Local tax newsSlovak Republic - New TP documentation guidance published
The Ministry of Finance published updated guidance on the content of TP documentation on 6 February 2019. The scope of obligation to submit TP documentation depends on the category of taxpayer. It can be: (1) the full TP documentation, (2) the basic TP documentation and (3) the simplified TP documentation. The full TP documentation consists of a Master File and a Local File and is required for cross-border transactions of taxpayers that maintain accounting in accordance with IFRS Standards, or for significant cross-border transactions, where the value of the transaction or group of interrelated transactions exceeds EUR 10 million or where the counterparty is a resident of a non-treaty jurisdiction, and in the case of requests for obtaining an APA and initiating a MAP. The basic TP documentation consists of a simplified Master File and Local File. The basic TP documentation is required for taxpayers whose revenues exceed EUR 8 million or the value of the transaction or group of transactions in a year exceeds EUR 1 million. The simplified TP documentation is replaced by a specific overview return. The overview return contains a summary of the transactions with related parties. This simplified set of TP documentation should be submitted when the full or basic TP documentation is not required. If these subjects are something which you find interesting and would like to discuss further we are happy to be at your service. Contact us at sales@comtaxit.com. BEPS newsOn 20 December 2018, the Income Tax Act 2010 (Amendment No. 3) Regulations 2018 were published. The Regulations implemented the EU Anti-Tax Avoidance Directive as following:
Interest limitation rules The deduction of net interest expenses is limited to the higher of 30% of the taxpayer's EBITDA or EUR 3,000,000. The excess interest expense may be carried forward indefinitely and the unused interest capacity may be carried forward for a maximum of 5 years. CFC regime To qualify as a CFC the following conditions should be met: (i) the resident itself or together with its associated enterprises should hold a direct or indirect participation of more than 50% of the voting rights, capital, or rights to the profits of the entity, and (ii) the actual tax paid on the profits by the entity or PE is lower than the difference between the tax that would have been charged on the entity or PE according to the Income Tax Act and the actual tax paid by the entity or PE on its profits. The CFC's accounting profits not exceeding EUR 750,000 and non-trading income not exceeding EUR 75,000 or the CFC's accounting profits not exceeding the 10% of its operating costs for that tax year are excluded from the scope of these rules. The Regulations are effective to accounting periods beginning on or after 1 January 2019. If these subjects are something which you find interesting and would like to discuss further we are happy to be at your service. Contact us at sales@comtaxit.com. BEPS newsMalta - Legislation implementing ATAD came into effect
On 11 December 2018, Legal Notice 411 of 2018 was published in Government Gazette No. 20,102, implementing the Anti-tax avoidance directive. The Regulations came into force on 1 January 2019. The Regulations introduced the following anti-tax avoidance measures: (i) Interest deductibility limitation rule limits the deductibility of a taxpayer's exceeding borrowing costs to 30% of the taxpayer’s EBITDA. Safe harbour: full deductibility is allowed of exceeding borrowing costs up to EUR 3 million or if a taxpayer can demonstrate that the ratio of its equity over its total assets is equal to or higher than the equivalent ratio of the group. (ii) The Regulations implemented general anti-avoidance rules. (iii) The CFC rule applies if the taxpayer itself, or together with its associated enterprises, holds a direct or indirect participation of more than 50% of the voting rights, or owns directly or indirectly more than 50% of the capital or is entitled to receive more than 50% of the profits of that entity; and the actual corporate tax paid by the entity/PE is less than 50% of the tax that would have been charged to the entity or PE under the provisions of the ITA. Should an entity or PE be treated as a CFC, the non-distributed income of the said entity or permanent establishment arising from non-genuine arrangements which have been put into place for the essential purpose of obtaining a tax advantage are included in the tax base of the taxpayer. The income to be included in the tax base of the taxpayer is limited to the amounts generated through assets and risks which are linked to significant people functions carried out by the controlling company. The CFC rule does not apply in relation to an entity or PE if accounting profits of no more than EUR 750,000 and non-trading income of no more than EUR 75,000; or of which the accounting profits amount to no more than 10% of its operating costs in the tax period concerned. If these subjects are something which you find interesting and would like to discuss further we are happy to be at your service. Contact us at sales@comtaxit.com. |
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