AustraliaFinancial transactions-Restriction on interest deduction: On 10 December 2020, the Australian Taxation Office (ATO) issued final transfer pricing guidance on interest-free loans between related parties, in “Schedule 3 – Interest-free loans” to the ATO’s financing Practical Compliance Guideline (PCG 2017/4).
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APAs-Application procedure: On 3 December 2020, the Australian Taxation Office (ATO) published an updated law administration practice statement about the advance pricing arrangements (APA) program.
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AustriaRestriction on interest deduction: On 17 December 2020, the Parliament approved winter package due to COVID-19 pandemic. Accordingly, the standard 30% of EBITDA limitation with a EUR 3 million safe harbor and more than interest expense or unused interest capacity allowed to be carried forward up to five years.
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BulgariaDocumentation-Timing and deadlines: On 11 December 2020, the Bulgarian Government published the amendments to the Act on Tax and Social Security Procedure Code (TSPC) in the State Gazette. According to the amendments of Art. 71d, para. 1 of the TSSPC (adopted by the VAT Act), a new deadline has been set for the preparation of the transfer pricing documentation from 31 March to 30 June of the following year.
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CyprusCbC reporting requirement-General rule: On 15 December 2020, the Cyprus Tax Department announced an extension to 31 January 2020 for the reporting deadline of CbC reports for the year 2019 and notifications for the year 2020.
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EstoniaScope of transfer pricing rules: On 12 December 2020, the Estonian Parliament has adopted the Tax Information Exchange Act Amendment Act on its website regarding deferral of DAC6.
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Compliance with BEPS standards: On 9 December 2020, the Estonian Parliament (Riigikogu) has adopted Bill No. 286 SE to amend a Law on the Ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
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FinlandCbC reporting requirement-General rule: On 4 December 2020, the Finnish tax authority has updated its CbC reporting guidance concerning changes in the Country-by-Country (CbC) reporting XML schema to Version 2.0. The tax authority also released updated Technical Guidance containing instructions for the files in the XML format, to be compliant with the 2.0 version.
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GermanyMaster file & Local file: On 3 December 2020, the Federal Ministry of Finance (BMF) has published the Administrative Principles 2020 which contains the updated requirements for transfer pricing documentation in accordance with Section 90 (3) of the of the GTC.
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Compliance with BEPS standards: On 27 November 2020, Germany published the law in the Official Gazette to ratify the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
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IrelandCbC reporting requirement-General rule: On 30 November 2020, the Irish Revenue published an eBrief 216/20 on a new Tax and Duty Manual Part 38-03-21, which provides details of the release of CbC User Guide Version 2.0 and CbC XML Schema Version 2.0, which will be in use from 1 February 2021.
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ItalyMAP: On 16 December 2020, the Italian tax authority published regulations to implement new tax dispute resolution mechanisms and mutual agreement procedure (MAP). The regulations indicate a list of documents to be attached to the MAP request and the procedures to be followed by the taxpayer and the tax authorities under the MAP procedures.
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KenyaDigital economy transactions-General: On 16 December 2020, the Kenya Revenue Authority (KRA) published the final Income Tax (Digital Service Tax) Regulations, 2020 to implement the digital services tax. The DST rate is 1.5% of the gross transaction value and will be payable at the time of the payment transfer to the service provider.
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MalaysiaPenalties for documentation failure: The 2020 Finance Act included the new Section 113 (B) that penalizes a taxpayer for failing to submit transfer pricing documents in a timely manner with a fine of RM 20,000 to RM 100,000 or upon conviction, a fine of RM 20,000 to RM 100,000 or imprisonment for a term not exceeding six months, or both.
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MoroccoMaster file & Local file: On 18 December 2020, Morocco’s Ministry of Finance has published the Finance Law for 2021 in the Official Gazette. New rules on the electronic submission of the Master file and Local file transfer pricing documentation are provided in the law.
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NamibiaCompliance with BEPS standards: On 9 December 2020, Namibia deposited its ratification instrument for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
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NetherlandsMain corporate income tax rate: The Dutch Ministry of Finance has issued an overview of the main tax changes for 2021, which were approved by the Senate on 15 December 2020. Accordingly, the lower corporate income tax (CIT) rate is reduced from 16.5% to 15.0%, with an increase in the lower rate threshold from EUR 200,000 to EUR 245,000 in 2021 and a further increase to EUR 395,000 scheduled in 2022. The higher CIT rate remains 25%.
