On 13 October 2014, Iceland's Ministry of Finance published draft transfer pricing documentation requirements. Iceland's current transfer pricing rules became effective from 1 January 2014 and apply to transactions with both resident and non-resident related parties, but did not contain specific rules for documentation.
Under the proposed documentation requirements, taxpayers must prepare the following by the deadline of the annual tax return:
The transfer pricing documentation need not be submitted unless requested by the tax authorities. However, taxpayers should file an information return on transactions with related parties and provide confirmation that the documentation requirements have been complied with when filing their annual tax return.
A request for transfer pricing documentation may be made by the tax authorities for a particular tax year from the date of the return filing deadline. The documentation should be submitted within 45 days of a request. A benchmark study may also be required at the request of the tax authorities.
Final transfer pricing documentation requirements regulations are expected later this year.
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