Quantera Global Newsletter - September 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

Quantera Global news, developments, and blogs

Quantera Global specialties

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

• We supported one of our clients with operational transfer pricing challenges, improving their monitoring capabilities and at arm’s length price testing.??
• We performed debt capacity analyses for large loan transactions to substantiate the amount of equity that should be in place at the level of the borrower.??
• We performed several financial transactions analyses to substantiate at arm’s length interest rates for intercompany loans . These analyses are used for setting at arm’s length interest rates on newly issued loans, as well as testing the arm’s length nature of historically set interest rates.?

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

QG Academy Webinars

As part of the 10th anniversary series of country/region specific webinars, we are hosting a webinar on 21 September in cooperation with Steven Carey, managing director of Kroll Hong Kong.??

This webinar will focus on transfer pricing and related topics from an Asian perspective, and we will provide you with some takeaways for your practice.?

During this webinar, the following topics will be discussed:?

• TP audit trends in Asia?
• Defending Covid-19 losses in your Asia business?
• Transfer pricing models for Asia procurement?
• The ongoing challenge of cash repatriation from China?

We have also scheduled the following webinars:?

• 12 October on Dubai?
• 16 November on Baltics?

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

You can watch our previous webinars here .

News from around the world

Aruba

The Parliament of Aruba approved tax legislation which introduces new tax on import goods, import duty changes and an expanded investment allowance on foreign investments.??

Bermuda

Bermuda is exploring the introduction of a corporate income tax rate that will be taken into account when calculating the effective tax rate of companies subject to the OECD global minimum tax rule. Currently, the government of Bermuda considers a rate within a range of 9 to 15% appropriate which will apply on fiscal years beginning on or after 1 January 2025.??

Brazil

Brazil aims to reduce compliance costs and thereby encourage compliancy for taxpayers and tax administrations with the introduction of Complementary Law number 199. The tax administrations are granted the authority to share tax and registration data whenever this is deemed to be necessary.??

Canada

The Department of Finance announced revised draft legislation containing rules on the Pillar Two global minimum tax rules, digital service tax (DST) and on excessive interest and financing expenses limitation (EIFEL).??

Chile

The Chilean government has presented a reform plan to counter tax evasion and making tax changes to increase revenue. The new plan consists of six components. The new plan is likely to be presented in the Senate in March 2024.??

Germany

The Ministry of Finance published the approved draft legislation implementing the EU Directive on global minimum level of taxation for multinational enterprises.??

Luxembourg

Luxembourg issues a new bill of law transposing the EU Directive on minimum taxation (Pillar Two ) into domestic law. The new law will come into force on 31 December 2023.?

South Africa

In South Africa, legislation was proposed to introduce an APA program. The APA Program begins with a pilot program under which only bilateral APA applications will be granted.

South Korea

The Ministry of Economy and Finance announced tax reform proposals for 2023. The proposal adjusts and adds global minimum tax rules. The reform will have effect for fiscal years beginning on or after 1 January 2024.??

The Netherlands

The Court in The Hague ruled that there was no reversal of the? burden of proof when the tax payer initially (when the loan was issued) did not have substantiation in place for at arm’s length terms & conditions on a loan facility, but prepared the documentation at a later stage. The substantiation provided by the tax payer was accepted by the Court for the applied interest rates, but not for the applied commitment fee.??

Israel

The Israeli tax authorities have published the Tax Circular 1/2023 which aims, among other things, to clarify procedures for mutual agreements and advance pricing agreements.?