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OmanCbC reporting requirement-Deadlines: The Tax Authority announces an extension in relation to the deadline for filing the CbC notification under Article (5) of the aforementioned decision for entities whose reporting fiscal year ends 31 December 2020. The deadline has been extended up to April 30, 2021.
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PeruFinancial transactions-Restriction on interest deduction: On 10 November 2020, the Peruvian Tax Administration (SUNAT) has published Report No. 093-2020-SUNAT/7T0000 on its website, which clarifies the interest deduction limitations rules.
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CbC reporting requirement-Deadlines: On 2 December 2020, the Peruvian tax authorities (SUNAT) has declared that the deadlines for the secondary local (Peruvian) filing of the country-by-country (CbC) reports for fiscal years (FY) 2017, 2018, and 2019 is 29 January 2021.
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CbC reporting requirement-General rule: On 16 December 2020, the Peruvian tax authorities (SUNAT) has released frequently asked questions (FAQ) in Spanish providing an elaborate description of country-by-country (CbC) reporting.
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PhilippinesTransfer pricing information return: On 18 December 2020, the Bureau of Internal Revenue (BIR) published a Revenue Regulations (RR) No. 34-2020, which set out new guidelines and procedures for filing BIR Form No. 1709, the RPT (Related Party Transaction) form, as well as transfer pricing documentation and other supporting documentation.
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PolandComparable uncontrolled price method (CUP): On 18 December 2020, Poland’s Ministry of Finance has launched a public consultation on draft tax guidance regarding clarifications on transfer pricing regarding the comparable uncontrolled price method. The comments are due by January 31, 2021.
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Local file-Threshold: On 30 November 2020, the act amending the Corporate Income Tax Act was published in the Polish Journal of Laws which tighten up transfer pricing documentation for transactions with tax havens including by increasing the value of the transaction amount obliging to prepare transfer pricing documentation (Local file) from PLN 100,000 to PLN 500,000.
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RussiaInformation exchange-Multilateral: On 10 December 2020, Russia has published an order of the Federal Tax Service amending the list of Territories and States with which Russia will automatically exchange Country-by-Country (CbC) reports. The Order entered into force on 21 December 2020.
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SpainCompliance with BEPS standards: On 2 December 2020, the Spanish Senate adopted the law for the ratification of BEPS MLI. On 7 June 2017, Spain signed the Multilateral Instrument (MLI).
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Sri LankaMaster file & CbC reporting requirement: On 23 November 2020 Sri Lanka Inland Revenue has issued a notice regarding postponement of filing transfer pricing documentations of Master file and CbCR in relation to the return of income year of assessment 2019/2020. Accordingly, the requirement to submit the Master file and CbC report will commence from the year of assessment 2020/2021, instead of 2019/2020.
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Scope of transfer pricing rules: According to the notice of 25 November 2020, under the Regulation 1 of the TP Gazette, transfer pricing regulations inter alia, are applicable to the local transactions made between associated enterprises (AE) as referred to in section 77 of the Inland Revenue Act No 24 of 2017 (IRA) provided one of such AE had been granted any tax exemptions or subject to different tax rates.
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TaiwanApplication to intangibles: On 28 December 2020, Taiwan’s Ministry of Finance (MOF) has announced an amendment to update the country’s transfer pricing regulations. Accordingly, the definition of intangible assets is updated which includes the additional clarification that intangible assets include assets that are capable of being owned or controlled for use in commercial activities.
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TurkeyCbC reporting requirement-Deadlines: On 17 December 2020, the Turkish Revenue Administration has issued Circular No. TF-2 / 2020-1 on its website, by which Turkey extends country-by-country (CbC) report filing deadline to 26 February 2021.
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UkraineScope of transfer pricing rules: On 17 December 2020, the Ukrainian Parliament has accepted a tax reform bill, which contains the amended definition of permanent establishment (PE) including the requirement that all PEs need to compute their taxable income according to the arm’s length principle.
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