Worldwide transfer pricing reference guide 2014

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Georgia (continued) APA opportunity (continued) impossible to conclude multilateral APA’s at this stage. Expected reaction to OECD Report on BEPS The expected reaction to OECD Report on BEPS is unknown as of January 2014. Worldwide transfer pricing reference guide 116
Germany Taxing authority and tax law Taxing authority: German taxes are administered either by the German Federal Central Tax Office (Bundeszentralamt für Steuern) or by German state authorities. Tax law: German tax law is found in tax acts, executive order laws, double taxation treaties and supra-national norms. Relevant regulations and rulings The taxing authorities assess intercompany transactions by following the arm’s length principle (§1 Foreign Tax Act). The German interpretation of the arm’s length principle generally follows the definition in Article 9 of the OECD Model Tax Convention. However, a relevant intensification, §1 Sentence 2 Foreign Tax Act stipulates that for the interpretation of the arm’s length principle, it is assumed that both parties involved in an intercompany transaction have full knowledge about all facts and circumstances (information transparency). Detailed transfer pricing regulations concerning the cross-border transfer of functions were incorporated into §1 Foreign Tax Act on 1 January 2008. An Executive Order Law providing details on how the new transfer pricing provisions relate to business restructurings and function transfers is effective from 2008 onwards. In October 2010, new Administration Principles were released that include 81 pages of clarifications concerning the application of §1(3) of the Foreign Tax Act and the Executive Order Law on Transfer of Business Functions. The Administration Principles detail, for example, circumstances under which a business restructuring and function transfer would be exempt from the taxable valuation of the so called “transfer package.” In such cases, the receiving entity of a function exclusively performs the transferred function for the transferring entity and receives a cost-based remuneration (i.e., based on the cost plus method or a cost-based TNMM), in accordance with the arm’s length principle. In such cases, it is assumed that the transfer package did not include any significant intangible property or other advantages and, thus, a valuation of the transfer package is not required. This exemption from examination of the transfer package generally affects the transfer of routine functions whose execution is connected with low risks and that, as a consequence, are usually remunerated on the basis of the cost plus method. As of 1 January 2013, a law amending §1 of the Foreign Tax Act has come into effect, which incorporates the authorized OECD approach (AOA) on the allocation of profits to permanent establishments into German law. The AOA treats a permanent establishment as a (nearly) fully separate entity for tax purposes. This includes the recognition of internal dealings between the head office and a foreign permanent establishment such as the supply of goods, a service provision and even licensing arrangements. These dealings have to be priced in accordance with the arm’s length principle, i.e., including a profit element. Due to the lack of legally binding contracts between the different parts of one enterprise, contemporaneous transfer pricing documentation becomes crucial in order to defend the transfer prices applied for internal transactions. The new domestic rules stipulate that Germany will not tax the profits of the permanent establishment that are determined based on the AOA, if the AOA is not yet implemented in the applicable double tax treaty. However, for the treaty relief the taxpayer has to “prove” that the other Contracting State does not apply the AOA and that this will lead to double taxation. Other relevant provisions for transfer pricing issues in German tax law are: • § 8 (3) German Corporate Income Tax Act (hidden profit distribution) • § 4 (1) German Income Tax Act with Directive R40 of the German Corporate Tax Directives (hidden capital injection) • § 90 (3), 162 (3) and 162 (4) German General Tax Code and the Executive Order Law to § 90 (3) German General Tax Code To help interpret the above outlined provisions, the German tax authority issued a circular on the Principles Governing the Examination of Income Allocation between Multinational Enterprises in 1983, known as the Administration Principles. The Administration Principles do not constitute binding law for taxpayers or the courts, but are binding for the tax authority and, thus, indicate how the tax authority will treat specific intercompany transactions between related parties. The purpose of the Administration Principles is to provide a directive concerning the tax audit treatment of transfer pricing cases, and to ensure the uniform application of rules and methods. In addition to the two Administration Principles mentioned above, administration circulars concerning income allocation with regard to cross-border secondment of personnel, costs contribution arrangements and procedural guidance have been published since 1999. Worldwide transfer pricing reference guide 117
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Worldwide Transfer Pricing Referenc
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Worldwide transfer pricing referenc
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Nigeria 215 Norway 217 Oman 220 Pak
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The content is current as of 28 Feb
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CUP (comparable uncontrolled price)
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Albania (continued) Priorities/pric
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Algeria Taxing authority and tax la
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Algeria (continued) Return disclosu
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Angola (continued) Transfer pricing
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Argentina Taxing authority and tax
