The Ministry of Finance announces more controls on income taxes, in particular transfer prices. The tools used by the controllers are to be more advanced and the controllers specially trained.
The tax settlement practice of the audit bodies has so far been to focus on VAT. The tax on goods and services generates the most budget revenues and at the same time gives a great deal of room for abuse.
Many entrepreneurs combine economic activities with criminal activities, participating in activities such as tax carousels aimed at extorting VAT returns. Estimates show that tax crime is more profitable than criminal crime, and it is expanding circles, which further increases the repressive field of the control apparatus.
Unfortunately, this often affects entrepreneurs who have nothing to do with harmful behaviour.
The Ministry of Finance intends to focus on income taxes, in particular CIT. Tax optimizations and transfer pricing documentation will be screened. Controls are to be carried out in the first year 2017. Officials can be expected to begin to analyse more closely the pricing valuation applied between related parties. A representative of the Ministry of Finance declares to have excellent quality analytical tools and an advantage over companies using aggressive tax optimizations.
All companies covered by the transfer pricing obligation should, for their own safety, pay the utmost care and remain ready to provide explanations in the case of checks.
Modified OECD Guide
In the light of the changes and uncertainties that the Ministry of Finance provides us with in view of the new documentation and reporting requirements, it is worth paying attention to the work of the Organisation for Economic Cooperation and Development.
In February, an updated version of the guide on implementing CbCr procedures was published. The updated version includes a modified definition of the total consolidated revenues of the group.
The question of the transfer of business information between jurisdictions was also raised in terms of the need for individual jurisdictions to maintain confidentiality rules and of possible deficiencies in this respect.
This is an OECD response to concerns raised by taxpayers about the security of confidential data on capital groups that will be transmitted in the framework of the exchange of tax information between different countries. The modified report can be downloaded directly from the OECD website:
http://www.oecd.org/ctp/guidance-on-the-implementation-of-country-by-country-reporting-beps-action-13.pdf