Slovakia: Guidance on windfall tax payment issued

The Slovak Tax Authority clarified the procedure for the payment of windfall tax on energy producers (in the form of guidance 13/PO/2023/IM).

Cyprus: FAQs issued with respect to the TP Documentation rules

The Cyprus Tax Department (CTD) uploaded a new “Frequently Asked Questions” (FAQs) section on its website with respect to transfer pricing. The FAQs provide some basic guidance on certain aspects of the new Transfer Pricing documentation rules that were introduced last year. In particular, it is clarified that Interpretive Circular 3 dated 30 June 2017 with respect to back-to-back financing transactions (which under certain conditions provided for a safe harbour return of 2% after tax on assets) no longer applies as of 1 January 2022.

Germany: Dividends paid to US “S corporation” subject to 0% WHT under treaty

On 10 March 2023, the lower tax court of Cologne published a long-awaited decision dated 16 November 2022 and ruled that a US “S corporation,” which is a transparent entity for US federal income tax purposes, was entitled to a 0% withholding tax (WHT) rate pursuant to Article 10 (3) (a) (bb) of the Germany-US double tax treaty (DTT).

Switzerland: Debt waiver constitutes hidden profit distribution

The Supreme Court ruled (A-1954/2022) in favour of the tax authorities and found that the debt waiver between related companies constituted a hidden profit distribution.

Montenegro: Changes in tax law with respect to international tax transactions

The most important measures include introducing a 30% WHT for specified payments made to non-resident entities that are incorporated, or have a seat in, low-tax jurisdictions or TP documentation requirement for transactions between a non-resident head office and its branch office based in Montenegro.