is subject to a number of tax integrity and reporting measures. The expanded measures are applicable from income years beginning on or after 1 July 2019. See the story in Regfollower
Belgium	Audits-Rules: In the week commencing 11 January 2021, a number of selected Belgian taxpayers received a transfer pricing (TP) questionnaires from the tax authority’s special TP audit department. Taxpayers are being allowed 30 days to reply, period may be extended upon request. See the story in Regfollower
Bosnia and Herzegovina	Compliance with BEPS standards: The Multilateral Convention to execute tax agreement related measures to prevent base erosion and profit shifting (MLI) entered into force for Bosnia and Herzegovina on 1 January 2021. See the story in Regfollower
Colombia	Documentation-Master file/Local file/CbC requirement: On 17 December 2020, the Colombian Ministry of Finance and Public Credit has issued Decree 1680 extending the deadline for informative transfer pricing returns and Local files (if applicable) from 7 September to 20 September 2021. The deadline for CbC reports and Master file (if applicable) also extends from 10 December to 23 December 2021. See the story in Regfollower
Estonia	Compliance with BEPS standards: On 15 January 2021, Estonia has deposited its ratification instrument for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The MLI will enter into force for Estonia on 1 May 2021. See the story in Regfollower
Greece	Compliance with BEPS standards: On 21 January 2021, the Parliament approved the Bill for ratifying the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). See the story in Regfollower
Ireland	Restriction on interest deduction: On 23 December 2020, the Finance Department published feedback statement, which considers the final ATAD measure, an Interest Limitation Rule, which will also be implemented in Finance Bill 2021. It requires a limit on deductible interest of a maximum of 30% of ‘EBITDA’ per ‘taxpayer’. See the story in Regfollower
Italy	Digital economy transactions-General: On 25 January 2021, the Italian Revenue Agency has published Provision no. 22879/2021, which approves the digital services tax (DST) return form, instructions and technical specification for submission. See the story in Regfollower Digital economy transactions-General: On 15 January 2021, the Italian tax authorities published the Decree-Law No. 3 of 15 January 2021 providing the extension deadlines for Digital Services Tax (DST). Accordingly, Digital Services Tax (DST) payment deadline is 16 March 2021; and Digital Services Tax (DST) return deadline is 30 April 2021. See the story in Regfollower APAs-General rules: Budget Law 2021 contains new provisions on advance pricing agreement (APA) rollback. Multinational group taxpayers that had already agreed to APAs to address their transfer pricing can now rely on their retroactivity for tax periods still open for assessment. See the story in Regfollower
Luxembourg	Restriction on interest deduction: On 8 January 2021, the Luxembourg Tax Authorities has published Circular L.I.R. n° 168bis/1 (French), which clarifies certain aspects of the interest expense deduction limitation rules included in article 168bis of the Luxembourg Income Tax Law (ITL). See the story in Regfollower
Malta	Scope of transfer pricing rules: On 29 January 2021, the Maltese Commissioner for Revenue (CFR) has notified that with respect to cross-border arrangements where the trigger point for reporting took place between 1 July 2020 and 31 December 2020, the deadline for reporting must take place by no later than 1 February 2021. See the story in Regfollower Scope of transfer pricing rules: On 4 January 2021, the Maltese Commissioner for Revenue (CFR) has released guidelines concerning DAC6 providing the information on the company within a group and on the reporting procedure, as well as new examples of general and specific hallmarks, and penalties. See the story in Regfollower
Paraguay	Scope of transfer pricing rules: On 30 December 2020, the tax authority of Paraguay issued Decree 4644/2020, providing further guidance on the technical aspects of Paraguay’s transfer pricing (TP) provisions included in Law 6380. The new transfer pricing provisions came into effect for fiscal year 2021 and will apply to companies engaging in transactions with related parties both in and out of Paraguay. Special areas-Intra-group services: In the case of intra-group service transactions, before proceeding to the analysis of compliance with the arm’s length principle, one must consider if the service has been provided, if the services provide benefits that improve the recipient’s business, and if the price paid for the service is within arm’s length for comparable services. Priority of methods: Paraguay’s new TP law establishes that the first TP method to be considered must be the comparable uncontrolled price (CUP) method. If the CUP’s application is not possible, the method that best suits the facts and circumstances of the controlled transaction should be applied. Comparability-Comparable data: An uncontrolled transaction used as a comparable to analyze a controlled transaction must occur in the same fiscal year as the analyzed transaction. Comparability-Range: The new TP regulation specifies that where two or more comparable transactions are identified, the statistical method to be applied will be the inter-quartile range. See the story in Regfollower
Singapore	Requirements-Related party definition: On 4 January 2021, the tax Authority of Singapore has published Advance Ruling Summary No. 1/2021, regarding the determination of related parties for transfer pricing (TP) purposes in cases involving a joint venture without majority control. See the story in Regfollower Comparability-PLI used: The Inland Revenue Authority of Singapore (IRAS) has published updated indicative margins for related party loans. IRAS has introduced an indicative margin which taxpayers can apply on each related party loan not exceeding S$15 million. See the story in Regfollower
Spain	Digital economy transactions-General: The Spanish Tax Agency has issued a notice announcing a deferral of the initial deadlines for the new Financial Transactions Tax (FTT) and Digital Services Tax (DST). Accordingly, the deadline for the filing of the DST return and paying the tax of Q1 2021 is deferred to 31 July 2021 and to 10 – 20 April 2021 for FTT. See the story in Regfollower
Sri Lanka	CbC reporting requirement-General rule: On 22 December 2020, the Inland Revenue Department (IRD) of Sri Lanka has published a notice related to the filing of Country-by-Country (CbC) reports and notifications. The filing of the CbC notification was due by 31 December 2020, but due to COVID-19, this has been extended to 31 January 2021; and The filing of the first CbC report is due by 31 March 2022. See the story in Regfollower
US	Information exchange-Multilateral: On 27 January 2021, “US and Argentina” have signed a competent authority agreement to exchange country-by-country reports. Pursuant to the provisions of Article 6 of the agreement, each Competent Authority intends to exchange with the other Competent Authority annually on an automatic basis the CbC Report received from each Reporting Entity that is resident for tax purposes in its jurisdiction. See the story in Regfollower