AMENDMENTS TO THE TRANSFER PRICING MANUAL
On 5th October, 2021 was published the Amended Rulebook on Transfer Pricing and the Methods Used to Determine „Arm’s Length“ Prices Charged Between Associated Entities (hereinafter the Transfer Pricing Manual). The Transfer Pricing Manual came into effect on the eighth day after its publication in the „Official Gazette of the Republic of Serbia“ issue 95/2021, which fell on 13th October 2021.
The major change to the Transfer Pricing Manual involves the definition of the requirements of the CbC report. The need to regulate the CbC report in a by-law was set out in the Corporate Income Tax Amendment Act dated December 2020.
THE ULTIMATE MOTHER COMPANY AND MEMBERS OF A GROUP
The ultimate mother company which qualifies as a tax resident shall submit an annual report to the relevant tax authorities with the following data:
1) aggregate information on the amount of revenue, profit and/or loss before taxation, calculated and paid tax on corporate income, registered capital, retained earnings, number of employees and tangible assets other than cash or cash equivalents for any tax jurisdiction in which the international group is operating;
2) identification of every member within an international group, including the country in which such member is a tax resident in line with the rules in place in that country (of residence), as well as the country in which such legal entity has been founded, if the country of incorporation differs from the country of residence, as well as the data on the predominant trade(s) of the member of the international group.
A member of an international group is:
- any separate legal entity within an international group that is included in the consolidated financial statements of the international group, or would be included in such a report if it were a publicly traded entity on a regulated market in the Republic of Serbia or elsewhere;
- any separate legal entity within an international group that is excluded from the consolidated financial statements of the international group based solely on the size or materiality criteria;
- any permanent establishment of a member of an international group which is obliged to prepare separate financial statements in compliance with the accounting or tax regulations of the tax jurisdiction to which it belongs, or in conformity with the general acts of the international group.
The ultimate mother company shall present the data on its permanent establishment in line with Paragraph 1 of this Article for the tax jurisdiction in which that fixed place of business is located, irrespective of the tax jurisdiction of the member of the international group of which it is a part.
If a member of an international group is a tax resident in more than one country or tax jurisdiction, the tax residency of that member shall for the purpose of the annual report be determined on the basis of bilateral tax treaties between those countries.
CONTENTS OF THE CBS REPORT
A CbC report must include the following information:
1) Table 1 – overview of the distribution of income, taxes and business activities of members of an international group in their respective tax jurisdictions;
2) Table 2 – list of all members of an international group, classified according to their tax jurisdiction;
3) Table 3 – additional information.
The report will only be accepted in paper form.
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Tel: +381 11 4252 150
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Email: office@profitplus.rs
Website: www.profitplus.rs
