A transfer pricing Bill to amend the legislation with regard to transfer pricing and introduce best practice was registered with parliament on 12 March 2013. The Tax and Customs Committee of parliament has confirmed that the Transfer Pricing Bill has now been approved by parliament. Although the Bill was originally expected to go into effect from 1 July 2013 it now appears that is will be effective as of January 1, 2014.
The Bill would define controlled transactions and remove the current safe harbor rule. Procedures for using the transfer pricing methods would be used. The Bill introduces reporting requirements for transfer pricing and also introduces penalties for taxpayers who do not comply with the provisions of the transfer pricing rules.
As a temporary relief for taxpayers, a 2-year ban on audits of transfer pricing issues and the assessment of penalties is expected.
