Master and local file: preparing for the transfer pricing culture of compliance

Base erosion and profit shifting (BEPS) has already had a significant impact in raising awareness of international tax practices and the recommendations published in October 2015 are now making their way into rulebooks around the globe. 

 

Transfer pricing disclosure requirements are an important part of BEPS. Although country by country reporting (CbCR) has been the headline issue it is just one element of BEPS Action 13. The other changes could be just as far reaching. Using a master and local file approach to enhance and standardise transfer pricing documentation the OECD wants to foster a ‘culture of compliance’ amongst multinational enterprises (MNEs). This could have a significant impact upon MNE groups.