Transfer Pricing News Issue 39 - June 2022

Transfer pricing bytes

  • France: A U.S.-based multinational has agreed to pay EUR 1.3 billion, including EUR 520 million in fines and EUR 737 million in unpaid taxes, to settle a long-running tax dispute revolving around allegations that the company had reduced its French tax liability by transferring fees received from its French franchises as royalties paid to a corporate unit in Luxembourg. 
  • OECD: The OECD continued to issue documents for public comment, issuing two consultation documents relating to tax certainty: a Tax Certainty Framework for Amount A and Tax Certainty for Issues Related to Amount A under Pillar One. The documents, issued on 27 May, requested that comments be submitted no later than 10 June. The comments received have now been published.
    A central element of Amount A is an innovative tax certainty framework that guarantees certainty for in-scope groups over all aspects of the new rules, including the elimination of double taxation. This eliminates the risk of uncoordinated compliance activity in potentially every jurisdiction where a group has revenues, as well as a complex and time-consuming process to eliminate the resulting double taxation. The Tax Certainty Framework incorporates a number of elements designed to address different potential risks posed by the new rules: a scope certainty review, an advance certainty review and a comprehensive certainty review. 
  • Poland: Poland’s President Andrzej Duda signed on 8 June 2022 signed an order extending the deadline for submitting transfer pricing documentation. The deadlines to submit the transfer pricing information return and the declaration that local transfer pricing documentation has been prepared have been extended to 30 September 2022 if the standard deadline expires between 1 January 2022 and 30 June 2022, and by three months if the standard deadline expires between 1 July 2022 and 31 December 2022.
    The deadline for the preparation of the master file also has been extended to three months after the extended deadline described above.  
  • Portugal: The Portuguese tax authorities on 26 November 2021 published Order No. 268/2021, which among other things introduced changes to the country’s transfer pricing documentation requirements. Under the new rules, taxpayers are required to prepare standard or simplified transfer pricing documentation by the 15th day of the seventh month after the end of the fiscal year -- or 15 July, if the fiscal year coincides with the calendar year.  
  • U.S.: The New Jersey Division of Taxation announced June 16 that it will implement a voluntary Transfer Pricing Initiative running from June 15, 2022, through March 2, 2023, that is intended to expedite the resolution of corporate intercompany pricing issues. However, given the specific provisions of the initiative, taxpayers should proceed cautiously. Read the full alert.