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TPS Newsletter – February 2024

Transfer Pricing developments around the world

United Kingdom: HM Revenue and Customs (HMRC) has published a guide on transfer pricing risk analysis

HMRC has published guidance INTM485025 which discusses the steps in the related party transaction risk analysis process to accurately define the transaction as described in Chapter I of the OECD Transfer Pricing Guidelines. These steps are listed below:

  • Identification of risks with economic relevance.
  • Identification of economically significant risks.
  • Analysis of the contractual assumption of risk.
  • Functional analysis to determine which entities control risk.
  • Analysis of the consistency between contract, conduct and risk allocation.
  • Pricing of the transaction, considering the allocation of risk.

Switzerland: the Tax Administration has issued a publication on transfer pricing

The Swiss Tax Administration has issued a publication on transfer pricing, available in French or German, i) defining the concept of arm’s length, ii) delimiting the legal application of this concept, iii) providing guidelines for the execution of comparability analyses and the selection of the valuation method, iv) detailing aspects related to the documentation to be prepared and v) mentioning the application of transfer pricing adjustments.

Moldova: effective January 1, 2024, transfer pricing regulations came into effect

 Effective January 1, 2024, the transfer pricing regulations in Moldova came into force. The following taxpayers will be subject to the new regulations:

  • Total amount of annual related transactions equal to or greater than MLD 20,000,000 (excluding VAT): are required to prepare transfer pricing documentation and are only required to file it upon request of the Tax Administration.
  • Total amount of annual related transactions equal to or greater than MLD 50,000,000 (excluding VAT): they are required to prepare transfer pricing documentation and there is an obligation to submit the documentation within 6 months from the end of the tax year.

Egypt: increase of the threshold to prepare Local File Master File

Effective February 22, 2024, the threshold to prepare Local File and Master File has been increased from EPG 8,000,000 to EGP 15,000,000.

Cyprus: increase of the threshold to transfer pricing documentation obligations.

 With effect from fiscal year 2022, the threshold to prepare the transfer pricing documentation has been increased as follows:

  • From 750,000 euros to 5 million euros for related financing transactions.
  • From 750,000 euros to 1 million euros for all other categories of related party transactions, such as transactions involving goods, services, intangibles, etc.

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