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Argentina (continued) Transfer pric
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Australia Taxing authority and tax
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Australia (continued) Priorities/pr
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Australia (continued) Documentation
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Australia (continued) Frequency of
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Austria (continued) Documentation r
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Bahrain Taxing authority and tax la
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Bangladesh (continued) Penalty reli
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Belgium Taxing authority and tax la
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Belgium (continued) Statute of limi
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Bolivia Taxing authority and tax la
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Botswana Taxing authority and tax l
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Brazil (continued) Relevant regulat
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Brazil (continued) Priorities/prici
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Brunei Taxing authority and tax law
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Bulgaria (continued) Transfer prici
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Bulgaria (continued) Return disclos
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Cameroon Taxing authority and tax l
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Canada Taxing authority and tax law
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Canada (continued) Documentation re
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Chile Taxing authority and tax law
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Chile (continued) Return disclosure
Page 65 and 66: China (continued) Documentation req
Page 67 and 68: Colombia Taxing authority and tax l
Page 69 and 70: Colombia (continued) Penalty relief
Page 71 and 72: Republic of Congo Taxing authority
Page 73 and 74: Costa Rica Taxing authority and tax
Page 75 and 76: Croatia Taxing authority and tax la
Page 77 and 78: Croatia (continued) Frequency of ta
Page 79 and 80: Czech Republic Taxing authority and
Page 81 and 82: Denmark Taxing authority and tax la
Page 83 and 84: Denmark (continued) Documentation d
Page 85 and 86: Dominican Republic Taxing authority
Page 87 and 88: Dominican Republic (continued) Expe
Page 89 and 90: Ecuador (continued) Priorities/pric
Page 91 and 92: Ecuador (continued) Return disclosu
Page 93 and 94: Egypt Taxing authority and tax law
Page 95 and 96: Egypt (continued) Frequency of tax
Page 97 and 98: El Salvador (continued) Transfer pr
Page 99 and 100: Estonia Taxing authority and tax la
Page 101 and 102: Fiji Taxing authority and tax law T
Page 103 and 104: Fiji (continued) Frequency of tax a
Page 105 and 106: Finland (continued) Documentation r
Page 107 and 108: France (continued) Transfer pricing
Page 109 and 110: France (continued) Documentation re
Page 111 and 112: France (continued) Expected reactio
Page 113 and 114: Gabon (continued) Transfer pricing-
Page 115: Georgia (continued) Documentation r
Page 119 and 120: Germany (continued) For late filing
Page 121 and 122: Ghana Taxing authority and tax law
Page 123 and 124: Ghana (continued) APA opportunity T
Page 125 and 126: Greece (continued) Transfer pricing
Page 127 and 128: Guatemala Taxing authority and tax
Page 129 and 130: Honduras Taxing authority and tax l
Page 131 and 132: Hong Kong (SAR) Taxing authority an
Page 133 and 134: Hong Kong (SAR) (continued) APA opp
Page 135 and 136: Hungary (continued) Priorities/pric
Page 137 and 138: Hungary (continued) Documentation r
Page 139 and 140: Iceland Taxing authority and tax la
Page 141 and 142: India Taxing authority and tax law
Page 143 and 144: India (continued) Documentation req
Page 145 and 146: Indonesia Taxing authority and tax
Page 147 and 148: Indonesia (continued) Frequency of
Page 149 and 150: Ireland Taxing authority and tax la
Page 151 and 152: Ireland (continued) Frequency of ta
Page 153 and 154: Israel (continued) Priorities/prici
Page 155 and 156: Italy Taxing authority and tax law
Page 157 and 158: Italy (continued) Transfer pricing
Page 159 and 160: Italy (continued) Frequency of tax
Page 161 and 162: Japan (continued) Transfer pricing
Page 163 and 164: Japan (continued) APA opportunity U
Page 165 and 166: Kazakhstan Taxing authority and tax
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Kazakhstan (continued) Frequency of
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Kenya (continued) Documentation req
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Kosovo (continued) Documentation re
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Kuwait (continued) Documentation re
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Latvia Taxing authority and tax law
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Lebanon Taxing authority and tax la
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Lithuania Taxing authority and tax
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Luxembourg Taxing authority and tax
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Former Yugoslav Republic of Macedon
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Malaysia Taxing authority and tax l
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Malaysia (continued) Frequency of t
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Maldives (continued) Statute of lim
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Malta (continued) Return disclosure
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Mauritius (continued) APA opportuni
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Mexico (continued) Transfer pricing
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Mexico (continued) Return disclosur
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Montenegro (continued) Frequency of
