Australia | Special rules for hybrid instruments or entities: On 3 September 2020 amending legislation to clarifying the operation of the hybrid mismatch rules (amending legislation) received royal assent. The rules designed to prevent multinational companies from gaining an unfair competitive advantage by avoiding income tax or obtaining double tax benefits through hybrid mismatch arrangements. See the story in Regfollower |
Brazil | Dispute resolution-Arbitration: On 3 September 2020, the Bill No. 4468/2020, was published in Senate to introduce a special tax arbitration procedure. The Bill proposed that during the time of tax audit, this special tax arbitration process would be available to deal with tax disputes. See the story in Regfollower |
Chile | Master file-Threshold: According to the Resolution published on 31 August 2020, taxpayers must submit Master file by using Form 1950 if they meet certain conditions including the consolidated group revenue of the MNE group is at least EUR 750 million as of 31 December of the reporting year. Local file-General rule: Taxpayers must submit Local file by using Form 1951 if they also meet specific conditions. The submission deadline of local file is the last business day of June of the year following the reporting year, and the deadline may be extended only once, for up to three months. See the story in Regfollower |
Czech Republic | Dispute resolution-Compliance with BEPS standards: On 1 September 2020, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) entered into force for Czech Republic. See the story in Regfollower |
Ecuador | Digital economy transactions-General: On 22 August 2020, the Government published Resolution No. NAC-DGERCGC20-00000053 of 22 August 2020. Accordingly, non-resident digital service providers to persons are subject to 12% VAT rate. The new VAT will come into effect on 16 September 2020. See the story in Regfollower |
Hong Kong | Information exchange-Multilateral: On 3 September 2020, the Russian Federal Tax Service has announced that Hong Kong and Russia signed an agreement on the exchange of Country-by-Country (CbC) reports for the 2017 and 2018 reporting years. See the story in Regfollower Master file and Local file: In September 2020, the Hong Kong Inland Revenue Department (IRD) began conducting the first round of compliance reviews of the taxpayers’ transfer pricing documentation. Accordingly, taxpayers must complete and submit Form IR1475 (regarding Master and Local file) who receive notice of a compliance review from the IRD. See the story in Regfollower |
Indonesia | MAP: On 11 August 2020, the Indonesian Directorate General of Taxation posted online Regulation No. PER-16/PJ/2020, on the mutual agreement procedure (MAP) rules under DTAs. See the story in Regfollower |
Malta | Restriction on interest deduction: On 31 August 2020, the Maltese Commissioner for Revenue has issued Guidelines in relation to the Anti-Tax Avoidance Directives Implementation Regulations (ATAD) on its website. Accordingly, interest deduction limitations are applicable as from the basis year starting on or after 1 January 2019. See the story in Regfollower |
Oman | CbC reporting requirement-General rule: On 27 September 2020, Oman published Ministerial Decision No. 79/2020 in the Official Gazette announcing the introduction of CbC reporting and notification requirements for MNEs headquartered or operating in Oman. The rules are effective for financial years commencing on or after 1 January 2020. See the story in Regfollower |
Philippines | Transfer pricing information return: On 15 September 2020, the Bureau of Internal Revenue (BIR) published Revenue Memorandum Circular (RMC) No. 98-2020 to extend the submission deadline of related party transaction Form, or the Form BIR 1709. The initial extended due date is 30 September 2020 for the year ending 31 March 2020. See the story in Regfollower |
Poland | Related party definition: On 6 August 2020, the Polish Ministry of Finance has issued a guidance on whether a dividend payment among related entities falls within the scope of the definition of a “controlled transaction” for transfer pricing purposes. See the story in Regfollower Documentation-Requirement: On 16 September 2020, the Polish Council of Ministers published a draft bill amending the corporate income tax (CIT) rules to be in force from 1 January 2021. The bill proposed to extend the application of the arm’s-length rule and preparation of transfer pricing documentation, in particular where a beneficial owner (not only the counterparty) has its seat in a tax haven. See the story in Regfollower |
Singapore | APAs- Application procedure: On 8 September 2020, the Inland Revenue Authority of Singapore updated its website in a question and answer format for the guideline of transfer pricing regarding APAs in response to the Covid-19 pandemic. See the story in Regfollower |
South Korea | Compliance with BEPS standards: On 1 September 2020, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) entered into force for South Korea. See the story in Regfollower |
Thailand | Penalties for documentation failure: On 9 September 2020, the Revenue Department of Thailand announced to reduce fine for the late submission of the annual transfer pricing disclosure from THB 200,000 to THB 5,000 due to the Covid-19 pandemic, provided that the transfer pricing disclosure is submitted within 30 December 2020 through the E-Filing system. See the story in Regfollower |
Turkey | Applicable methods-Priority of methods: The Communiqué No. 4 published on 1 September 2020 removed hierarchy among transfer pricing methods and provided that the arm’s length price or values determined by utilizing the most appropriate method. CbC reporting requirement-Threshold: According to Communiqué No. 4, ultimate parent company of a group that is resident in Turkey for tax purposes and has a minimum consolidated turnover of EUR 750 million is required to prepare a CbC Report by the end of the twelfth month following its fiscal year. Master file-Threshold: Master file is prepared by corporate taxpayers who are affiliated with the MNE group and whose asset size in the balance sheet and whose net assets and net sales are both at least TRY500 million APAs- Validity: The term of the advance pricing agreement is a maximum of five years and it becomes effective within the period and conditions specified in the agreement from the date of signing. Transfer pricing information return: The annual transfer pricing report must be prepared in accordance with the format in Annex-4, until the deadline for the filing of the corporate tax return, and after the expiry of this period. Penalties for documentation failure: The Communiqué provided that the full and timely preparation of transfer pricing documentation, taxpayers may get a penalty reduction of 50% discount for taxes that have not been accrued on time due to disguised earnings or are not accrued incompletely. See the story in Regfollower |
US | Restriction on interest deduction: On 14 September 2020, the US IRS published the final regulations for the business interest expense deduction limitation published in the Federal Register. Accordingly, the business interest expense limitation has been increased from 30% to 50% of adjusted taxable income (i.e., effectively EBITDA) for tax years beginning in 2019 and 2020. See the story in Regfollower |
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