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Advance Pricing Agreement Luxembourg

Transfer pricing studies must, in general, comply with OECD transfer pricing guidelines for multinational companies and tax authorities and follow the OECD model convention. However, in practice, Luxembourg tax authorities can accept documents prepared for foreign legal systems (European-wide reference studies, if any). Under Luxembourg transfer pricing legislation, transactions between related parties (both in Luxembourg and where a party is imposed in a foreign jurisdiction) must be subject to the “arm length principle”. This requires the subject to declare in his return a downward adjustment in profits if the transfer prices do not conform to the principle of arm length. The Luxembourg tax authorities may require the taxpayer to have all the facts relevant to the examination of a tax debt. Therefore, the subject must provide all the necessary supporting documents to facilitate the work of the tax authorities. In the absence of documents or if the documents are incomplete (for example. B where the taxpayer has not fulfilled its accounting and accounting obligations, if the transactions are not documented, etc.), the taxpayer does not comply with its obligation to cooperate and the tax authorities may make a transfer pricing adjustment. The commentary indicates that these tax treaties can still be applied for fiscal year 2019 before 2015, provided the agreement remains in line with current law.

Brazilian transfer pricing rules apply to transactions between a Brazilian party and a foreign-bound entity or an entity residing in a tax haven or preferred tax system. In general, Brazilian transfer pricing rules follow the principles of arm length, but differ significantly from OECD guidelines, as they provide only certain legal methods and margins. Legislation allows the taxpayer to freely choose the method, as there is no better method and no functional analysis is necessary. There is no need to establish transfer pricing documentation per se. However, Luxembourg taxpayers must be able to justify and document transactions with directly or indirectly related parties, provided there is appropriate and relevant evidence. The documentation of transfer pricing on the basis of OECD transfer pricing guidelines (master file, local file, national report) must be prepared in accordance with the Austrian transfer pricing documentation law and submitted to the Austrian tax authorities. The size of the documentation required depends on a company`s turnover. In July 2018, the Hong Kong government amended the domestic income ordinance to comply with international transfer pricing standards developed under the OECD.

The main objectives of these amendments are the codification of the compensation principles (for example. B the principle of arm length), the implementation of certain measures under the BePS (Base Erosion and Profit Shifting) package and the alignment of existing provisions on international tax rules.