End of Q1 2023 – what obligations must be met? For most taxpayers operating in corporate groups the end of March 2023 is associated with the deadlines for meeting the last transfer pricing obligations. Some of them still apply to 2021. TPR for companies with a shifted tax year As a rule, in previous years…
The instrument of recharacterization and non-recognition of transactions was introduced to the transfer pricing regulations on 1 January 2019. Tax authorities may decide that in comparable circumstances third parties would not have made a given controlled transaction or would have entered into a different transaction (the so-called ‘proper transaction’). If that is the case, the…
Today we are addressing formal conditions to be met only in the case of in minus adjustments. Condition 3: TP adjustment in the books of both transacting parties The taxpayer must have a statement from a related entity or an accounting evidence confirming that the entity made the TP adjustment in the same amount as…
Correctly classifying a brokerage transaction has certainly not been intuitive for taxpayers. Making such transactions between related entities adds complexity to the matter. The challenge for the taxpayer is both determining the value of such a transaction and establishing the appropriate documentation threshold for it under transfer pricing regulations. This may result in the taxpayer’s…
In a recent blog entry we wrote that according to the position of the tax authorities, the choice of a simplified form of taxation (the lump sum on the income of companies called Estonian CIT) does not exclude the application of transfer pricing regulations. At the same time, we highlighted doubts and practical problems that…
In the regulations is lack a definition of a transfer pricing adjustment (TP adjustment). However, it can be concluded based on the Clarifications of the Ministry of Finance that the purpose of a TP adjustment is to adjust (correct, amend) a transfer price to the level in line with the arm’s length principle in a…
Identifying documentation obligations is a key step in completing the tasks imposed by the transfer pricing regulations. Under the applicable regulations, the concept of a controlled transaction should be interpreted broadly. As a consequence, a number of business activities that are seemingly not subject to transfer pricing regulations may in practice trigger documentation obligations. An…
On 1 February, OECD released a Manual on the Handling of Multilateral Mutual Agreement Procedures and Advance Pricing Arrangements (MoMA). As a reminder, in 2022, OECD Manual on Bilateral APAs was published. MAP and APA are procedures designed to ensure the security of the taxpayer in the field of controlled transactions. They allow the acceptance…
The deadline for submitting the CBC notification (CBC-P) for 2022 to the Head of KAS is coming soon – 31 March 2023 (for all entities whose financial year matches the calendar year). This obligation covers entities belonging to capital groups that are subject to the CBC-R. Who? The obligation applies to entities (which are…
Although part of business operations for years, capital transactions raise doubts among taxpayers from transfer pricing perspective. This category includes the sale of shares between related parties, which – if the statutory documentation threshold is exceeded – triggers TP obligations. Nevertheless, each transaction of sale of shares should be valued at arm’s length. Such a…