The Transfer Pricing Beat: News for the Week of February 8, 2021
Paraguay Issues Transfer Pricing Guidance
Issuing a transfer pricing guidance isn’t a matter of ‘if’— it’s a matter of ‘when’. Now, it’s Paraguay’s turn. The country’s tax authority recently released Decree 4644/2020, guidance on transfer pricing rules included in Law 6380. The decree is effective for fiscal year 2021, and covers companies conducting transactions with related parties located inside and outside Paraguay. The guidance addresses technical matters of the provisions, including intragroup services, use of the interquartile range, comparability, and application of the sixth method, which is used for export commodities. It also irons out the transfer pricing law related to resident transactions—in particular, if transactions are done with residents in low or zero taxation jurisdictions, it’s considered a related party transaction.
Qatar Announces New Online Tax Portal
Between school, shopping, and work, practically anything can be done online. You can add filing your company’s tax return to the list—at least in Qatar. The tax authority is accepting returns through their new online tax portal called Dhareeba, complete with a new set of rules. The tax authority is requiring companies to file the declaration if they exceed a particular threshold amount. While the tax authority hasn’t released exact numbers, it’s anticipated to be total assets or revenue of 10 million Qatari Rial, or 2.7 million U.S. dollars. Also, the declaration must provide specific related-party transactions data, and disclose which OECD method was used to show arm’s length compliance.
Dow Chemical Wins Legal Case Against Canadian Tax Authority
There’s order in the transfer pricing court. Dow Chemical’s Canadian affiliate and the Canadian Tax Authority recently resolved their legal dispute. The winner? Dow Chemical. Here’s what you need to know. Dow Chemical made various inter-company transactions with foreign related parties. The Canadian Tax Authority reassessed the 2006 tax year and increased the income for certain foreign related party transactions, but denied downward adjustment for others. However, the reassessment of 2007 did include the downward adjustment. The CRA had agreed to the amount of the downward adjustment with Dow Chemical, but argued they had the authority to deny it. The battle waged over whether the tax authority had the right to deny the downward adjustment.