KPMG can assist your company with reducing the potential cost of the new transfer pricing rules.
KPMG can assist your company with reducing the potential cost of the new TP rules.
It is expected that starting from 1 January 2019 significant changes to article 30-1 of Tax Code of the Republic of Belarus (hereinafter – Tax Code) describing the control over the transfer pricing (hereinafter – TP), will come into force. The existing 20-percentage deviation from market prices will no longer be allowable. Among other provisions, the announced drafted document of the Tax Code contains changes and amendments regarding TP in the following:
The expected Tax Code revision as well as new concepts and definitions proposed by the drafted document will provide legal basis for applying the best international practice and using knowledge and skills accumulated by other countries in carrying out market researches and preparing TP documentation when justifying prices in Belarus, which are doubtful and not always justified under the effective local tax legislation.
Carrying out early analysis to identify controlled transactions and related tax risks allow the company to be prepared for tax authority’s inquiry and prevent adverse tax consequences.
According to the recent year’s tax audits, the 20-percentage deviation from market prices provided by the law has been a crucial provision allowing companies to be free enough in determining TP in intra-group controlled transactions. Those few market researches of prices prepared by companies in Belarus, as a rule, revealed deviations that were within the 20-percentage permissible value. After the 20-percentage deviation cancellation, the transfer prices fixing will acquire additional complexity for international groups of companies and will require the qualitative TP documentation preparation and justifications.
KPMG has significant experience in providing TP services and will assist сompanies in assessing tax risks, reducing them, developing a defensive position and preparing an economic justification and TP documentation when justifying prices in Belarus.
Our TP services include: