On 26 May 2015, the Ministry of Finance published new guidelines on transfer pricing documentation requirements. The Guideline will apply as of 1 January 2015 and replaces the previous guidelines of October 2014.
The requirements, with respect to transfer pricing documentation, generally follow the recommendation included in the OECD Transfer Pricing Guidelines and the EU Code of Conduct on Transfer Pricing Documentation.
The new guidelines also apply to domestic related parties (the previous guidelines were only applicable to transactions of residents with foreign related parties). The guidelines make a distinction between keeping ‘complete documentation’ and keeping ‘basic documentation’. If a taxpayer has to keep complete documentation, this means both a Master File and a Local File have to be filed.
Taxpayers that are required to keep a complete documentation are:
- Taxpayers that are obliged to keep their accounts under IFRS
- Taxpayers whom conduct transactions with related parties that are established in a non-treaty state (also where secondary adjustments are required)
- Taxpayers that apply for an advance tax ruling
- Taxpayers that claim a deduction of losses in excess of EUR 300,000 (incurred in previous years)
- Taxpayers that, in the two following tax periods, claim deduction of losses in excess of EUR 400,000 incurred in previous years
- Taxpayers that claim tax relief under the Research and Development Incentives Act or Investment Incentive Act
All other taxpayers are allowed to keep the basic documentation, which consists of a simplified Master File and a Simplified Local File. There are specific exceptions for taxpayers that qualify as micro-accounting entities. For more information, please contact your trusted advisor.