Category: Local Country Guidelines

Interpretation statement from the Inland Revenue of New Zealand on application of the general anti-avoidance provision

Interpretation statement from the Inland Revenue of New Zealand on application of the general anti-avoidance provision

3 February 2023 the Inland Revenue of New Zealand issued an interpretation statement explaining the Commissioner’s view of the law on tax avoidance in New Zealand. It sets out the approach the Commissioner will take to the general anti-avoidance provisions in the Income Tax Act 2007 – ss BG 1 and s GA 1. Where s BG 1 applies, s GA 1 enables the Commissioner to make an adjustment to counteract a tax advantage obtained from or under a tax avoidance arrangement. The Supreme Court in Ben Nevis considered it desirable to settle the approach to the relationship between s BG 1 and the specific provisions in the rest of the Act. This approach is referred to as the Parliamentary contemplation test. The Parliamentary contemplation test was confirmed as the proper and authoritative approach to applying s BG 1 by the Supreme Court in Penny ... Continue to full case
The South African Revenue Service (SARS) issues Arm's Length Guidance on Intra-Group Loans

The South African Revenue Service (SARS) issues Arm’s Length Guidance on Intra-Group Loans

17 January 2023 the South African Revenue Service (SARS) released an interpretation note (IN 127) titled “DETERMINATION OF THE TAXABLE INCOME OF CERTAIN PERSONS FROM INTERNATIONAL TRANSACTIONS: INTRA-GROUP LOANS” which provides guidance on how SARS will determine arm’s length pricing for intra-group loans. The Note also provides guidance on the consequences for a taxpayer if the amount of debt, the cost of debt or both are not arm’s length. According to the note an intra-group loan would be incorrectly priced if the amount of debt funding, the cost of the debt or both are excessive compared to what is arm’s length. Legal-IN-127-Determination-of-the-taxable-income-of-certain-persons-from-international-transactions-Intra-group-loans ... Continue to full case
Brazil issues Draft Legislation on implementation of the Arm's Length Principle

Brazil issues Draft Legislation on implementation of the Arm’s Length Principle

28 December 2022 Brazil published draft legislation on implementation of the arm’s length principle as described in the OECD Transfer Pricing Guidelines. The new provisions came into effect on the date of publication and must be converted into law by the National Congress. The new transfer pricing regime will be optional for taxpayers for 2023 and mandatory as of 2024. Unofficial English Translation MEDIDA PROVISÓRIA Nº 1.152, DE 28 DE DEZEMBRO DE 2022 - BRAZIL - MEDIDA PROVISÓRIA Nº 1.152, DE 28 DE DEZEMBRO DE 2022 - DOU - Imprensa Nacional ... Continue to full case
Italien Transfer Pricing Guidelines, Ministerial Decree of 14 May 2018 no. 118/2018

Italien Transfer Pricing Guidelines, Ministerial Decree of 14 May 2018 no. 118/2018

Italien legislation on transfer pricing is contained in Article 110, paragraph 7 of the Consolidated Income Tax Act, where the first sentence states that “the components of income deriving from transactions with companies not resident in the territory of the State, which directly or indirectly control the company, are controlled by it or are controlled by the same company that controls the company, are determined by reference to the terms and prices that would have been agreed between independent parties operating in conditions of free competition and in comparable circumstances, if an increase in income is the result”. The rule was last amended by Article 59 of Decree-Law No. 50/2017 which, as far as it is of interest, replaced the reference to “normal value” with the “arm’s length principle”, referred to in the aforementioned Article 9 of the OECD Model Convention, in determining the value ... Continue to full case