Transfer Pricing Report

Netherlands: Pillar Two Amendments and Side-by-Side Package

Transfer Pricing — Thu, 09 Apr 2026 19:01:47 +0000

On December 23, 2025, the Dutch State Secretary for Finance published the End-of-Year Decree 2025, introducing amendments to the implementing decree of the Minimum Tax Act 2024. The purpose of the amendments is to align Dutch domestic legislation with the latest OECD and EU Pillar Two guidance.

At the same time, legislative amendments were enacted to bring the tax framework of the BES Caribbean islands (Bonaire, Sint Eustatius, and Saba) into alignment with the Second Amendment to the Minimum Tax Act 2024, the EU DAC9 information exchange legislation, and the End-of-Year Decree 2025. These changes apply to fiscal years starting on or after December 31, 2023.

In addition, on January 5, 2026, the State Secretary notified Parliament of the government’s intention to submit draft legislation implementing the Pillar Two “side-by-side package” by summer 2026, following a stakeholder consultation process.

These signals continued refinement of the Netherlands’ implementation of the global minimum tax framework.

Amendments to the Dutch Minimum Tax Act and Implementing Decree

What Has Changed?

The implementing decree of the Minimum Tax Act 2024 has been updated to reflect recent OECD and EU interpretative guidance on Pillar Two.
Legislative updates formally align the BES Caribbean islands’ tax framework with:
The Second Amendment to the Minimum Tax Act 2024
The EU DAC9 data exchange implementation law
The End-of-Year Decree 2025
The updates apply retroactively to fiscal years beginning December 31, 2023.
The government announced its intention to introduce the Pillar Two side-by-side package in summer 2026 to further refine the interaction between domestic minimum tax rules and international mechanisms.

What Has Not Changed?

The structure of the Dutch Minimum Tax Act 2024 remains intact.
The Netherlands continues to apply Pillar Two in line with EU directives and OECD model rules.
Core obligations under the domestic minimum tax (DMT), income inclusion rule (IIR), and undertaxed profits rule (UTPR) remain applicable where thresholds are met.

What This Means for Multinational Groups

Multinational enterprises (MNEs) with Dutch and/or BES entities must reassess their Pillar Two calculations to ensure alignment with updated OECD guidance.
Alignment of the BES Caribbean islands removes potential mismatches within the Kingdom of the Netherlands.
Implementation of DAC9 increases automatic exchange of Pillar Two-related data between EU member states, strengthening transparency.
Retroactive effectiveness may require review of fiscal years beginning December 31, 2023 to confirm accurate application of revised provisions.

Risk Management Considerations

Review effective tax rate (ETR) calculations under the domestic minimum tax rules.
Ensure consistency between Dutch domestic filings and EU data exchange disclosures.
Strengthen internal governance and documentation over Pillar Two computations.
Monitor the upcoming side-by-side legislative proposal expected by summer 2026.
As EU jurisdictions refine their Pillar Two implementation, technical alignment is increasing—but so is audit visibility.

Alignment with OECD Pillar Two Tax Framework

The Netherlands continues to demonstrate strong technical alignment with OECD Pillar Two model rules and EU implementation measures.

By updating domestic decrees promptly and integrating DAC9 requirements, the Netherlands reinforces:

Consistency with OECD administrative guidance
Harmonization across EU member states
Elimination of structural gaps within the Kingdom (including BES islands)
Commitment to transparency through cross-border data exchange

The planned side-by-side package indicates that further clarification on the interaction between domestic minimum tax, IIR, and UTPR rules is forthcoming.

What Multinational Groups Should Do Now

Conduct a structured Pillar Two impact review for Dutch and BES entities.
Confirm updated alignment of minimum tax calculations with OECD guidance.
Assess DAC9 reporting readiness and data governance procedures.
Prepare for potential legislative refinements under the upcoming side-by-side package.

Early review reduces recalculation risk later.

How TransferPricing.report Supports Netherlands Compliance

Review of Pillar Two calculations and effective tax rate modelling.
Alignment of domestic minimum tax documentation with OECD guidance.
Advisory on DAC9 reporting implications and data governance.
Strategic support for managing Pillar Two risk across EU jurisdictions.

Final Thought: Structured Alignment Under Pillar Two

The Netherlands’ amendments provide a clear and structured direction:

Domestic law is being refined to mirror evolving OECD and EU Pillar Two guidance
The BES Caribbean islands are now fully aligned within the minimum tax framework
DAC9 implementation strengthens transparency and cross-border data exchange

Have Dutch or BES entities within your multinational structure?
Unsure whether recent Pillar Two refinements impact your effective tax rate calculations or reporting obligations?

TransferPricing.report can help you assess exposure, align documentation with updated guidance, and remain audit-ready as EU Pillar Two implementation continues to evolve.

In global minimum tax compliance, structured alignment reduces uncertainty—and uncertainty is the real risk.

This is general information only and not professional advice. Consult a professional before acting.

Australia: Pillar Two Tax Return Exemption Rules

Transfer Pricing — Tue, 31 Mar 2026 12:10:39 +0000

On December 22, 2025, the Australian Taxation Office (ATO) published the final rules regarding exemptions from the obligation to file domestic minimum tax (DMT) returns and income inclusion rule (IIR)/undertaxed profits rule (UTPR) returns. These rules were initially published in draft form in August 2025, and apart from minor clarifications, the exemptions in the final rules are largely the same.

