In this edition of the newsletter, you will find the most important national and global developments in tax law that are (closely) related to the transfer pricing world.
Please feel free to contact us if you have any questions.
Quantera Global News and Developments
- We have launched the fourth episode of our podcast “The Transfer Pricing Method”, entitled “Operational Transfer Pricing – Mitigate risks and maintain control”. The episode is now available on Spotify, YouTube, and on our website.
Quantera Global Specialties
In the past month, several challenging and noteworthy projects were successfully completed, including:
- Finalising a Bilateral APA with the Dutch and Belgian Tax Authorities.
- Preparing worldwide transfer pricing documentation for a large multinational based in the US.
- Designing a TP model for a medium-sized multinational active in healthcare.
If you would like to know more about these topics, please feel free to contact us.
Quantera Global Blogs
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On 3 April, we published a blog on the importance of a well-defined TP strategy. You can read the blog here.
News from around the world:
Bahrain
On 9 March, the National Bureau for Revenue released version 1.0 of the updated domestic minimum top-up tax (“DMTT”) registration manual. The manual outlines the DMTT registration process and provides guidance for taxpayers using the online portal and forms.
Bulgaria
On 27 March, Bulgaria amended its Pillar Two legislation under the State Budget Law. Changes include updates to the UTPR safe harbors, DMTT alignment with local accounting standards, and a switch-off rule for the qualified domestic minimum top-up tax (“QDMTT”).
Canada
On 26 March, the Tax Court of Canada upheld the denial of a downward transfer pricing adjustment, reinforcing the discretionary nature of such adjustments under the Income Tax Act. The adjustments had been requested by the taxpayer to correct overstated revenues or understated expenses in dealings with related parties, based on the application of the Transactional Net Margin Method. The Canada Revenue Agency (“CRA”) challenged these adjustments, arguing that the transfer pricing policy did not reflect the arm’s length principle and suggested the use of the Comparable Uncontrolled Price. In addition, the CRA questioned the comparables used by the taxpayer. The ruling highlights the need for strict compliance with transfer pricing rules and robust documentation for related party transactions.
Dominica
On 12 March, the International Tax Affairs Unit of the Inland Revenue Division released guidelines on the mutual agreement procedure (MAP) for resolving treaty-related tax disputes. The guidelines clarify that Dominica does not offer bilateral advance pricing agreements, although it maintains tax treaties with Switzerland and CARICOM member states.
European Union
- On 10 March, the Council of the European Union agreed on amendments to Directive 2011/16/EU (DAC9). DAC9 simplifies Pillar Two filing for multinational enterprise groups by introducing a centralised information exchange. Member states must have implemented it by 31 December 2025, with first filings due by 30 June 2026.
- On 18 March, Commissioner Hoekstra at the EU Tax Symposium reaffirmed the European Commission’s strong commitment to Pillar Two. He emphasized the ongoing efforts to work with member states and international partners to implement Pillar Two rules. Hoekstra also highlighted the recent political agreement to extend DAC9.
Finland
In March 2025, Finland’s Tax Administration issued guidance on the Minimum Tax Act, effective from 31 December 2023. Key points include a five-year recapture rule for deferred tax liabilities (“DTLs”), the relevance of pre-regime DTLs and deferred tax assets for Pillar Two, and rules for prior-year tax adjustments before and after GIR filing.
Italy
On 6 March, Italy introduced a GloBE information return (“GIR”) notification requirement for groups falling under Pillar Two requirements. It must be filed within 15 months of the fiscal year’s end (18 months for the transitional year). Submission details will be clarified by the revenue agency.
Japan
On 31 March, Japan passed the 2025 tax reform bills, covering corporate tax, global minimum tax, CFC regime, and measures for small businesses.
Kenya
The Kenyan Tax Appeals Board has upheld the Kenyan tax authorities’ rejection of personnel expenses. The salary costs for expatriates provided by the parent company were disallowed due to insufficient documentation and failure to substantiate the expenses as wholly and exclusively related to the business. The documents presented, including intercompany invoices and outdated transfer pricing documentation, were not enough to justify the deductions. The absence of critical supporting documentation, such as employment contracts and work permits, were a significant factor in the disallowance.
Netherlands
On 17 March, the Dutch tax authorities published a so-called “knowledge group position”, explaining how the participation exemption applies to subsidiaries whose tax bases may be affected by Article 8bd CITA.
OECD
On 5 March, the Organisation for OECD released the latest BEPS Action 14 MAP peer review results, documenting progress in improving dispute resolution under the BEPS package. The release includes 10 new peer review reports for jurisdictions with low MAP experience, aiming to help them establish robust MAP programs for future cases.
Poland
On 19 March, the Polish Supreme Administrative Court upheld the validity of a licensing agreement between a company and its subsidiary, rejecting the tax authority’s reclassification of royalties as brand management services. The ruling emphasises that tax authorities can adjust income based on transfer pricing principles, but cannot alter the legal nature of contracts retroactively, setting an important precedent for related-party transactions in Poland.
Qatar
On 27 March, Qatar introduced Law No. 22 of 2024, applying the IIR and DMTT per 1 January 2025. The rules align with the OECD guidelines but exclude the UTPR. Penalties include fines for late returns and payments. More details will follow in Executive Regulations.
Serbia
On 28 February, Serbia published the 2025 rulebook on arm’s length interest rates, effective 8 March. The rulebook sets different safe harbour interest rates. Taxpayers must choose between prescribed rates or OECD-based methods and apply them consistently.
Turkey
On 7 March, the Ministry of Treasury and Finance announced that Amount B under Pillar One will not be implemented in Turkey.
United Arab Emirates
On 4 March, the UAE published FAQs on its Pillar Two DMTT. The UAE has opted not to implement the income inclusion rule for now. The DMTT aligns with GloBE rules, allows future OECD guidance adoption, and applies to qualifying free zone persons meeting thresholds.
United States
On 27 March, the IRS released Announcement 2025-13, the 26th annual report on the Advance Pricing and Mutual Agreement (APMA) program for 2024. The reports show that 142 APAs were concluded in 2024 (2023:156).
United Kingdom
On 21 March, the UK’s Finance Act 2025 was enacted, introducing the UTPR for periods starting 31 December 2024. It also includes a UTPR safe harbor and updates based on OECD guidance, with most provisions retroactive applied from 31 December 2023 and others starting 31 December 2024.
Final words
Thank you for taking the time to read this edition of our newsletter. I hope you found the insights and updates valuable. If you have any questions or would like further information on any of the topics covered, please do not hesitate to reach out to us.
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Best regards,
Adriaan van der Heijden
Director at Quantera Global
