The Ministry of Finance of the Slovak Republic issued new guidelines concerning the transfer pricing documentation requirements.
The new guidelines—no. MF/019153/2018-74 (December 2018)—replaced prior guidelines from 2016, and reflect significant changes with respect to the criteria for determining the types of documentation that taxpayers must maintain as well as the content for each type of documentation.
In general, the transfer pricing documentation requirements in the December 2018 version of the guidelines reflect recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13.
Like the 2016 version of the transfer pricing documentation guidelines, the 2018 version recognizes three types of documentation—simplified, basic, and full-scope. However, the 2018 guidelines reflect significant changes when compared to the 2016 guidelines specifically concerning the criteria for determining the type of documentation that a taxpayer must keep, as well as the content of each type of documentation. For example, the simplified documentation under the 2018 guidelines is now a prescribed form (included as an appendix to the 2018 guidelines).
In addition, the Master file of the full-scope documentation reflects one of the most significant changes to the guidelines and now is more complex. Depending on the type of information requested, preparation of the Master file by Slovak subsidiaries of multinational entities could be very challenging without intensive support from the taxpayer group’s headquarters. Thus, taxpayers need to consider making sure that there is sufficient time for its preparation.
Taking into account the significant changes in the 2018 version of the transfer pricing documentation guidelines and also considering that taxpayers with related-party transactions will be affected by these rules, careful examination of the new guidelines is warranted in the preparation of transfer pricing documentation.
Note that the deadline for submitting transfer pricing documentation has not changed—that is, it is due 15 days after a request by the tax authorities. No extension is allowed.
Read a February 2019 report prepared by the KPMG member firm in Slovakia
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