The finalization of these rules provides multinational enterprises (MNEs) operating in Australia with clarity on their filing obligations under the OECD’s Pillar Two framework. These exemptions are crucial for businesses to understand their reporting requirements and avoid unnecessary compliance burdens.

Key Transfer Pricing Amendments in the Budget

What Has Changed?

Finalization of Filing Exemptions: The ATO has confirmed the final rules regarding exemptions from the requirement to file both DMT returns and IIR/UTPR returns. These rules provide exemptions under specific circumstances, such as when certain thresholds are not met by the MNE or when an MNE’s global income falls below a defined level.
Clarifying Changes: The final rules introduced only minor clarifications compared to the draft rules, meaning the overall filing exemptions remain largely unchanged from the initial proposal.

What Has Not Changed?

Exemption Criteria: The criteria for exemptions, including income thresholds and the nature of operations, remain the same as those outlined in the draft rules. Businesses must continue to assess whether they qualify for exemptions based on these criteria.
Filing Obligations: While the exemptions provide relief to qualifying entities, MNEs that do not meet the exemption criteria are still obligated to comply with the filing requirements under Pillar Two, including reporting under the IIR and UTPR.

Impact on Filing Exemptions and Compliance

Reduced Compliance Burden for Some MNEs: For MNEs that qualify for the exemptions, the final rules will ease the compliance burden, as they will not need to file the DMT or IIR/UTPR returns. This simplification reduces the risk of errors and penalties for qualifying companies.
Potential for Increased Scrutiny: While exemptions are provided, MNEs that are required to file will still face scrutiny from tax authorities. Compliance with the filing requirements remains essential to avoid audits and penalties.
Focus on Thresholds and Documentation: MNEs must ensure that they meet the prescribed thresholds for exemptions and maintain thorough documentation to substantiate their claims for exemption when required.

Practical Implications for Multinational Groups

Review of Filing Requirements: MNEs should conduct an internal review of their operations and financials to assess whether they qualify for the exemptions based on the updated rules. This review should focus on income thresholds and operational activities.
Documentation Preparedness: Even if exempt, businesses should prepare adequate documentation to demonstrate compliance with the exemption criteria in case of future inquiries or audits by tax authorities.
Ensuring Compliance for Non-Exempt MNEs: MNEs that do not qualify for exemptions must ensure timely and accurate filing of their DMT and IIR/UTPR returns to meet their Pillar Two obligations.

Alignment with OECD Pillar Two Tax Framework

Alignment with OECD Guidelines: The final rules are part of Australia’s commitment to implementing the OECD’s Pillar Two framework, which aims to establish a global minimum tax rate and prevent tax base erosion. By finalizing the exemption rules, Australia is ensuring that it remains in sync with global efforts to reduce tax avoidance.
Efficiency Gains: The exemptions are designed to simplify the compliance process for smaller businesses and those not significantly impacted by Pillar Two requirements, while maintaining the integrity of the tax system for larger, more complex entities.
Global Tax Certainty: These rules reflect Australia’s commitment to providing clarity and certainty to MNEs operating within its jurisdiction, which is in line with global trends of increasing transparency and reducing tax disputes.

Future Outlook: As Pillar Two rules continue to evolve globally, Australia may refine these exemptions further. MNEs should stay informed of any future changes to ensure their compliance strategies are up-to-date.

What Multinational Groups Should Do Now

Assess Exemption Eligibility: Multinational groups should assess their operations and income levels to determine if they qualify for the exemptions under the new rules. This should be done as part of their year-end tax review.
Prepare Documentation: Even if exempt, businesses should ensure they maintain adequate records and documentation to demonstrate that they meet the exemption criteria in case of audits.
Ensure Timely Filing for Non-Exempt Entities: For those MNEs that do not qualify for exemptions, it’s critical to prepare for timely filing of the DMT and IIR/UTPR returns, ensuring compliance with all Pillar Two requirements.

How TransferPricing.report Supports Australia Compliance

Exemption Review Support: TransferPricing.report can assist multinational groups in reviewing their eligibility for exemptions based on their specific operational and financial details.
Transfer Pricing Documentation: We help prepare and maintain the necessary documentation to support exemption claims or to meet filing requirements where exemptions do not apply.
Audit-Readiness and Compliance: TransferPricing.report ensures MNEs stay audit-ready by aligning their Transfer Pricing strategies with Australian tax requirements under Pillar Two, minimizing the risk of non-compliance.

Final Takeaway: Simplified Filing Requirements, Continued Compliance Focus

The final rules on exemptions from the obligation to file Pillar Two tax returns provide important relief for qualifying MNEs, simplifying the compliance process. However, it remains crucial for companies to assess their eligibility, maintain documentation, and ensure full compliance with the filing requirements if they do not qualify for exemptions.

Contact TransferPricing.report specialists to ensure your compliance strategy is aligned with Australia’s updated Pillar Two tax return exemptions and other transfer pricing regulations.

This is general information only and not professional advice. Consult a professional before acting.

South Africa: Transfer Pricing Implications of Transition to ZARONIA

Transfer Pricing — Tue, 24 Mar 2026 08:45:07 +0000

The South African Reserve Bank has introduced the South African Rand Overnight Index Average (ZARONIA) as the new reference rate for Rand-denominated financial contracts, replacing the long-standing Johannesburg Interbank Average Rate (JIBAR).

For multinational groups, this shift has direct transfer pricing implications, particularly for intercompany loans and other related-party financial arrangements.

What Has Changed?

ZARONIA replaces JIBAR as the primary benchmark interest rate in South Africa.
Financial instruments referencing JIBAR will need to transition to the new rate.
The change applies to both third-party and related-party contracts.

JIBAR historically provided a widely accepted market benchmark for determining arm’s length interest rates. ZARONIA now takes on that role.

Why This Matters for Transfer Pricing

In transfer pricing, intercompany loans must reflect an arm’s length interest rate — meaning a rate that unrelated parties would agree to under comparable circumstances.

Because benchmark rates are central to financial pricing:

A change in reference rate affects how interest is calculated.
Loan agreements referencing JIBAR may require amendment.
Transfer pricing documentation must reflect the new benchmark.

The transition to ZARONIA is expected to produce arm’s length outcomes, provided the pricing remains commercially aligned. However, documentation updates are essential to demonstrate compliance.

Practical Implications for Multinational Groups

Multinational enterprise (MNE) groups with South African entities should:

1. Review Intercompany Loan Agreements

Identify contracts referencing JIBAR and determine whether amendment clauses allow automatic transition.

2. Update Transfer Pricing Documentation

Ensure Local Files and financial transaction analyses reference ZARONIA instead of JIBAR.

3. Confirm Arm’s Length Position

Reassess interest spreads and margins to confirm the new benchmark produces market-aligned results.

4. Maintain Contemporaneous Support

Retain internal memos explaining the transition and confirming no material tax impact.

Will the Transition Trigger Tax Consequences?

In principle, replacing JIBAR with ZARONIA should not create unintended tax consequences, provided:

The pricing methodology remains consistent.
The economic substance of the arrangement does not change.
Documentation clearly supports the adjustment.

However, failure to update agreements and documentation could raise audit questions, even if the rate remains commercially reasonable.

Broader Context: Financial Transactions Under Increased Scrutiny

Tax authorities globally are paying closer attention to:

Intercompany financing structures
Treasury centers
Benchmark transitions
Interest deductibility
Pillar Two interactions

Even technical changes like benchmark replacements require careful documentation to avoid unnecessary disputes.

How TransferPricing.report Can Support You

TransferPricing.report assists multinational groups with:

Intercompany loan benchmarking
Financial transaction transfer pricing analysis
Documentation updates following benchmark transitions
Review of treasury and funding structures
Audit defense and risk assessment

We help ensure your financial arrangements remain aligned with arm’s length standards and regulatory expectations.

Final Thought

The transition from JIBAR to ZARONIA is primarily a technical market development — but from a transfer pricing perspective, documentation and consistency matter.

Proactive review and timely updates will ensure that related-party financial arrangements remain compliant and defensible in South Africa’s evolving regulatory landscape.

This is general information only and not professional advice. Consult a professional before acting.

India: 2026-2027 Budget Includes Transfer Pricing Changes

Transfer Pricing — Wed, 18 Mar 2026 17:30:33 +0000

Introduction: The Finance Minister of India presented the Union Budget for fiscal year 2026-2027, which includes a series of tax measures, including key updates to Transfer Pricing provisions as part of the Income-tax Act, 2025, effective April 1, 2026.

The updates aim to simplify compliance, offer more certainty, and align India’s tax system with international practices, particularly in the areas of IT services and data center operations.

Transfer Pricing Provisions in the Budget

What Has Changed?

Rationalization of Safe Harbor Rules: The budget proposes a unified safe harbor cost-plus margin of 15.5% for IT services, including software development, IT-enabled services, KPO services, and contract R&D services. This replaces the previous margins of 17-18% (and 24% for R&D services).
Increased Safe Harbor Threshold: The threshold for applying safe harbor provisions has been increased from INR 3 billion to INR 20 billion, with the ability to apply for a continuous period of five years via an automated, rule-based approval process.
New Safe Harbor for Data Center Services: A 15% safe harbor on cost has been introduced for Indian companies providing data center services to foreign related party resellers.
Unilateral APA Fast-Tracking: A plan has been put in place to fast-track unilateral advance pricing agreements (APAs) for companies engaged in IT services, aiming for completion within two years, with an extension of six months at the taxpayer’s request.

Other Relevant Changes

Tax Holidays for Data Centers: Tax holidays are introduced for foreign companies using data centers in India or providing tools/machinery to contract manufacturers in custom bonded warehouses.
Other Key Tax Provisions: The budget also includes changes to MAT, buyback tax, securities transaction tax, and GST amendments, which will affect the overall tax landscape.

Impact on Compliance and Risk Management

Simplified Compliance: The rationalization of the safe harbor rules simplifies the compliance process for companies, particularly in the IT and data center sectors. However, MNEs must ensure that they meet the updated eligibility criteria and documentation standards.
Increased Scrutiny on Data Centers: With the introduction of new safe harbor provisions for data centers, there may be heightened scrutiny on transactions within this sector. Companies must ensure robust documentation and compliance to avoid challenges.
Faster Resolution with APAs: The fast-tracking of unilateral APAs for IT service providers provides a clearer and faster path for resolving Transfer Pricing issues, reducing the risk of long audits or disputes.

Practical Implications for Multinational Groups

Review of Transfer Pricing Documentation: Companies should update their Transfer Pricing studies and policies to ensure alignment with the new safe harbor provisions and thresholds.
Internal Processes: MNEs should streamline their internal processes to track related-party transactions exceeding INR 20 billion and ensure all documentation is ready for submission under the new safe harbor provisions.
Engagement with the APA Process: IT service providers should consider applying for unilateral APAs to gain clarity on their Transfer Pricing positions.

