Transfer Pricing Documentation

How do we document Transfer Pricing

It outlines the nature of its global business operations, its overall transfer pricing policies, and its global allocation of income and economic activity in order to assist tax administrations in evaluating the presence of significant transfer pricing risk. The information required in the master file provides a “blueprint” of the MNE group and contains relevant information that can be grouped in five categories: a) the MNE group’s organisational structure; b) a description of the MNE’s business or businesses; c) the MNE’s intangibles; d) the MNE’s intercompany financial activities; and (e) the MNE’s financial and tax positions

 

  • A requirement under several countries’ transfer pricing documentation rules.
  • Even if the Masterfile is not a requirement, we would recommend preparing a Masterfile as it is provides an robust overview of the Group’s operations.  
  • Given the analysis that is undertaken in the preparation of the Masterfile, it can also provide the taxpayer with the required information on how the transaction should be structured.

The Local file provides sufficient details of the taxpayer’s business and the transactions with its related parties. Detailed information includes the business operations and specific related party transactions.

  • A requirement under several countries’ transfer pricing documentation rules.
  • Helps provide the necessary defence of the taxpayer’s transfer pricing practices in the case of a transfer pricing audit.