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TPS Newsletter – September 2022


Transfer pricing developments around the world

  • Denmark:

The Danish Eastern High Court (Østre Landsret) gave its decision in case Sag BS-11370/2020-OLR.

The Court considers in the specific case that:

  • The Tax Administration may make a tax assessment on a discretionary basis if the company has not prepared the mandatory transfer pricing documentation.
  • However, the fact that doubts are raised about the comparability analysis performed by the taxpayer in the transfer pricing documentation cannot lead the Tax Administration to consider that there is a lack of documentation.

On the other hand, it should be noted that the Danish Supreme Court (“The Danish Supreme Court”) has ruled in different cases (UfR 2019.1446, UfR 2020.3156 and UfR 2021.3179), stating that, if the documentation is so deficient that it does not provide a sufficient basis for assessing whether the arm’s length principle has been met, it should be equated to lack of documentation.

  • Italy

Banca Generali has announced the signing of an agreement with the Italian tax authorities, setting out the terms and conditions for the resolution of tax claims related to transfer pricing issues for the tax years 2014 to 2019. Under the agreement, Banca Generali will pay €45.99 million, of which €5.29 million will be interest.

In terms of transfer pricing, it is important to note that no penalties will apply due to the penalty protection regime. The penalty protection regime was introduced in Italy in 2010. In order to benefit from it, the documentation must be available to the tax authorities prior to the filing of the corporate income tax.

Additionally, from the 2020 fiscal year onwards, the documentation has to be digitally signed with a date prior to the filing of the tax.

  • Paraguay

The Tax Administration of Paraguay has published the list of countries that are considered tax havens. In that sense, with effect from 2021 onwards, taxpayers that carry out transactions with entities incorporated in the mentioned countries will be obliged to issue transfer pricing reports.

On the other hand, the Tax Administration has also added certain transactions to the list of transactions excluded from the transfer pricing analysis:

  • Donations between related parties resident abroad or in Paraguay;
  • Transactions carried out by taxpayers subject to the IRE with related parties subject to personal income tax (IRP) in Paraguay, provided that such transactions fall within the scope of the IRP;
  • Transactions carried out by taxpayers subject to the IRE that have an approved maquila programme, only for the part of income that is subject to the 1% single tax; and
  • Transactions carried out by taxpayers subject to the IRE that are free zone users resident in Paraguay, only for the part of income derived from exports made to their related parties abroad that is subject to the 0.5% free zone tax.


  • Poland

On 15 September 2022, the lower house of the parliament (Sejm) approved a draft bill amending the Corporate Income Tax Law, inter alia, the provisions regulating transfer pricing (TP) documentation requirements for transactions with entities located in low-tax jurisdictions, with the aim to reduce the tax compliance burdens of taxpayers.

Under the approved draft law, it will be necessary to prepare the Local File when the following annual thresholds are exceeded for transactions with entities located in low tax jurisdictions:

  • PLN 500,000 for related transactions (currently PLN 100,000);
  • PLN 500,000 for non-related transactions (currently the PLN 100,000 threshold applies only to indirect non-related transactions); and
  • PLN 2,500,000 for related and non-related transactions with entities located in low tax jurisdictions.

The same thresholds will apply to entities forming a tax group.


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