Alignment with Global Transfer Pricing Practices

How This Fits into India’s Broader Transfer Pricing Strategy

Alignment with OECD Guidelines: India’s update to its safe harbor provisions and the introduction of fast-tracked APAs reflect a closer alignment with OECD Transfer Pricing guidelines, enhancing transparency and simplifying compliance for multinational groups.
Tax Certainty and Simplification: The changes aim to make India’s Transfer Pricing system more predictable for MNEs, aligning with global efforts to streamline tax compliance and reduce disputes.
Focus on Key Sectors: The introduction of specific safe harbor rules for IT services and data centers reflects India’s focus on key sectors that play a central role in the country’s economy, with a push towards increasing foreign investment.

Future Outlook: These changes signal a continued trend toward simplifying Transfer Pricing processes in India. As India further aligns with OECD recommendations, MNEs can expect continued refinements that will make it easier to manage compliance and mitigate risks associated with cross-border transactions.

What Multinational Groups Should Do Now

Review Transfer Pricing Policies and Documentation: Ensure your Transfer Pricing documentation reflects the updated safe harbor provisions and thresholds. Companies should also evaluate whether they qualify for the new provisions, particularly in IT and data center services.
Monitor Safe Harbor Eligibility: Companies exceeding INR 20 billion in related-party transactions should confirm that they meet the new safe harbor requirements and are ready for potential audits or reviews.
Engage in the APA Process: IT service providers should consider applying for a unilateral APA, ensuring all documentation is prepared for a faster resolution.

How TransferPricing.report Supports India Compliance

Transfer Pricing Documentation Review: TransferPricing.report can assist in reviewing and aligning your Transfer Pricing documentation with India’s revised Transfer Pricing rules.
APA Support: We offer guidance in navigating the fast-tracked unilateral APA process, ensuring timely and efficient submissions.
Audit-Readiness and Risk Management: Our services help MNEs stay audit-ready by providing comprehensive support in managing Transfer Pricing risks and ensuring compliance with the latest regulations.

Final Takeaway: Simplified Rules, Enhanced Compliance

The significant changes to India’s Transfer Pricing framework in the 2026-2027 budget offer streamlined processes and enhanced compliance opportunities. However, companies must still ensure compliance with updated provisions and maintain robust documentation to mitigate any risk of penalties.

Contact TransferPricing.report specialists to ensure your compliance strategy is aligned with India’s updated Transfer Pricing regulations and to optimize your Transfer Pricing documentation for the upcoming fiscal year.

This is general information only and not professional advice. Consult a professional before acting.

OECD: Updated Manual on Mutual Agreement Procedures (MAP)

Transfer Pricing — Mon, 09 Mar 2026 13:15:59 +0000

The Organisation for Economic Cooperation and Development (OECD) has released the 2026 edition of the Manual on Effective Mutual Agreement Procedures (MAPs), designed to support the BEPS Inclusive Framework and Forum on Tax Administration (FTA) in improving international tax dispute resolution. This revised manual provides crucial non-binding guidance to competent authorities and taxpayers on conducting MAPs effectively. It introduces new best practices and practical templates that can enhance the resolution of international tax disputes.

Key Changes in MAP Guidance

What Has Changed?

Updated MAP Guidance: The 2026 edition of the OECD MAP manual offers detailed, practical guidance for resolving international tax disputes between jurisdictions. The updated manual now includes 59 best practices developed by competent authorities in the FTA MAP Forum.
Introduction of MAP Arbitration: For the first time, the manual includes best practices and guidance related to MAP arbitration, providing a structured approach for jurisdictions new to the process.
Procedural and Organizational Updates: The manual offers extensive procedural advice and addresses key organizational considerations, including staffing and solution-oriented strategies for resolving disputes.

What Has Not Changed?

Fundamental MAP Process: While the procedural guidance and best practices have been updated, the core principles of the MAP process remain unchanged. The MAP continues to serve as a tool for resolving transfer pricing and other tax disputes between jurisdictions through mutual agreement.
Ongoing Compliance Expectations: The general compliance expectations for companies involved in tax disputes remain unchanged. Companies must still ensure they are prepared to engage in MAPs and cooperate with tax authorities during the dispute resolution process.

Implications for Transfer Pricing Risk Management

Enhanced Focus on Dispute Resolution: The new guidance offers a more structured approach to resolving Transfer Pricing disputes, which is particularly beneficial for multinational enterprises (MNEs) facing cross-border tax challenges. The inclusion of MAP arbitration provides a clearer path for resolving disputes where mutual agreement may be difficult.
Impact on Audits: With updated guidance on MAPs, tax authorities may take a more proactive approach to resolving Transfer Pricing disputes and clarifying positions early on, which can reduce the risk of protracted audits.
Penalties for Non-compliance: Failure to comply with MAP processes or to engage in resolution discussions may lead to prolonged tax disputes and penalties. The OECD’s best practices provide a roadmap for avoiding these pitfalls.

Practical Implications for Multinational Groups

Proactive Dispute Prevention: MNEs should consider reviewing the new MAP procedures to understand how they can be leveraged to resolve disputes before they escalate into prolonged audits or litigation.
Documenting Transfer Pricing Positions: Multinational groups must ensure their Transfer Pricing documentation and policies are robust and can withstand scrutiny if a MAP is requested by tax authorities.
Engagement in MAP Processes: Companies involved in international tax disputes should prepare to engage proactively in MAPs, using the updated guidelines to enhance their dispute resolution strategies.

