Changes of 17 June 2013 introduced to the Minister of Finance Decree on transfer pricing – part 2: Choice of method

One of the main changes in the Decree is the choice of the method used to evaluate the income of the taxpayer.
Still the tax administration has the obligation to apply the method chosen by the tax payer, but what is new is that the tax administration (when choosing he method) must take into account:
• the functions performed in the transactions, including risks, assets and human capital,
• data available to apply the method,
• comparability of the transactions or of the taxpayers.

Additionally a new hierarchy of methods is introduced. The Comparable Price Method is less favoured, whereas the profit methods are more recognised. More details on this we shall provide you in next part, next week.