Transfer Pricing News for the Week of June 7, 20217th June 2021
Costa Rica Joins the OECD
Costa Rica is now the 38th member of the OECD, as of May 25, 2021. The initial accession process started in 2015 and required Costa Rica to change its laws and regulations to better align with OECD standards. The country was officially invited to join in May 2020, and now, the ink has finally dried. OECD Secretary-General Angel Gurría praised the country for its perseverance and is “impressed that the cross-party commitment to OECD accession that we witnessed during the accession process continued into the ratification phase, despite the pandemic.”
Argentina Extends Transfer Pricing Documentation Deadline and Issues COVID-19 Guidance
Argentina’s tax authority, the Administración Federal de Ingresos Públicos (AFIP), released a long-awaited guidance on preparing transfer pricing documentation for businesses impacted by the pandemic. It outlines how to conduct a successful functional analysis, where to source comparable information, the importance of determining new risks introduced by the pandemic, and how to illustrate government assistance. AFIP also announced that the transfer pricing documentation deadline has been extended by three months, for fiscal years with a December 31, 2020, through December 31, 2021, end date.
European Commission Plans to Tackle Shell Companies
The European Commission has revealed its latest area of focus: Shell companies. While the executive branch has cracked down on a host of tax avoidance systems, shell companies are still being utilized. The Commission’s plan of action includes enacting legislation around defining tax substance requirements and enforcing rules for EU member states. The Commission will be accepting comments until June 17. So, what you waiting for, multinationals?