Alignment with OECD’s Broader Transfer Pricing Strategy

How This Fits into the OECD’s Broader Transfer Pricing Framework

Alignment with BEPS and OECD Guidelines: The revised MAP manual aligns with the OECD’s broader efforts under the BEPS Inclusive Framework to ensure tax certainty and dispute resolution in an increasingly complex global tax environment.
Improved Administrative Efficiency: The updated manual aims to enhance administrative efficiency by offering clear guidance and templates, thus reducing the time spent on dispute resolution and minimizing the risk of tax uncertainties for MNEs.
Trends in International Tax Disputes: This guidance reflects a broader trend toward more efficient, structured, and solution-oriented approaches to international tax disputes, in line with global efforts to foster better tax governance.

Future Outlook: The revised MAP manual sets the stage for continued evolution in the way international tax disputes are handled. MNEs can expect more streamlined and transparent processes for resolving disputes, particularly as the MAP arbitration process is rolled out.

What Multinational Groups Should Do Now

Review Transfer Pricing Policies: MNEs should ensure their Transfer Pricing policies and documentation are robust enough to withstand scrutiny if a MAP procedure is initiated.
Prepare for Proactive Dispute Resolution: Multinational groups should familiarize themselves with the new MAP procedures and integrate these into their tax risk management strategies.
Ensure Internal Governance: Ensure that the tax, legal, and finance teams are aligned and prepared to engage in MAP processes if necessary, leveraging the updated OECD guidance.

How TransferPricing.report Supports OECD Compliance

MAP Guidance and Support: TransferPricing.report helps multinational groups navigate the complexities of MAP processes, ensuring that companies are prepared to engage with tax authorities effectively.
Transfer Pricing Documentation: We assist in preparing and reviewing Transfer Pricing documentation to ensure it is defensible and aligned with OECD Transfer Pricing guidelines, including MAP requirements.
Audit-Readiness and Risk Management: TransferPricing.report helps MNEs stay audit-ready by offering support in managing Transfer Pricing risks and ensuring compliance with international tax dispute resolution procedures.

Final Takeaway: Streamlined Dispute Resolution, Improved Compliance

The 2026 update to the OECD Manual on Effective MAPs represents a major step forward in providing structured, efficient, and transparent dispute resolution processes. While the procedural details have been enhanced, the fundamental standards for compliance remain as rigorous as ever.
Multinational groups must be proactive in understanding the revised MAP procedures and preparing their documentation and strategies accordingly to minimize risks in tax disputes.

Contact our Transfer Pricing experts today and stay ahead of the upcoming EU tax reforms.

This is general information only and not professional advice. Consult a professional before acting.

Latvia: New Controlled Transactions Reporting Rules

Transfer Pricing — Mon, 02 Mar 2026 15:49:29 +0000

Starting January 1, 2026, Latvia has implemented new transfer pricing regulations requiring certain businesses to submit a controlled transactions report to the State Revenue Service (SRS). This new requirement aims to enhance compliance, reduce administrative burdens, and improve the overall transparency of cross-border transactions between related entities.

Key Developments in Latvia’s Transfer Pricing Regulations

Who is Affected:

Companies with controlled transactions involving related nonresident parties where the total transaction value exceeds €250,000 in the previous financial year must submit the report.
The report will include detailed information about intercompany transactions, including goods, services, and financial transactions with related parties.

2. Report Submission Deadline for 2025:

The deadline for submission of the controlled transactions report for the 2025 financial year is December 31, 2026.
This gives companies a full year to prepare the necessary documentation and submit it to the SRS.

3. Penalties for Non-Compliance:

Companies failing to submit the report within 30 days of an SRS request could face penalties.
The penalty is up to 1% of the transaction value, with a maximum penalty of €100,000. This is a significant deterrent for non-compliance.

Why This Matters for Multinational Enterprises (MNEs)

Increased Focus on Compliance:

The requirement to submit a controlled transactions report aims to improve compliance with international tax standards, particularly those outlined by the OECD in the Base Erosion and Profit Shifting (BEPS) framework.
Multinational groups involved in cross-border transactions must now be extra vigilant in ensuring that they document their intercompany pricing arrangements accurately.

2. Documentation and Reporting:

Businesses must ensure that they correctly document and report all related-party transactions, meeting the thresholds of €250,000. This includes transactions such as the sale of goods, services, intellectual property, loans, or any other financial dealings.
Proper Transfer Pricing documentation will be required to demonstrate that the prices charged between related parties are at arm’s length (i.e., they reflect market conditions and not artificially set prices).

3. Avoiding Penalties:

Penalties for failing to comply can be significant—up to €100,000, which could greatly impact the financials of a company.
Timely and accurate submissions are crucial to avoiding these penalties, and companies should prepare well in advance.

What Multinational Groups Should Do Now

Track and Review Relevant Transactions:

Multinational groups should identify all related-party transactions that exceed the €250,000 threshold in 2025, as these will require reporting. This includes:
Sales of goods and services
Intellectual property transactions
Financial arrangements (e.g., loans or interest payments)
Ensure that all relevant documentation is collected and stored.

