Transfer pricing services in Belarus A wind of change Transfer pricing services
Contents 3 Meeting your needs 4 Transfer pricing regulations in Belarus 5 How we can help 6 Transfer pricing documentation preparation cycle 7 The Deloitte difference 8 Contacs 2
Meeting your needs The Taxes and Duties Ministry of the Republic of Belarus recently has been developing and implementing transfer pricing rules. These efforts indicate that the state is deeply concerned about protecting its interests and is determined to close loopholes that might be used to minimise tax burdens. Both Belarussian companies and multinationals are operating in an environment of unprecedented complexity coupled with economic difficulties. The increasing volume and diversity of intercompany transactions combined with stringent documentation requirements suggest that transfer pricing has become the major international tax issue that global business faces today. At this stage, transfer pricing is one of the top priority issues for the Belarus tax authorities. This raises many questions on the part of both taxpayers and tax advisors. Robust and efficient compliance practices are essential in helping to deal with scrutiny by the tax authorities. Properly prepared transfer pricing documentation is the first line of defence for multinational companies in the event of transfer pricing audits, adjustments resulting in double taxation and potential penalties. Choosing the right approach to managing both local and global transfer pricing compliance means gaining efficiency and consistency without increasing the risk of a transfer pricing audit. Transfer pricing services 3
Controlled transactions in Belarus Effective 1 January 2016, the transactions specified below are subject to transfer pricing control in Belarus. Real estate transactions Transactions that involve the sale or purchase of real estate, including transactions with housing bonds, are subject to transfer pricing control if the transaction price differs from the arm s length price by at least 20 percent. Cross-border transactions Transactions with related non-residents, if the transaction amount exceeds BYR 1 billion Transactions with non-residents registered in low tax jurisdictions, if the transaction amount exceeds BYR 1 billion. The list of low tax jurisdictions is published by the Belarus Presidential Administration Transactions with related non-residents or non-residents registered in low tax jurisdictions with the involvement of independent intermediaries with no substantial functions, if the transaction exceeds BYR 1 billion Transactions within Belarus Domestic transactions are regarded as controlled if performed with a related party that has the right to corporate income tax exemption inasmuch as such party: (1) Falls under certain categories of taxpayers not subject to corporate income tax (2) Applies specific taxation regimes (for example, the unified tax system) (3) Operates in territories specified by the legislation (free economic zones, High Technology Park, etc.) If such transactions involve independent intermediaries with no substantial functions, they are also deemed controlled. The threshold for domestic transactions is BYR 1 billion. Transactions involving strategic goods, if the transaction amount exceeds BYR 10 billion. The list of goods will be published by the Council of Ministers of the Republic of Belarus Transactions of large taxpayers, if the transaction amount exceeds BYR 10 billion. The list of large taxpayers is published by the Belarus Tax and Duties Ministry 4
How we can help As part of the Deloitte global network, we are the right firm to work with you on building up your transfer pricing compliance process and delivering integrated, efficient, and value-driven local and global transfer pricing services. This capability is complemented by in-depth knowledge of local specifics (market, legislation) and compliance requirements, including country-specific rules of documentation and benchmarking studies. Our services The Deloitte Belarus transfer pricing practice offers a wide range of services from the preparation of documentation to the development of tailor-made solutions for specific transfer pricing issues: Transfer pricing documentation preparation Global master file localisation (adapting to local specifics) Transfer pricing planning Deloitte Belarus, with its multidisciplinary engagement Transfer pricing consulting team composed of transfer pricing professionals with Transfer pricing risk analysis backgrounds in economics, accounting and international Analysis of the transfer pricing implications of using tax, provides a wide range of transfer pricing services. specific business structures Audit defence support Legal advisory services Transfer pricing services 5
Transfer pricing documentation preparation cycle An effective system for transfer price formation and documentation is based on four essential elements that are closely related. Diagnostics Identification of related parties Identification of controlled transactions Transaction analysis and classification by the materiality of potential tax consequences Identification of risks associated with each individual transaction Preparation of priority analysis matrix (if applicable) Strategy development Identification of the most material transactions Documentation type selection Further strategy development Documentation preparation cycle Implementation Policy integration into a unified corporate planning system Monitoring the process of adjusting a company structure to new legislation Development of pricing techniques, processes, guidelines and policies Staff training Appropriate adjustments of the structure, policies and/or transfer prices on a regular basis Preparation of rationale Functional analysis Risk analysis Collection of additional information Benchmarking study Identification of additional solutions to reduce the number of controlled transactions Preparation of documentation 6
The Deloitte difference Deloitte s transfer pricing professionals apply in-depth knowledge and experience to help you develop the transfer pricing documentation to address the ever-changing global transfer pricing compliance requirements. We understand what the tax authorities are looking for, and possess the experience and tools necessary for preparing consistent and accurate transfer pricing documentation in a timely manner. Deloitte s multi-disciplinary team embodies local and global experience and knowledge in delivering transfer pricing services. We are: Part of the Deloitte global network of firms. We have access to transfer pricing specialists in more than 60 countries, including tax professionals, accountants and economists. Our diverse experience and knowledge of local issues can be of real benefit in making sound documentation decisions. As part of the wider global network, our people communicate and collaborate closely, allowing us to deliver services to you in a well-coordinated and integrated way. Highly experienced. Many of our transfer pricing specialists are former government tax officials or practitioners. Not only do we understand the stated documentation requirements, but also the types of issues that the tax authorities are likely to focus on in their examinations. Widely recognized. Deloitte is a leader in rendering transfer pricing consulting services according to the World Transfer Pricing Guide, which is published by the International Tax Review, and nominations in the annual European Tax Awards. Our practice has gained a positive reputation for its well-known subject matter specialists who provide assistance in planning the transfer pricing strategy and preparing the appropriate documentation. Technologically advanced. Our team has access to various databases of comparable financial and business information on companies all over the world, as well as to proprietary license agreement databases and banking sector data. Competitively priced. We offer attractive fees for our transfer pricing services. Transfer pricing services 7
Contacts Alexander Cherinko Director +380 44 490 90 00 acherinko@deloitte.ua Yevgeniy Ratmanskyy Senior Manager +380 44 490 90 00 yratmanskyy@deloitte.ua 13th floor, 51 A, K Tsetkin St. Minsk, 220004, Republic of Belarus Tel: +375 (17) 309 99 00 Fax: +375 (17) 309 99 01 www.deloitte.by deloitte.by About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. Please see http://www2.deloitte.com/by/en/pages/about-deloitte/articles/about-deloitte.html for a detailed description of the legal structure of Deloitte, Belarus. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte s more than 225,000 professionals are committed to becoming the standard of excellence. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network ) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. 2016 Foreign Unitary Enterprise Deloitte & Touche. All rights reserved.