At the international level, the global trend towards the correct taxation of multinational companies in countries where they generate the value-added is becoming clearer. In this regard, countries have agreed to automatically exchange information on taxpayers' data, multinational companies, which will ensure transparency in determining the tax base and tax due and paid in each jurisdiction where multinational group companies operate.
Thus, at the G20 Summit held in Hamburg, Germany, on 7 to 8 July 2017, the countries also discussed the implementation of the BEPS (Base Erosion Profit Shifting) plan and the exchange of information based on common reporting standards from September 2017.
According to the press release issued at the end of the G20 Summit, the first exchange of information between tax authorities should take place at the latest in September 2018. The participants agreed that they want to make progres in the implementation of the process of effective implementation of the International Standards for Transparency as an important tool in the fight against corruption, tax evasion, terrorist financing and money laundering.
Separately, the OECD published on 10 July 2017 the Amended Transfer Pricing Guide (online version), which includes the changes made by the BEPS Plan, in this case:
• Actions 8-10 – Aligning Transfer Pricing Results with Value Creation
Governments and tax authorities want to ensure that taxable profits of multinational companies are not artificially removed outside their jurisdictions and that the taxable amount declared to tax authorities corresponds to the economic activity carried out and the added economic value created in that tax jurisdiction. For this, the tax payers need to have clear principles regarding the Arm's lengths principle.
• Action 13 – Transfer Pricing Documentation and Country Country Report
The transfer pricing documentation, detailed in Chapter V of the OECD Guidelines, has been completed with the Country-by-Country Report expected to be filled out and submitted for the first time for the first fiscal year following 1 January 2016.
In addition, the Amended Transfer Pricing Guide also contains the revised version of the OECD Council Recommendation on transfer pricing between associated companies, and calls on all OECD and non-OECD member countries to adhere to the Recommendation.
"For companies, BEPS implementation comprises a set of complex actions involving the Finance, IT, Tax deparments as well as all management levels. It is essential to establish how to track the value chain in line with the new BEPS transfer pricing approach. The BEPS plan highlights that fiscal governance, risk assessment and communication are more important than ever", says Florentina Şuşnea, Managing Partner, PKF Finconta.
* * *
For more than 22 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping and accounting advisory services, transfer pricing, payroll and personnel administration and insolvency.
Alina Făniță, CEO
Phone: +40 21.317.3196
Mobile: +40 768.184.870