The Tax Department has updated the Frequently Asked Questions and answers regarding the tax treatment of the Intra-group Transactions from 1/1/2022 with the addition of questions no.15-24.
The newly added questions with their answers are as follows:
15. When is the submission deadline of the Summary Information Table (SIT) for the year 2022?
The deadline for the submission of the 2022 SIT is 30 November 2024 at 23:59.
16. How can the Summary Information Table be submitted to the Tax Department?
The SIT shall be submitted electronically only through the taxpayer’s gate Tax FOR ALL (TFA).
17. What is the format of the SIT?
The format of the SIT can be viewed via the taxpayer’s gate Tax for All.
18. Should the sale of shares or other securities between related persons that fall under the definition of “titles” as per article 2 of the ITL and Circular 2008/13 be reported in the SIT and be considered for the purposes of assessing whether the applicable Local File threshold is exceeded?
No.
In this specific case only, such transactions shall NOT,
(a) be taken into account for the purposes of assessing whether the threshold of article 33(7) of the ITL has been exceeded or
(b) be reported in the SIT or
(c) be documented in the Local File / or satisfy the minimum TP documentation (if applicable).
For the treatment of Trade Receivables and Other Receivables arising from such transactions, please refer to Questions 19, 20 and 21.
19. Should balances of trading nature (i.e. Trade Receivables and Trade Payables) between related persons be reported in the SIT and be considered for the purposes of assessing whether the applicable Local File threshold is exceeded?
No.
Such balances should not be reported in the SIT provided that the terms of such Trade Receivables and Trade Payables between two related parties do NOT differ from those which would be made between two independent parties and as such they are not considered to be of financing nature.
Trade Receivable or Trade Payable balances of trading nature (but not of financing nature) shall NOT:
(a) be taken into account for the purposes of assessing whether the Local File threshold of article 33(7) of the ITL is exceeded or
(b) be reported in the SIT or be documented in the Local File / or meet the minimum TP documentation (if applicable).
20. Do Trade Receivable balances or Other Receivable balances (for example long outstanding balances) between related persons that are balances of financing nature (i.e. not of trading nature) must be reported in the SIT and be taken into account for the purposes of assessing whether the applicable Local File threshold is exceeded?
Yes.
Trade Receivable balances or Other Receivable balances of financing nature shall:
(a) be considered for the purposes of assessing whether the Local File threshold of article 33(7) of the ITL is exceeded and
(b) be reported in the SIT and be documented in the Local File / meet the minimum TP documentation (if applicable).
21. What amount needs to be reported in the SIT in relation to Trade Receivable or Other Receivable balances between related persons which are balances of financing nature?
The maximum balance during the reported year of such Trade Receivable or Other Receivable balances shall be included in the SIT for the purposes of assessing whether the applicable Local File threshold of article 33(7) of the ITL is exceeded.
22. Qualifying Owners, Qualifying Charterers and Qualifying Ship Managers as per sections 6, 18 and 28 of the Merchant Shipping (Fees and Taxing Provisions) Law 44(I)/2010, as amended, engage in Qualifying Shipping Activities which are subject to tonnage tax.
Should controlled transactions arising from a Qualifying Shipping Activity that is subject to tonnage tax be reported in the SIT and be taken into account for the purposes of assessing whether the applicable Local File threshold is exceeded?
No.
The taxable Income arising from a qualifying shipping activity between two related persons who are both subject to tonnage tax shall NOT
(a) be taken into account for the purposes of assessing whether the applicable Local File threshold of article 33(7) of the ITL is exceeded or
(b)be reported in the SIT or
(c)be documented in the Local File / meet the minimum TP documentation (if applicable).
23. Party A (Qualifying Owner, Qualifying Charterer and Qualifying Ship Manager as per sections 6, 18 and 28 of the Merchant Shipping (Fees and Taxing Provisions) Law 44(I)/2010, as amended) engages in a Qualifying Shipping Activity which is subject to tonnage tax.
Party B’s activities are subject to Income Tax.
Should controlled transactions arising from a Qualifying Shipping Activity between Party A and Party B (whose business income is subject to income) be reported in the SIT and be taken into account for the purposes of assessing whether the applicable Local File threshold is exceeded?
Only Party B’s income which is subject to Income Tax shall:
(a) be considered for the purposes of assessing whether the applicable Local File threshold of article 33(7) of the ITL is exceeded or
(b) be reported in the SIT or
(c) be documented in the Local File / meet the minimum TP documentation (if applicable).
24. Qualifying Owners, Qualifying Charterers and Qualifying Ship Managers as per sections 6, 18 and 28 of the Merchant Shipping (Fees and Taxing Provisions) Law 44(I)/2010, as amended, earn income from a Non-Qualifying Shipping Activity which is subject to Income tax.
Should controlled transactions arising from a Non-Qualifying Shipping Activity which is subject to Income tax be reported in the SIT and be taken into account for the purposes of assessing whether the applicable Local File threshold is exceeded?
Yes.
Any income generated from a controlled transaction in relation to a non-qualifying shipping activity by the Qualifying owners, Qualifying Charterers and Qualifying Ship managers as per the provisions of the Merchant Shipping Law 44(I)/2010, as amended shall:
(a) be taken into account for the purposes of assessing whether the applicable Local File threshold of article 33(7) of the ITL is exceeded and
(b) be reported in the SIT and
(c) be documented in the Local File / meet the minimum TP documentation (if applicable).
