The Tax Hub

On 15 December 2015, the National Assembly adopted the Finance Law 2017. The law contains a number of important amendments including, in particular, the following:

Definition of Permanent Establishment

The law introduces a definition of permanent establishment under domestic law. The definition closely follows Art.5 of the UN Model.

Limitation of Deductibility of Headquarter Charges

Headquarter charges may be deducted up to a maximum of 10% of the taxable income of the payer before the deduction of the charges. In case taxable income for the year is negative, the 10% limit is calculated by reference to the most recent profitable tax year not yet covered by the statute of limitations. In case there is no such profitable reference tax year, the deduction is definitively forfeited.

Introduction of a "Sixth" Transfer Pricing Method

The law introduces the concept of "sixth" transfer pricing method. Under the method, the price charged for commodities and natural resources quoted on an exchange may not be lower than the quotation price on the day sales are made.