Transfer Pricing Brief: January 2020

Brazil	Dispute resolution-Best practices: The OECD peer review report regarding Brazil published on 28 November 2019 notes that Brazil has concluded 35 double tax treaties all of which contain a provision relating to the mutual agreement procedure (MAP). Brazil has a small inventory of MAP cases with 23 cases pending on 31 December 2018. See the story in Regfollower
Serbia	CbC reporting requirement-General rule: On 6 December 2019, the Serbian Parliament passed the legislation that amends the corporate income tax law including requirements for country-by-country (CbC) reporting of controlled transactions within a corporate group. According to law, a CbC report must be submitted by the Serbian tax resident that is the ultimate parent legal entity of an international group of related legal entities and that have total consolidated income of at least €750 million annually. See the story in Regfollower
Canada	Dispute resolution-Elements of minimum standards: On 1 December 2019, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) entered into force for Canada. See the story in Regfollower
Georgia	Requirements-OECD Guidelines: Georgia adopts updated OECD transfer pricing guidelines by the Decree No. 366 issued on 2 December 2019. The new decree updates the reference to the 2010 OECD transfer pricing guideline, providing that the 2017 version should instead apply. See the story in Regfollower
Russia	Dispute resolution-Best practices: The OECD peer review report regarding Russia published on 28 November 2019 notes that Russia has signed the multilateral instrument (MLI) to update its treaties for tax treaty related BEPS recommendations. For double tax treaties not covered by the MLI Russia intends to engage in bilateral negotiations with its treaty partners to introduce treaty changes to comply with BEPS action 14. See the story in Regfollower
Bulgaria	Documentation-Thresholds: On 6 December 2019, Law on Amendments to the Corporate Income Tax Act was published in the Official Gazette. The law includes an exemption from the requirement to prepare transfer pricing documentation if at least two of the specific thresholds are not exceeded as of 31 December of the previous year. See the story in Regfollower
Nigeria	Restriction on interest deduction: On 28 November 2019, the House of Representatives passed the Finance Bill 2019. The bill introduced the requirements of an interest deduction limitation rule which is equivalent to 30% of EBITDA for loans received from non-resident associated parties, with additional interest expense allowed to be carried forward up to five years. See the story in Regfollower
Peru	Restriction on interest deduction: On 29 November 2019, the Peruvian Tax Administration (SUNAT) published Report No. 171-2019-SUNAT/7T0000 regarding interest deduction limitations for the taxpayers engaged in public infrastructure projects, public services and applied research, and technological innovation projects. See the story in Regfollower
Greece	Main corporate income tax rate: On 6 December 2019, Greek Parliament approved tax reform bill (Law 4646/2019) which proposed to reduce corporate tax rate from 28% to 24% for all legal entities for the fiscal year 2019 and thereafter. See the story in Regfollower
Sweden	Requirements-Rule: On 6 December 2019, the Swedish Ministry of Finance has published draft law on implementation of Council Directive (EU) 2018/822 of 25 May 2018 (DAC6) on reportable cross-border tax planning arrangements (DAC6). This includes measures to require the reporting of cross-border tax planning arrangements and the exchange of information reported with other EU Member States. See the story in Regfollower
Taiwan	CbC reporting requirement-General rule: On 10 December 2019, the Ministry of Finance (MOF) issued tax ruling no.10804651540 providing exemption from CbC reporting for Taiwan entities under a MNE Group headquartered outside Taiwan. See the story in Regfollower
Saudi Arabia	CbC reporting requirement-General rule: Recently, the General Authority of Zakat and Tax (GAZT) of Saudi Arabia have introduced E-Service for country-by-country (CbC) reporting. GAZT announced that the portal is now available at their website to register and CbC report must submit for fiscal years ending on or after 31 December 2018. See the story in Regfollower
Indonesia	Dispute resolution-Best practices: The OECD peer review report regarding Indonesia published on 28 November 2019 concludes that Indonesia complies with most of the elements of the minimum standard under BEPS Action 14; and is planning to introduce measures to further align itself with the minimum standard. See the story in Regfollower
