Transfer pricing reporting requirements – updates on what we’ve learned so far in 2022

Specific transfer pricing provisions were introduced into the Revenue Code with effect for accounting periods starting on or after 1 January 2019. Prior to that, the Revenue Department relied on general income tax provisions and transfer pricing guidelines to administer the compliance of related party transactions.

Fast-forward to the present day, and it has been just over a year since the long-awaited subordinate laws were issued on transfer pricing local file content requirements under Director General Notification (DGN) 407), and country-by-country reporting (CbCR) requirements under DGN 408.

Both the transfer pricing reporting and CbCR requirements are aimed at increasing the transparency of taxpayers’ transfer pricing practices. With more transparency, any transfer pricing irregularities or mischief (should there be any) will be more easily spotted by Revenue officers.

Having said that, a common misconception among taxpayers is that fulfilling the documentation checkbox alone safeguards them against transfer pricing related penalties. However, the bottom line is that compliance with the arm’s length principle is equally as – if not more – important than compliance with reporting requirements.

Considering the leveled-up transfer pricing rules combined with the economic recession and prolonged financial performance slump of most taxpayers, and it is expected that Revenue officers will become more aggressive in future transfer pricing investigations.

Register for our free webinar to familiarise yourself with recent 2022 transfer pricing updates, go through some of the lessons learned so far, and get key pointers on how to handle current requirements with a view to managing your transfer pricing risks going forward.

This webinar will cover

• A recap of TP local file requirements and consequences for taxpayers
• A walkthrough of updated country-by-country reporting requirements
• Guidance on defining a related party, dispute resolution (and more!)
• TP audit case sharing