2. Prepare the Controlled Transactions Report:

The report should detail the transactions, the pricing methods used, the involved entities, and their respective tax jurisdictions.
The report will also need to provide a thorough justification for the pricing used in intercompany transactions, aligning with OECD Transfer Pricing Guidelines.

3. Be Aware of the Penalty System:

Failure to submit the report within 30 days of an SRS request can result in severe penalties, so companies should make submitting the report a priority and avoid delays.
Implement processes to ensure that the reporting system is in place ahead of the deadline.

4. Ensure Cross-Departmental Coordination:

Tax, finance, and legal teams should work together to compile the necessary data, as the report will involve both tax compliance and financial reporting.
Coordination between departments ensures that the report is accurate and submitted on time.

How TransferPricing.report Can Support You

TransferPricing.report offers comprehensive support to multinational enterprises navigating the complexities of controlled transactions reporting in Latvia:

Transfer Pricing documentation review to ensure it meets OECD standards
Controlled transactions report preparation for compliance with Latvian tax regulations
Penalties mitigation by ensuring timely and accurate report submissions
Custom reporting solutions for large groups with complex, cross-border transactions
Ongoing compliance monitoring to stay aligned with changing regulations

By partnering with TransferPricing.report, your business can streamline compliance and ensure that all reporting obligations are met efficiently, helping you avoid penalties and reduce administrative burdens.

Final Takeaway: Latvia’s controlled transactions report

The introduction of Latvia’s controlled transactions report is a significant development in its ongoing efforts to enhance transfer pricing transparency and align with global standards. Multinational groups must begin preparing now to meet the €250,000 transaction threshold and avoid penalties for non-compliance. Early planning and careful documentation will ensure that your business stays compliant with Latvia’s evolving tax regulations.

This is general information only and not professional advice. Consult a professional before acting.

Croatia: Implementation of DAC8 and DAC9 requirements

Transfer Pricing — Fri, 27 Feb 2026 14:35:09 +0000

Croatia has recently published the Law on Amendments to the Act on Administrative Cooperation in the Field of Taxation, marking an important regulatory change. This law, published in the Official Gazette in December 2025, implements two key EU directives: DAC8 and DAC9.

These amendments are critical for multinational groups with cross-border operations in the EU. They aim to enhance transparency in the cryptoasset sector and ensure that information related to Pillar Two taxation is automatically exchanged between EU member states.

Key Changes and Impact

What Has Changed?

DAC8 Implementation: This directive mandates the automatic exchange of information regarding cryptoassets among EU member states. It aims to improve compliance, reduce tax evasion, and enhance financial transparency.
DAC9 Implementation: This directive facilitates the exchange of information related to Pillar Two, allowing tax authorities in the EU to share tax data concerning multinational corporations’ tax rates and profits in real-time.

What Has Not Changed?

Ongoing Compliance Requirements: The core compliance obligations for Transfer Pricing documentation remain unchanged. Companies must still ensure that they are maintaining comprehensive and defensible Transfer Pricing documentation, even with the introduction of these new reporting requirements.
Audit and Documentation Standards: Tax authorities will continue to enforce high standards of documentation, and failure to provide this information when requested will still attract penalties.

Transfer Pricing Risk and Compliance

What This Means for Transfer Pricing Risk

Risk Management Adjustments: The implementation of DAC8 and DAC9 increases the complexity of compliance for multinational groups operating in the EU. The automatic exchange of information related to cryptoassets and Pillar Two means that companies must be more diligent in their reporting and documentation practices to mitigate potential risks.
Impact on Audits: Given the increased sharing of tax information, tax authorities will likely focus more on auditing companies’ compliance with EU-wide tax regulations.
Penalties for Non-compliance: Non-compliance or failure to submit the required information for cryptoassets or Pillar Two may lead to fines or penalties, especially since authorities will now have direct access to this data.

Practical Implications for Multinational Groups

Documentation Readiness: Companies must ensure that all cryptoasset transactions and Pillar Two data are well-documented and accessible for audits. Having up-to-date records on these areas is crucial for audit readiness.
Internal Governance: Tax, legal, and finance teams must establish clear protocols to manage the increased volume of data and ensure that information can be easily accessed and shared in compliance with EU directives.
Revised Policies: Multinational groups must review and update their internal policies to align with DAC8 and DAC9’s reporting and compliance requirements.

Broader Implications and Compliance Alignment

How This Fits into Croatia’s Broader Transfer Pricing Strategy

Alignment with OECD Guidelines: Croatia’s implementation of DAC8 and DAC9 is part of a broader effort to align its tax reporting with international standards, including OECD Transfer Pricing guidelines and the EU’s commitment to combating base erosion and profit shifting (BEPS).
Efficiency Gains: The law’s implementation streamlines the reporting process for multinational corporations operating in the EU, reducing the complexity of cross-border tax reporting.
Trends in Transfer Pricing Regulations: These changes align with broader global tax transparency trends, including the increasing emphasis on reporting digital assets and automatic data exchanges among tax authorities.

Future Outlook: This regulatory change is just one of many steps toward greater tax transparency within the EU. Multinational groups will need to stay updated as further amendments or clarifications may come into play.

What Multinational Groups Should Do Now

Steps to Take Before Filing

Review Transfer Pricing Studies: Ensure that all documentation, particularly related to cryptoassets and Pillar Two, is complete and aligns with the new reporting requirements.
Prepare for New Reporting: Companies should review the DAC8 and DAC9 requirements in detail, confirming that their systems are capable of automatically exchanging information with other EU member states.
Ensure Data Availability: Ensure that all necessary documentation regarding cryptoassets and Pillar Two data is ready for review by tax authorities.

