Page 59 - Central and Eastern European Transfer Pricing Review

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transfer of inventory. Other taxpayers not meeting the To satisfy the requirement and/or
set criteria for IFRS reporting have obtain the benefts, are there any
However, it is not required to disclose to prepare simplifed transfer
any details regarding individual pricing documentation that shows requirements on when the transfer
transactions in the annual tax return. pricing study must be prepared and
compliance with the arms length submitted?
What are the consequences principle in transactions with For relevant taxpayers the deadline
of failure to prepare or submit foreign-based related parties. for submitting transfer pricing
disclosures? The documentation must support the documentation is within 60 days of
The tax return is not complete and fulfllment of arms length principles the tax authorities request.
the tax authorities may ask for the in signifcant controlled transactions When a transfer pricing study is
completion of the respective information performed by the taxpayer. prepared, should its content follow
in the tax return after the tax return was Chapter V of the OECD Guidelines?
fled. Entities which do not perform
transactions with foreign related parties No. The content of the full scope transfer
are currently not required to maintain pricing documentation prepared by IFRS
Transfer pricing study transfer pricing documentation. reporters should correspond with the
overview requirements of the EU Code of Conduct
If the transfer pricing documentation
Is preparation of a transfer pricing was not provided to the tax authorities on Transfer Pricing Documentation,
i.e. it must include a master fle for the
study required i.e. can the based on their request within the set group of related parties and country
taxpayer be penalized for mere deadline of 60 days, the taxpayer could specifc documentation for the
failure to prepare a study? be penalized up to EUR3,000, also taxpayer. However, requirements of EU
Yes, for all transactions. The Ministry repeatedly. Code of Conduct on Transfer Pricing
of Finance of the Slovak Republic Documentation are similar to those
issued guidelines which specify Other than complying with a outlined in OECD Guidelines.
details regarding the content and the requirement per the previous
rules for preparing and maintaining question, describe the benefts, if Simplifed transfer pricing documentation
documentation of the transfer pricing any, of preparing and maintaining must contain the following major
method applied by the taxpayer to a transfer pricing study? elements:
transactions with its foreign-based Preparation of a transfer pricing list of transactions with related
related parties. study, including benchmarking, is
recommended even for taxpayers who parties, and their nature
According to the guidelines, entities are not obliged to maintain one (i.e. for description of major transactions,
which are obliged to prepare fnancial those entities which do not maintain their volume or percentage from the
statements under IFRS according to accounting records under IFRS). If the tax overall volume of transactions
Slovak Accounting Act (IFRS reporters) authorities were to challenge the prices
are required to keep full scope transfer applied in related party transactions, the information on the volume of
pricing documentation for the respective taxpayer would be required to support incomplete/in-process transactions
tax period. It must include a master fle compliance with the arms length information on prices of completed
and a country fle including a transfer principle. Existence of a transfer pricing transactions between the taxpayer
pricing study, i.e. internal and external study may help shift the burden of proof and the related parties.
comparables on transactions conducted to the tax authorities.
between independent parties, a
comparability analysis, functional
analysis, etc.

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