Issue July / August 2012
We are proud to present to you the latest edition of Transfer Pricing Insights – Deloitte Switzerland's bi-monthly newsletter focusing on Transfer Pricing issues affecting MNCs in Switzerland. It covers Swiss "hot" topics and economic related news as well as the latest Deloitte global edition of the Arm's Length Standard.
Swiss Transfer Pricing Hot Topics
Brazilian Government makes major changes to transfer pricing legislation
As part of a long-awaited initiative to stimulate domestic growth, the Brazilian government on 3 April published Provisional Measure (MP) 563/2012, which includes significant changes to the country's transfer pricing rules. MP 563/2012 amends the rules applicable to imports of goods, sets profit margins for certain sectors, and creates two new transfer pricing methodologies.
The MP still must be enacted into law, which is expected to take place within 60 days following publication. Although the changes made by MP 563/2012 will apply to fiscal years starting on or after 1 January 2013, taxpayers can opt to apply the rules from fiscal year 2012. Companies which have business operations in Brazil are strongly advised to consider how the changes in legislation will impact their transfer pricing policies and local compliance requirements.
For more information, please click here (page 8).
French court decision could impact the tax treatment of cross-border relocations of routine functions
In 2011, the Administrative Court in Paris issued a decision stating that the transfer of a cash pooling activity from a French entity to an affiliated Swiss entity could be regarded as an indirect transfer of profits.
Whilst the final decision is still pending following an appeal lodged by the company, this case could still have an impact on the way cross-border transfers of routine functions are assessed from a tax standpoint.
For more information, please click here (page 17).
Italian Revenue Agency issues guidance on Mutual Agreement Procedures
The Italian Revenue Agency issued on 5 June 2012 a circular letter to provide guidance to local tax offices on the application of Mutual Agreement Procedures (MAPs), available under Double Tax Treaties and the procedure provided in the EU Arbitration Convention for the resolution of double taxation disputes arising from transfer pricing adjustments within EU member states.
Considering the significant increase in APA cases initiated between Italy and Switzerland as well as with other jurisdictions, seeking pre-confirmation on cross-border transactions has gained momentum among tax payers.
For more information, please click here (page 19).
The Arm’s Length Standard
The June/July issue of Deloitte's global Transfer Pricing newsletter concentrates particularly on the following topics:
- OECD Releases Discussion Draft on Intangibles
- Brazilian Government Makes Major Changes to Transfer Pricing Legislation
- Malaysia's Transfer Pricing and APA Rules come into force with retroactive effect
- Norway's Tax Authorities double Transfer Pricing adjustments in 2011
These and further topics can be accessed by downloading your copy of the Arm's Lengths Standard here.
We hope that you have enjoyed reading this edition of Transfer Pricing Switzerland Insights. If you have any questions in relation to one of the above topics or you would like to discuss your situation and receive a professional opinion on any Transfer Pricing related topics, please feel free to contact us directly via phone or email.