Quantera Global Newsletter - December 2023

We are pleased to share the most important national and global developments in tax law that are (closely) related to the transfer pricing world.

Please feel free to contact us if you have any questions.

Quantera Global news, developments, and blogs

• Quantera Global is strengthening its strategic position in Italy with its partnership with MUSE Strategy, a high-end consulting firm focused on transfer pricing & operational modelling, international taxation, and related business advisory services. You can find our publication here.
• On 16 November, we published a blog on Pillar One Amount B and the use of secret comparables. On 17 July 2023, the OECD/IF released a public consultation document for Pillar One Amount B, which aims to simplify pricing for baseline marketing and distribution activities. Unlike Pillar Two, there is no revenue threshold for Pillar One Amount B. You can find our blog here.
• On 30 November, we presented a webinar on financial transactions together with our business partners in India, the Netherlands, the UAE, and the United States. Attention and expertise on this topic have increased among tax authorities, leading to, among other things, more tax audits related to financial transactions.
• On 5 December, we hosted a webinar focusing on practical transfer pricing risk management and year-end actions.

Quantera Global specialties

In the past month, we have completed several challenging and interesting projects worth mentioning, such as:

• A cash pool analysis, including determining structural positions, setting at arm’s length interest rates, and determining the remuneration for the cash pool leader
• Several benchmark studies for a stock-quoted MNE with more than 20 billion turnover.

If you would like to know more about these topics, please feel free to contact us.

QG Academy Webinars

As part Quantera Global’s 10th anniversary celebrations, we are delighted to announce that we will be hosting a webinar on Scandinavia Transfer Pricing on 14 December.

For more information or to register for upcoming webinars, please visit our website: https://www.quanteraglobal.com/group-sessions/

You can watch our previous webinars here.

News from around the world

Australia

• The Australian Taxation Office has released the safe harbor interest rate for 2023-2024 income year for inbound and outbound loan options. The interest rate has been set at 5.81%.
• The Federal Court in Australia has ruled in favour of the tax authorities in the PepsiCo case, and PepsiCo is liable for royalty withholding tax and diverted profits tax. However, the decision may be subject to appeal and therefore, may be subject to further consideration by the Courts in the event of an appeal.

Azerbaijan

On 20 November, Azerbaijan signed the Multilateral Convention and joins the BEPS convention.

Belgium?

On 13 November, a draft bill was submitted to implement the EU directive on ensuring a global minimum level of taxation. The bill is expected to enter into force on 31 December 2023 and apply to fiscal years beginning on or after 31 December 2023.

Bermuda

The Bermuda government proposed draft legislation to introduce a 15% corporate income tax regime, which falls within the scope of the Pillar Two global minimum tax rules. The corporate tax regime would apply to Bermuda businesses that are part of a group with annual revenue of €750m or more.

European Commission

The Advocate General of the European Court of Justice has issued an opinion in the case European Commission vs Apple and Ireland. According to the Advocate General, the General Court committed a series of errors in law. The Commission has not sufficiently demonstrated that the profit related to the intellectual property licenses should be attributed for tax purposes to the Irish branches.

Greece

Greece has implemented the EU public country-by-country reporting directive into its national law.

Italy

The Italian Revenue Agency has issued draft guidelines open for public consultation that implement provisions regarding the investment management exemption regime. The main purpose of the guideline is to clarify the current definitions.

Kuwait

Kuwait joins the OECD/G20 Inclusive Framework on BEPS and will therefore participate in the Two-Pillar Solution and the implementation of the BEPS package.

Luxembourg

• The Luxembourg government has made multiple adjustments to the draft legislation implementing the EU directive on ensuring a global minimum level of taxation. The adjustments include several clarifications and additional provisions determined by the OECD/G20.
• The administrative court ruled in favour of a taxpayer because a loan was wrongly requalified into equity by the tax authorities.

OECD

On 14 November, the OECD released the mutual agreement procedure statistics for 2022, which covers 133 jurisdictions. Primarily, it is noted an increase in the number of MAP procedures.

Poland

The Polish Ministry of Finance has announced draft legislation extending the deadlines for transfer pricing reporting. The reporting deadline is extended to 29 February 2024 for reporting periods ending between 1 January 2023 and 30 November 2023. A 3-month extension is granted for periods ending between 1 December 2023 and 31 March 2024.

Portugal

The tax authorities have issued an assessment in which the value of shares transferred between related parties had been adjusted by application of the arm’s length principle. The Administrative Court of Appeal upheld the judgement issued by the Administrative Court and decided in favour of the tax authorities.

Vietnam

The Vietnamese national assembly has passed the resolution adopting the Pillar Two global minimum tax rules. The new rules will come into force on 1 January 2024.