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Morocco (continued) Transfer pricin
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Myanmar Taxing authority and tax la
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Namibia Taxing authority and tax la
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Netherlands Taxing authority and ta
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Netherlands (continued) Statute of
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New Zealand Taxing authority and ta
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New Zealand (continued) Frequency o
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Nigeria Taxing authority and tax la
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Norway Taxing authority and tax law
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Norway (continued) Frequency of tax
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Oman (continued) Frequency of tax a
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Panama Taxing authority and tax law
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Panama (continued) Expected reactio
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Papua New Guinea (continued) Docume
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Peru Taxing authority and tax law T
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Peru (continued) Frequency of tax a
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Philippines (continued) Transfer pr
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Poland Taxing authority and tax law
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Poland (continued) Transfer pricing
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Poland (continued) Return disclosur
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Poland (continued) APA opportunity
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Portugal (continued) Transfer prici
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Portugal (continued) APA opportunit
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Qatar (continued) OECD guidelines t
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Qatar (continued) Return disclosure
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Romania (continued) Documentation r
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Russian Federation Taxing authority
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Russian Federation (continued) Freq
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Saudi Arabia (continued) Transfer p
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Senegal (continued) Documentation r
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Serbia Taxing authority and tax law
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Singapore Taxing authority and tax
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Singapore (continued) Frequency of
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Slovak Republic (continued) Documen
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Slovenia Taxing authority and tax l
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Slovenia (continued) Transfer prici
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South Africa (continued) Penalty re
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South Korea (Republic of Korea) Tax
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South Korea (Republic of Korea) (co
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Spain (continued) Penalty relief So
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Spain (continued) APA opportunity T
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Sri Lanka (continued) Return disclo
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Sweden (continued) Documentation re
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Switzerland Taxing authority and ta
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Taiwan Taxing authority and tax law
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Taiwan (continued) Return disclosur
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Tanzania Taxing authority and tax l
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Thailand Taxing authority and tax l
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Thailand (continued) Frequency of t
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Turkey (continued) Priorities/prici
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Uganda Taxing authority and tax law
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Ukraine Taxing authority and tax la
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Ukraine (continued) Transfer pricin
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United Kingdom Taxing authority and
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United Kingdom (continued) Transfer
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United States (continued) Transfer
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Uruguay Taxing authority and tax la
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Uruguay (continued) APA opportunity
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Venezuela Taxing authority and tax
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Venezuela (continued) Expected reac
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Vietnam (continued) Relevant regula
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Vietnam (continued) Documentation d
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Zimbabwe Taxing authority and tax l
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Zimbabwe (continued) Relevant regul
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Transfer pricing contacts Area cont
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Jurisdiction contacts • El Salvad
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Jurisdiction contacts • Rep. of C
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EY | Assurance | Tax | Transactions
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Worldwide transfer pricing reference guide 2014

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