Argentina	Documentation-Deadlines: On 16 December 2019, the Tax Authority (AFIP) announced further extensions to tax filing dates for transfer pricing filings for financial years ending on December 31, 2018. Previously the deadline was pushed forward to December 16-20, 2019 and new deadline is second week of February 2020. See the story in Regfollower
Estonia	Dispute resolution-Elements of minimum standards: On 13 December 2019, Estonian President has signed a law for ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). See the story in Regfollower
Germany	Applicable Methods-Priority of Methods: On 10 December 2019, Germany published a draft law implementing EU anti-tax avoidance directive. The draft law proposed to implement the internationally adopted “best method rule” requiring that the taxpayer select the most appropriate transfer pricing method, considering the advantages and disadvantages of each method. Master file: The draft law proposed to reduce the turnover threshold for preparing a master file from EUR 100 million to EUR 50 million, which is likely to result in a considerable increase in the number of taxpayers subject to the master file filing requirement in Germany. Advance pricing agreements (APAs): The law proposed to increase the basic fee for an APA application from EUR 20,000 to EUR 30,000. The fee can be reduced if the APA follows a coordinated bilateral or multilateral tax audit (“joint audit”). See the story in Regfollower Dispute resolution-Monitoring mechanism: On 12 December 2019, the German Official Gazette published a law implementing EU directive on tax dispute resolution providing a uniform mechanism to address tax treaty disputes among EU member states that meets the BEPS Action 14 minimum standard. See the story in Regfollower
Costa Rica	Availability of APA: In December 2019, the Costa Rican Ministry of Finance released a draft resolution regarding the procedures for processing advance pricing agreements (APAs). The APA will be in force for five fiscal periods and could be granted in two ways. See the story in Regfollower
Luxembourg	Special rules for hybrid instruments or entities: On 19 December 2019, the Luxembourg Parliament approved draft law implementing EU Anti-Tax Avoidance Directive (2017/952) (ATAD 2) into Luxembourg domestic law. The law will be effective for tax years starting on or after 1 January 2020, except for the reverse hybrid rules which will apply only as of tax year 2022. See the story in Regfollower
Malaysia	Audit Rules: On 15 December 2019, the Malaysian Inland Revenue Board (“MIRB”) published the transfer pricing audit framework (2019). In a typical transfer pricing audit, taxpayers are given 21 days to respond to the IRB’s request for documentation and information. This timeline has been reduced to 14 days. Adjustments-Appeals: Previously, taxpayers are given 21 days to object to the MIRB’s proposed transfer pricing adjustments. The 2019 TP Framework reduces the period to 18 days. Penalty for documentation failure: The concessionary penalty rates have been revised under the TP Audit Framework 2019. Accordingly, 50% of tax adjustment if the taxpayer has not prepared transfer pricing documentation. 30% if taxpayer has prepared TPD but the TPD does not comply fully with the requirements of the Transfer Pricing Guidelines. See the story in Regfollower
Panama	CbC reporting requirement-General rule: On 27 December 2019, Directorate General of Revenue of Panama has issued Resolution No. 201-9116 and 201-9117. Resolution No. 201-9116 extends the filing of Country by Country (CbC) reporting until 31 January 2020 instead of 31 December 2019. See the story in Regfollower
Qatar	BEPS related compliance-Master file/Local file: On 11 December 2019, Qatar published Executive regulations 39/2019 in the Official Gazette including new transfer pricing requirements to prepare TP documentation of Local File and Master File. The documentation requirements will apply for tax years ending 31 December 2019. See the story in Regfollower
China	Dispute resolution-Best practices: The OECD peer review report regarding China published on 28 November 2019 notes that China is in line with the BEPS Action 14 minimum standard in relation to the prevention of tax disputes and has a bilateral advance pricing agreement (APA) programme that also allows requests for roll-back of bilateral APAs. See the story in Regfollower