The Norwegian Tax Administration has issued guidance on the new transfer pricing reporting requirements. Poland has postponed the mandatory introduction of the National e-Invoicing System for security reasons. Spain has approved rules based on the DAC 7 Directive governing the obligations of digital platform operators. Read our article for more news from the world of international taxation.
Tax authorities issue guidance on new transfer pricing reporting requirements
The Norwegian Tax Administration has released guidance on changes to transfer pricing reporting requirements for tax returns due on 31 May 2024, for entities with financial years ending in 2023. The guidance outlines mandatory and voluntary disclosures, as well as exemptions for certain disclosures. Mandatory disclosures include information on entity ownership, functional profiles, guarantor status, transaction categories, and financial data. Voluntary disclosures cover reasons for TP documentation exemptions, cash pooling arrangements, and intellectual property ownership. Some disclosures, such as operating losses, operating margins, withholding tax, and detailed transaction values, are not required for FY 2023 tax returns. The guidance aims to ease compliance but introduces significant changes, prompting taxpayers to consider tax risk management and prepare for future reporting requirements.
New transfer pricing reporting requirements for corporate income tax returns
Norway’s new transfer pricing reporting requirements for corporate income tax returns bring significant changes effective from January 2023. The update replaces the RF-1123 form, aiming for digitalization and simplification. Key changes include detailed disclosures on operational transactions, functions, risks, and TP methods used. Uncertainties remain regarding interpretation and potential rejections. Taxpayers must now provide comprehensive TP information, aligning with CbC reporting and increasing compliance complexity. The shift signals a move towards OECD-compliant documentation and necessitates robust internal processes for timely and accurate reporting.
Further update provided on delay to mandatory KSeF implementation
The Polish Ministry of Finance announced a delay in implementing the National e-Invoicing System (KSeF) due to security concerns, with a new effective date pending a system audit by May 2024. No changes are planned regarding invoice issuance, structure, KSeF ID collection, or offline invoice deadlines. Further consultations will address KSeF use in business-to-consumer transactions and effective dates for VAT-exempt taxpayers. Taxpayers are advised to proceed with implementation plans as there are no significant regulatory changes despite the postponement.
DAC 7 implementation updates
In Poland, the draft bill covering DAC 7 implementation is expected to be adopted in February 2024, with provisions set to take effect on 1 July 2024. Online platforms will have until the end of January 2025, to submit reports for 2023 and 2024. Data collection by platform operators will commence when a seller earns over EUR 2,000 or exceeds 30 transactions annually. Sanctions for non-compliant sellers may include payment withholding or blocking platform activities.
Cyprus: Thresholds for local file requirements increased
Cyprus’ Commissioner of Taxation announced increased thresholds for local file requirements for the 2022 tax year. Thresholds for financing transactions rose from EUR 750,000 to EUR 5 million, and for other categories, from EUR 750,000 to EUR 1 million. The changes aim to provide clarity and reduce compliance burdens. Taxpayers are still required to document transactions below the threshold in a simplified format, depending on transaction type and safe harbor options. This update affects transfer pricing documentation for Cyprus tax resident taxpayers.
Spain: Rules relating to obligations of digital platform operators approved
A new Royal Decree effective from February 2024 outlines due diligence rules for digital platform operators in Spain to comply with DAC 7. Operators must collect and report seller information to tax authorities. Rules apply retroactively from January 2023. Sellers engaging in relevant activities are subject to reporting, excluding state entities, listed companies, and occasional sellers with limited transactions. The decree aims to enhance tax transparency and combat tax evasion.
Switzerland: Crypto taxation: How are investors taxed?
Cryptocurrency taxation in Switzerland is based on existing tax laws, with recent guidance from the Federal Tax Administration. Payment tokens, like Bitcoin, are treated as movable capital assets for wealth tax purposes. Mining rewards are taxable income, while staking rewards and airdrops are subject to income tax. Asset tokens from ICOs/ITOs are categorized based on their features, affecting taxation. Utility tokens are subject to wealth tax but not income tax due to their nature. Token trading is treated as private asset management, but extensive trading may be considered self-employment, altering tax implications.
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