How TransferPricing.report Supports Croatia Compliance

Local File Preparation: TransferPricing.report can help multinational groups prepare Croatia-compliant Local Files, ensuring that they meet the country’s specific documentation standards.
Transfer Pricing Documentation Review: We assist in reviewing and updating Transfer Pricing studies to ensure full compliance with DAC8 and DAC9’s new data exchange requirements.
Audit-Readiness Support: TransferPricing.report helps multinational groups stay prepared for audits by keeping documentation aligned with EU requirements and ready for tax authority requests.
Governance and Centralized Storage: TransferPricing.report can help in establishing centralized storage and governance processes for managing Transfer Pricing documentation.

Final Takeaway: Streamlined Reporting, Stronger Compliance

Croatia’s adoption of DAC8 and DAC9 brings important changes to Transfer Pricing compliance, simplifying the filing process while maintaining robust reporting standards. Multinational groups need to ensure that they are fully prepared to comply with these new EU regulations.
The automatic exchange of information demands that companies maintain clear, complete, and accessible documentation, particularly around cryptoassets and Pillar Two data.

This is general information only and not professional advice. Consult a professional before acting.

France: GloBE Information Return (GIR) Filing Timeline

Transfer Pricing — Thu, 26 Feb 2026 14:01:18 +0000

The French tax authorities have released a user guide for the GloBE Information Return (GIR), providing much-needed clarity on how multinational enterprises must comply with Pillar Two reporting obligations for the first time in 2026. The guide covers the legal framework, technical requirements, and filing process, confirming that submissions must follow OECD-aligned XML standards.

Why This Matters for Pillar Two Compliance in France

France is among the first EU jurisdictions to publish detailed operational guidance for the GIR. This signals a shift from conceptual Pillar Two rules to hands-on implementation and enforcement, with strict timelines and technical expectations. For many groups, this will be their first real test of Pillar Two data readiness.

Key Developments

Official GIR user guide issued: Covers legal basis, content requirements, and filing mechanics
XML-based filing mandated: In line with OECD technical standards

Detailed appendices included:

XML tags and schemas
Sample GIR form
IT control and validation mapping

Filing window confirmed for FY 2024:

Platform opens: May 2, 2026
Filing deadline: June 30, 2026

Test environment available: From April 1, 2026, allowing early validation of XML files

What This Means for Multinational Groups

For groups with French operations or a French filing obligation:

Pillar Two compliance is now highly technical, not just tax-policy driven
GIR data must align across finance, tax, and Transfer Pricing systems
Errors in XML structure or data mapping may delay or invalidate filings
Late preparation increases the risk of last-minute IT and compliance issues

The availability of a test platform highlights that tax authorities expect groups to test, validate, and correct their filings well before the deadline.

Practical Takeaways for GIR Filing in France

Review the GIR user guide and XML requirements in detail
Begin data mapping between accounting systems, Pillar Two models, and GIR fields
Use the test platform from April 2026 to validate XML files early
Ensure Transfer Pricing outcomes and ETR calculations are consistent with GIR disclosures
Coordinate early between tax, IT, and finance teams to avoid bottlenecks

How TransferPricing.report Can Support You

TransferPricing.report supports multinational groups through the full lifecycle of Pillar Two and GIR compliance, including:

GIR readiness assessments and data mapping support
Review of Pillar Two calculations and ETR consistency
Alignment of Transfer Pricing documentation with GIR disclosures
XML filing guidance and pre-submission validation support
Ongoing monitoring of France and EU Pillar Two developments

We help turn complex technical requirements into structured, manageable compliance processes.

Final Takeaway

France’s GIR user guide makes one thing clear: Pillar Two reporting is now operational, technical, and deadline-driven. Multinational groups that start preparing early—both from a tax and systems perspective—will be far better positioned to meet filing requirements smoothly when the platform opens in 2026.

This is general information only and not professional advice. Consult a professional before acting.

Germany: Germany Releases Pillar Two Tax Return Forms

Transfer Pricing — Fri, 20 Feb 2026 18:18:57 +0000

Germany’s tax administration has now made the Pillar Two tax return forms available on the Elster e-filing platform. These returns are crucial for multinational enterprises (MNEs) subject to Pillar Two rules and must be filed alongside the GloBE Information Return (GIR).

Key Details of the Filing Requirements

Required Returns:

Qualified Domestic Minimum Top-Up Tax (QDMTT)
Income Inclusion Rule (IIR)
Undertaxed Profits Rule (UTPR)

Filing Deadline:

Returns must be submitted within 15 months after the end of the fiscal year.
For the transitional year, there is an 18-month filing period.
The deadline is the same as for the GIR, ensuring timely and coordinated submissions across these interconnected filings.

Even Without Top-Up Tax Liability:

Mandatory filing even if there is no top-up tax liability for the respective year.
This ensures uniform reporting of all qualifying tax positions, regardless of whether a top-up tax is triggered.

Online Submission:

The Elster e-filing platform is the designated portal for submitting Pillar Two returns.
Taxpayers will need to ensure that their systems and data are compatible with the platform’s XML filing requirements.

Why This Matters for Multinational Groups

Multifaceted Compliance: These changes emphasize the complexity of Pillar Two compliance, requiring MNEs to manage multiple forms and deadlines under a unified reporting framework.

