The COVID-19 outbreak at the beginning of 2020 has caused an unprecedented worldwide crisis, first in healthcare, later in the economy. On the subject of the economy, although there has been much discussion about the various ways and times that the impatiently awaited recovery will occur, there are no signs of it happening in the short term, and the pandemic’s effects on the economy are likely to be felt for a long time. That also has an impact on transfer pricing, and will have (and is actually already having) important consequences on how controlled transactions are carried out within multinational groups, on how prices are determined in those transactions, and on how these issues must be addressed with the tax authorities.
The Brazilian Transfer Pricing (TP) rules, imposed on imports and exports of goods, services and rights carried out between related parties, were enacted back in 1996, based on a controversial and simplistic “arm’s length” methodology involving fixed profit margins and flexibility for taxpayers to choose the most appropriate calculation method for the parameter price. These rules have not been subject to major updates since then and have somehow deviated throughout the years from the TP Guidelines introduced by the Organization for Economic Cooperation and Development (OECD).
The Energy Regulatory Commission published this Monday in the Federal Official Gazette the "Agreement by which all deadlines and legal terms that were suspended as a measure to prevent and combat the spread of the coronavirus COVID-19 by means of resolutions No. A/010/2020, A/014/2020, A/015/2020 and A/018/202, are resumed.
It has been published in the official website of the Portuguese Tax Authority, the new postponement of the deadline to comply with the obligation to prepare and submit the transfer pricing file, to which large taxpayers are subject, under article 130, no. 3, of the Corporate Income Tax (“IRC”) Code, to September 15th, 2020 (in line with the postponement of the submission of the IES/DA).
The Government approved some legislative changes regarding SAF-T (PT) accounting file and reporting obligation on the establishments where invoices are issued through Decree-Law no. 48/2020, of 28 August. We highlight below the principal measures.
In order to mitigate the effects of the Covid-19 pandemic, the Portuguese Government approved, by Law no. 29/2020 of 31 July, three more fiscal measures to support micro, small and medium-sized enterprises
IRC periodic return (Model 22) can be submitted and corresponding tax can be paid until today, without any penalty, as decided by the Portuguese Government, by Order 296/2020XXII, given the constraints presented by companies and accountants in the context of the pandemic Covid-19.
We outline below the exceptional measures that have successively been adopted to mitigate the effects of the Covid-19 pandemic in Portugal on payments on account and additional payments on account.
We recall that this obligation has been implemented by the SIMPLEX+ Programme in article 34 of Decree-Law no. 28/2019, of 15 February. Initially this obligation had to be fulfilled until 30/06/2019, later extended to 30/06/2020 by Order no. 4/2019-XXII-SEAF, of October 30.
