Track the countries where national legislation requires you to prepare transfer pricing documentation, such as: (i) a Country-by-Country (CbC) Report; (ii) a Master File (MF); (iii) a Local File (LF); (iv) pre-BEPS transfer pricing documentation; and (v) a transfer pricing report and/or form. IBFD’s new Transfer Pricing Documentation Tables give you a comprehensive overview of transfer pricing documentation requirements and forms in over 60 countries. The tables link to legislation, detailed guidance, recommendations and pitfalls with respect to transfer pricing documentation. Side-by-side views of similarities and differences in requirements for the countries of your interest can be exported to Excel.
Relevance for transfer pricing specialists today
In the BEPS Action Plan, the OECD has adopted a three-tiered approach to documentation, which includes a (i) CbC Report; (ii) Master File; and (iii) Local File, providing a global financial picture of a multinational enterprise (MNE). Some countries fully implemented this approach, while others partly implemented it and partly rely on the pre-BEPS documentation rules and/or transfer pricing form or return. For MNEs, it is becoming increasingly difficult to keep track of all the transfer pricing documentation requirements, forms, deadlines and penalties in different countries.
What are the costs of getting it wrong? Given the efforts being taken by various international organizations, legislators and tax authorities, it is more important than ever for multinational corporations to have excellent transfer pricing documentation in place. Businesses need to relay current and accurate data that matches their business activities and operating model and aligns with the tax profile presented to the authorities and the public. Penalties are imposed for neglecting to file transfer pricing documentation, or filing late or incorrectly. Non-compliance may also trigger a transfer pricing audit carrying the potential risk of a transfer pricing adjustment.
The Transfer Pricing Documentation Tables will give you a regular status update on the OECD and non-OECD member countries that have either implemented or still intend to draft legislation with respect to CbC Reports, Master Files and Local Files. The tables also provide you with an overview of the pre-BEPS documentation rules and/or whether a transfer pricing form or return needs to be filed. You will be able to access information on the extent to which provisions deviate per country in relation to, for example, the (i) turnover thresholds; (ii) content requirements; (iii) filing dates; and (iv) penalties for not filing, or late or incorrect filing of the CbC Report, Master File, Local File, pre-BEPS documentation and transfer pricing form or return. There may also be differences in regard to which accounting standards and/or accounts should be used when drafting a CbC Report and how countries will exchange the CbC Reports with other tax authorities. All these aspects and more detailed information are covered in the TP Documentation Tables.
Content of the new Transfer Pricing Documentation Tables and related information
However, a way out of this maze of transfer pricing documentation requirements is available. The Transfer Pricing Documentation Tables and the underlying new chapter content provide guidance on the local rules and legislation. In addition, it includes practical experience, pitfalls and golden rules for undertaking compliance with the various documentation requirements, where available.
Questions answered in the new tables, for example, are:
- Whether legislation relating to the CbC reporting, Master File and Local File was introduced
- Whether specifications are provided on the information/details to be included in the CbC Report, Master File and Local File
- Whether the CbC Report, Master File and Local File are based on the OECD template or whether there are deviations or additions
- What taxpayers need to file, thresholds per file, procedures for filing and deadlines
- What penalties apply for late, incomplete or incorrect filing
- The type of underlying information and reporting standards to be used
- Differences in periods for reporting in various countries and resulting mismatching of local reports, etc.
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