The QDMTT, IIR, and UTPR rules are interrelated and may affect your group’s overall tax positions.

Data Coordination: Accurate Transfer Pricing documentation is crucial for calculating IIR and UTPR. If transfer pricing results are misaligned with global minimum tax rules, your group could face unnecessary tax adjustments and penalties.

Effective ETR (effective tax rate) calculations will determine whether the top-up tax applies.

Expanded Filing Scope: This marks a wider shift towards mandatory transparency in tax compliance. Even if there is no additional tax liability for the group, the requirement to file means greater data scrutiny and cross-border cooperation between tax authorities.

Compliance Risks: Failing to meet these filing requirements can result in penalties and increased audit risks, making timely submission a critical part of risk management.

Practical Next Steps for Multinational Groups

Review the Filing Deadlines:

Mark the 15-month filing deadline (or 18-month transitional deadline) on your calendar and ensure internal teams are aligned with these timelines.

Confirm Data Readiness:

Ensure that Transfer Pricing data and global tax position calculations are complete and up-to-date.
Cross-check that your internal financial systems can generate the necessary XML formats required for Elster submissions.

Coordinate Across Departments:

Tax, finance, and Transfer Pricing teams must collaborate closely to ensure all data is consistent across the GIR and the Pillar Two returns.
Consider appointing a project manager to oversee the filing process and ensure that all documentation is properly aligned.

File Early with the Test Platform:

Use the test platform provided by the German tax authorities to validate your Pillar Two returns and identify any potential issues before the actual submission.
The test platform will allow you to correct any data or system mismatches early.

Monitor Compliance Regularly:

Ongoing compliance will require groups to monitor not only annual reporting but also changes in Pillar Two guidance and local tax rules.
Regular internal audits of tax positions, Transfer Pricing policies, and global tax filings can help catch discrepancies early.

How TransferPricing.report Can Support You

TransferPricing.report offers end-to-end support for multinational groups navigating Pillar Two compliance, including:

Pillar Two return preparation and data alignment with the GIR filing.
Transfer Pricing and ETR analysis to ensure that IIR and UTPR compliance thresholds are met.
Ongoing monitoring of the Elster e-filing system and technical requirements.
Cross-border compliance support for multiple jurisdictions involved in your group’s filings.

We help you stay compliant by simplifying complex reporting requirements and ensuring that your filings are timely, accurate, and aligned with global tax standards.

Final Thought

Germany’s release of Pillar Two tax return forms reinforces the growing importance of tax transparency and timely compliance. With the Elster platform now open for filing, multinational groups must prepare well in advance to meet the 15-month filing deadline. Early data gathering, coordination, and system readiness will be crucial to managing risks and ensuring smooth compliance.

This is general information only and not professional advice. Consult a professional before acting.

Cyprus Transfer Pricing: New Local File Thresholds for 2026

Transfer Pricing — Fri, 20 Feb 2026 15:47:46 +0000

Cyprus has updated its transfer pricing documentation requirements, significantly impacting how businesses handle Local File preparations starting from 2026. The House of Representatives passed a reform package in December 2025, bringing about crucial changes to the materiality thresholds for transfer pricing reporting and adjusting the definition of connected persons.

These updates will directly influence multinational enterprises (MNEs) and Cyprus-based companies with controlled transactions across various categories. Here’s what you need to know:

New Local File Thresholds: What’s Changed?

Starting in 2026, Cyprus will increase the Local File threshold for preparing transfer pricing documentation based on transaction size:

€10 million for financial transactions
€5 million for goods transactions
€2.5 million for other categories of controlled transactions

Why This Matters for MNEs

Companies involved in large cross-border transactions may see a reduced administrative burden, as only those exceeding the new thresholds need to prepare a Local file.
For smaller transactions, businesses can still be required to comply with transfer pricing documentation but may not need to create a full Local file.

Revised Definition of “Connected Persons”

A significant amendment is the new definition of “connected persons” in the Cyprus Income Tax Law:

Directors or consultants are now considered connected persons if they hold at least 50% of the voting rights in a company.
This includes both direct voting rights and those held by connected individuals (e.g., family members or related entities).

Key Implications

The revised definition broadens the scope of related-party transactions that must be reported.
Control relationships will now be scrutinized more closely, affecting taxable transactions between related parties.

What Multinational Groups Should Do

Review internal transfer pricing policies to align with the new Local File thresholds.
Reassess ownership structures and director/consultant relationships to ensure compliance with the updated definition of connected persons.
Prepare for audits or requests for documentation related to new reporting thresholds.

How TransferPricing.report Can Support You

At TransferPricing.report, we provide expert assistance with navigating Cyprus’ transfer pricing documentation and Local File requirements.

Our services include:

Transfer pricing policy development in line with new thresholds
Documentation preparation for Cyprus Local Files
Audit-readiness strategies
Comprehensive reviews of intercompany transactions under the updated laws

Final Takeaway: Stay Ahead of Cyprus’ 2026 Transfer Pricing Changes

Cyprus’ updated Local File thresholds and connected person rules create both opportunities for simplification and new compliance challenges. Early action is essential to ensure your transfer pricing practices align with the new regulatory landscape.

Operating in Cyprus?
Confused about how these changes impact your Transfer Pricing policies?

Contact our experts to ensure your compliance strategy is ready for 2026.

In Cyprus, getting ahead of tax reforms ensures smooth compliance and avoids future risks.

This is general information only and not professional advice. Consult a professional before acting.