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India: |
Comparable data range: The Punjab and Haryana High Court confirmed a judgment in the case of CIT-I v. DSM Anti Infectives India Ltd. ITA No. 116 of 2014 of a tax appellate tribunal that certain companies could be appropriate comparable companies, irrespective of the percentage of their use of a key raw material, provided that the companies selected are functionally comparable and they need not be identical.See the Story in Regfollower
Number of years to be compared: The Delhi Bench of the Income Tax Appellate Tribunal upheld a decision in the case of DCIT v. Innodata Isogen India Pvt. Ltd. in ITA 1528/Del/2011 of the Commissioner of Income Tax (Appeals) to allow the taxpayer to use multiple-year data in determining the arm’s length price. Primary adjustment: The Income-tax Appellate Tribunal upheld an interest adjustment on a loan that the taxpayer advanced to a related entity in the case of Soma Textile & Industries Ltd. v. ACIT. The tribunal found that the comparable uncontrolled price of a “quasi capital loan” cannot be nil unless the loan was only made for a transitory period of time and date. |
| Poland: | Control: In the second draft, the management or control shareholding of a taxpayer qualifying as a related party for transfer pricing purposes has been increased to 25% which was proposed as 20% in the first draft.Documentation requirement: The second draft provides the tax authorities may request documentation concerning transactions or events if it is probable that the value of the transaction was intentionally reduced to avoid the documentation requirement and the time for submitting this documentation would be 30 days from the date of the request not the standard deadline of seven days.
Documentation thresholds: The first draft would have required documentation by taxpayers whose revenues or costs exceed €2 million without considering the degree of influence of the transaction on the level of income or loss. As per the second draft, documentation would be determined by reference to those transactions that have a “significant influence” on the level of income or loss. |
| Germany: | Documentation requirement: The Government of Germany has announced plans to incorporate guidance on transfer pricing documentation and country-by-country (CbC) reporting of the OECD’s Base Erosion and Profit Shifting (BEPS) project into local legislation. The law shall be passed by the parliament by the end of the year so that the new regulation can come into force from 2016.See the Story in Regfollower |
| Sri Lanka: | Specific transfer pricing compliance: Inland Revenue gazette no. 1907/26 dated 25 March 2015 on Transfer Pricing Regulations requires certificate of approved accountant in relation to transactions with associated undertakings for any year of assessment commencing on or after 01 April, 2015.See the Story in Regfollower |
| Spain: | BEPS Country by Country (CbC) reporting enacted: The Spanish Ministry of Finance published the Royal Decree 634/2015 of 10 July 2015 in the Official Gazette on 11 July, 2015 and enacted the BEPS Country by Country reporting requirement.Master file information and structure: There is no specific provision regarding information in master file for BEPS requirements. Spain has introduced a requirement for a master file in line with the EU TPD. This new transfer pricing documentation will come into effect in the tax periods starting on and after January 1, 2016. The reporting structure of master file is in line with EU TPD.
Local file information: No specific provision for BEPS requirements for local file information. Spain has introduced a requirement for a local file in line with the EU TPD. General rule for CbC reporting requirement: A parent company must submit a report for the entities in the group covering profits and tax in each jurisdiction, average employee numbers, tangible and real estate assets, share capital and equity in relation to the companies in the group. Parent company: The CbC report must be submitted by a company resident in Spain that is the parent company of a corporate group. A parent company is a company that is not a subsidiary of any other company whether resident or non-resident in Spain. Definition of group: The country by country reporting requirement applies where the consolidated group revenue in the preceding year exceeded EUR 750 million. Profits and tax paid: The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax. Employees: The average number of employees in each entity must be reported. Assets: Assets include tangible assets and real estate interests. Timing: The CbC report must be submitted within twelve months after the end of the tax year. Review time: No specific provision is given on review time. Penalty for non-compliance: No specific penalty provision in relation to BEPS reporting requirements. |
| Australia: | Availability of APA: The updated guidance which was provided in the form of Practice Statement PSLA 2015/4 by the Australian Taxation Office (ATO) on July 23, 2015 sets out revised policies and procedures for the Advance Pricing Agreements (APA) program and replaced the existing PSLA 2011/1.Authority: A formal APA Program Management Unit was enacted. Practice Statement Law Administration PSLA 2015/4 which sets out the procedure.
Rules: Practice Statement Law Administration PSLA 2015/4 sets out the rules. |
| Greece: | Control: Greek Ministry of Finance’s circular no. POL 1142/02.07.2015 of July 2, 2015 clarifies on the concept of the associated or connected person.Documentation requirement: Greek Ministry of Finance’s circular no. POL 1142/02.07.2015 of July 2, 2015 clarifies the benchmarking studies to be used for documentation as per the new Income Tax and Tax Procedures Codes which affects the intercompany transactions relating to fiscal years starting from 1 January 2014 onward. It is clarified that a foreign legal person or entities, acquiring income in Greece from the exploitation of immovable property are subject to transfer pricing documentation requirements as per the Greek legislation, even if no permanent establishment exists in Greece.
Comparable data range: Greek Ministry of Finance’s circular no. POL 1142/02.07.2015 of July 2, 2015 clarifies the calculation of the interquartile range. Useful database for comparable data: Greek Ministry of Finance’s circular no. POL 1142/02.07.2015 of July 2, 2015 clarifies on the use of databases for the comparable company search. |
| Mexico: | Transfer pricing compliance: The Mexican Tax Administration Service has published the new revised software version of Appendix 9 as per BEPS action plan. The revised version of Appendix 9 is effective from the day of its publication, for fiscal year 2014 and all subsequent fiscal years. It includes 57 fields of information broken down by type of transaction and allows up to 40,000 transactions to be reported.See the Story in Regfollower |
