India:

Comparable Data Range: The company having high or extremely high profits and losses should not be the only consideration to exclude as a comparable company for purposes of determining the arm’s length price but other matters like detailed analysis of services provided, assets employed and risks assumed must need to be considered as the Delhi High Court confirmed a verdict on this.

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OECD:

Exemption from CbC reporting requirement: The OECD has proposed an exemption from the CbC reporting rules for groups with annual consolidated revenue in the immediately preceding year of less than €750 million.

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Australia:

OECD’s new transfer pricing documentation: The 2015-2016 fiscal budget papers state that Australia ‘will implement the OECD’s new transfer pricing documentation standards from 1 January 2016’ for corporate groups with global revenue exceeding A$1bn. The expected documentation will have to include all three elements of the OECD package. The requirement will include a requirement to give details of profits and tax paid.

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Thailand:

Documentation requirement: Multinational enterprises in Thailand would be subject to the new transfer pricing rules as the cabinet has approved draft transfer pricing legislation. As per the draft rules, transfer pricing documentation would be required to be submitted within 150 days after the last day of the accounting period.

Penalty for documentation failure: As per the draft transfer pricing rules, a taxpayer’s failure to prepare or submit the complete documentation would be subject to a penalty, of up to 400,000 THB which is approximately U.S. $120,000.

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Italy:

Advance Pricing Agreement (APA): The approved draft decree extends the potential APA scope to cover exit and entry values of assets and liabilities in the event of outbound and inbound transfers of tax residence. The approved draft decree introduces roll-back provisions for all APAs.

Cost contribution arrangements: As per the approved draft decree, the cost deriving from transactions with black-listed entities resident in tax havens will be deductible up to their “normal value” provided the underlying transactions have actually taken place.

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Poland:

Control: The management or control shareholding of a taxpayer qualifying as a related party for transfer pricing purposes will be 20% (Previously 5%) as the Minister of Finance released for public consultation a bill introducing this change.

Documentation threshold: As per the released bill by the Minister of Finance for public consultation, a taxpayer that is part of a multinational corporate group with annual income or expenses of at least €10 million, or making payments to entities registered in low-tax jurisdictions, will be required to prepare and deliver a simplified report on transactions with associated entities. Taxpayers with annual income below €2 million will fall outside the scope of transfer pricing documentation requirements.

BEPS related compliance:

Master file: As per the released bill by the Minister of Finance for public consultation, a taxpayer that is part of a multinational corporate group with annual income or expenses of at least €20 million will be required to prepare and deliver a master file report containing standardized information relevant to all group members.

Local file: As per the released bill by the Minister of Finance for public consultation, a taxpayer that is part of a multinational corporate group with annual income or expenses of at least €20 million will be required to prepare and deliver a local file specifically related to transactions carried out by the taxpayer.

CbC reporting requirement: As per the released bill by the Minister of Finance for public consultation, a resident entity that is part of a multinational corporate group with annual consolidated income of at least €750 million will be required to prepare a comprehensive report reflecting the activities and taxes paid in each country in which the group operates, i.e., the country-by-country reports (CbCR).

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