Worldwide transfer pricing reference guide 2014

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Latvia (continued) Documentation requirements (continued) • Description of the selected transfer pricing method for testing compliance of the price (cost) applied to a controlled transaction with the market price (cost) • Depending on the selected transfer pricing method — financial analysis of comparable unrelated companies or analysis of price (cost) applied to comparable transactions between unrelated companies and its compliance with the market price (cost) • Other documents supporting the price (cost) applied to transactions between the taxpayer and related party — concluded agreements, documents justifying expenses, written resolutions and decisions made in board, council, shareholder and other internal meetings For non-qualifying taxpayers (with net turnover and related party transaction annual value under statutory threshold) preparation of transfer pricing documentation is optional. However, they still should comply with statutory requirement to controlled prices being at arm’s length. In practice, it means that the taxpayer may provide the State Revenue Service with transfer pricing documentation that is limited in scope, substantiating that prices applied to intercompany transactions are at arm’s length. Documentation deadlines There is no deadline set for the preparation of the transfer pricing documentation, but the relevant documentation could be required during the State Revenue Service’s tax audit. The tax audit may be initiated throughout the year, however taxable income adjustments may take place after the corporate income tax return is filed (i.e., four to seven months after the end of financial year). Transfer pricing documentation should be submitted within 30 days following a request by the State Revenue Service. Statute of limitations on transfer pricing assessments The State Revenue Service has rights to make tax assessment of local transactions within three years, and cross border transactions within five years period after the tax becomes due. Return disclosures/related party disclosures Related party transactions must be disclosed in Appendix 2 of the Corporate Income Tax return. The taxpayer should disclose the related parties involved, the types of transactions (e.g., purchase or sale of goods, services or fixed assets), volume of transactions and transfer pricing methods applied. Transfer pricing-specific returns There are no transfer pricing-specific returns in Latvia; however, related party transactions must be disclosed in Appendix 2 of the Corporate Income Tax return. Frequency of tax audit and transfer pricing scrutiny by the tax authority Small and medium taxpayers in Latvia have a medium risk of being subject to a general tax audit, while large taxpayers have a high likelihood of tax audits. All taxpayers are exposed to high risk of transfer pricing being reviewed as a part of an audit. In addition, the likelihood that if transfer pricing is reviewed as a part of the audit, the transfer pricing methodology will be challenged, is medium for taxpayers. APA opportunity A taxpayer has an opportunity to conclude an APA between the taxpayer and the State Revenue Service for cross border transaction with a related foreign company when the transaction exceeds EUR1.43 million over a period of 12 months. There are specific Cabinet Regulations regarding an APA that specify the information to be included in an APA application, describe the procedure and timeframe for concluding an APA, and set the fee for filing an APA. Expected reaction to OECD Report on BEPS Currently, no law amendments have been anticipated with respect to the OECD Report on BEPS. Worldwide transfer pricing reference guide 176
Lebanon Taxing authority and tax law The Lebanese tax regulation regarding transfer pricing is still not elaborated and clear. Article 15 of the Income Tax Law states that, if it appears that establishments of foreign companies transfer part of their profits abroad either by increasing or by decreasing purchase or sale prices, or otherwise, the profits so transferred shall, for taxation purposes, be added to the profits shown in the accounts. In the absence of sufficient evidence that would enable the determination of the real profits, the profits of a similar establishment shall be taken as a basis for comparison and determination of the profit, in addition to the apparent indications and particulars gathered by the competent financial authorities. In addition, in 2008, the parliament raised the tax procedures law. Article 10 of that law states that the tax authority has the right to reclassify certain transactions in the following instances: • Virtual transaction for the purpose of tax evasion • Legal transaction in form but for purpose of tax evasion • Transactions between related parties if these transactions are not at arm’s length Arm’s length value Arm’s length value is defined by the tax authorities under the Decision No 453/1 dated 22 April 2009, as the value of a similar transaction that occurs between independent persons and under similar comparable circumstances. Individuals are considered related if any of them holds the authority of supervision, management or control over the other or if they are related by other means such that one party is an employee of the other or if any one of them is a guardian for the other. Individuals and entities are considered related when any one of them has the authority of supervision and management over the other. Entities are considered related if one entity has the authority of supervision and management on one or several other entities. Tax evasion The tax authorities defined the tax evasion as each action taken by the taxpayer in order to reduce or eliminate the tax due, or to postpone the tax due dates, or to increase the amount of deductible or refundable tax, when it is prohibited. Worldwide transfer pricing reference guide 177
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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
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China (continued) Documentation req
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Colombia Taxing authority and tax l
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Colombia (continued) Penalty relief
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Republic of Congo Taxing authority
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Costa Rica Taxing authority and tax
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Croatia Taxing authority and tax la
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Croatia (continued) Frequency of ta
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Czech Republic Taxing authority and
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Denmark Taxing authority and tax la
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Denmark (continued) Documentation d
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Dominican Republic Taxing authority
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Dominican Republic (continued) Expe
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Ecuador (continued) Priorities/pric
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Ecuador (continued) Return disclosu
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Egypt Taxing authority and tax law
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Egypt (continued) Frequency of tax
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El Salvador (continued) Transfer pr
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Estonia Taxing authority and tax la
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Fiji Taxing authority and tax law T
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Fiji (continued) Frequency of tax a
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Finland (continued) Documentation r
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France (continued) Transfer pricing
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France (continued) Documentation re
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France (continued) Expected reactio
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Gabon (continued) Transfer pricing-
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Georgia (continued) Documentation r
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Germany Taxing authority and tax la
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Germany (continued) For late filing
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Ghana Taxing authority and tax law
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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
Page 167 and 168: Kazakhstan (continued) Frequency of
Page 169 and 170: Kenya (continued) Documentation req
Page 171 and 172: Kosovo (continued) Documentation re
Page 173 and 174: Kuwait (continued) Documentation re
Page 175: Latvia Taxing authority and tax law
Page 179 and 180: Lithuania Taxing authority and tax
Page 181 and 182: Luxembourg Taxing authority and tax
Page 183 and 184: Former Yugoslav Republic of Macedon
Page 185 and 186: Malaysia Taxing authority and tax l
Page 187 and 188: Malaysia (continued) Frequency of t
Page 189 and 190: Maldives (continued) Statute of lim
Page 191 and 192: Malta (continued) Return disclosure
Page 193 and 194: Mauritius (continued) APA opportuni
Page 195 and 196: Mexico (continued) Transfer pricing
Page 197 and 198: Mexico (continued) Return disclosur
Page 199 and 200: Montenegro (continued) Frequency of
Page 201 and 202: Morocco (continued) Transfer pricin
Page 203 and 204: Myanmar Taxing authority and tax la
Page 205 and 206: Namibia Taxing authority and tax la
Page 207 and 208: Netherlands Taxing authority and ta
Page 209 and 210: Netherlands (continued) Statute of
Page 211 and 212: New Zealand Taxing authority and ta
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Page 215 and 216: Nigeria Taxing authority and tax la
Page 217 and 218: Norway Taxing authority and tax law
Page 219 and 220: Norway (continued) Frequency of tax
Page 221 and 222: Oman (continued) Frequency of tax a
Page 223 and 224: Panama Taxing authority and tax law
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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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Worldwide transfer pricing reference guide 2014

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