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BEPS Action 13: TP Documentation and CbC Reporting
Erki Uustalu
Tax Counsel,
Eesti Energia AS (Enefit)
Madrid, 4 May 2015
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Timeline
- 16 September 2014: Guidance on Transfer Pricing Documentation and Country-by-Country Reporting- Revised chapter of the OECD Transfer Pricing Guidelines, which sets forth a three-
tier approach to transfer pricing documentation
- 6 February 2015: Guidance on the Implementation of Transfer Pricing Documentation and Country-by-Country Reporting- Timing and filing of CbC reports; groups required to file CbC reports; conditions for
obtaining and use of CbC reports; framework for government-to-government exchange of reports
- April 2015: Comprehensive implementation package for government-to-government exchange of CbC reports- Addressing key elements of domestic legislation and secondary mechanisms
- 2020 Review of implementation
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Why and what?
• To ensure that taxpayers give appropriate consideration to transfer pricing and in reporting the income derived from related-party transactions in their tax returns
• To provide tax administrations with the information necessary to conduct an informed transfer pricing risk assessment
• To provide tax administrations with useful information for purpose of thorough audit of transfer pricing practices
Master fileHigh-level overview of the MNE group business
Local fileDetailed information on specific group transactions
CbC ReportAggregate, jurisdiction-wide information of prescribed indicators
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Who and when?
CbC report by all MNE groups with the revenue of EUR 750 million or more
No exceptions: No special industry exemptions, no exemptions for investment funds, non-corporate entities, non-public corporate
entities
For fiscal years beginning on or after 1 January 2016. Not later than 12 months after the close of the relevant fiscal year of the MNE group.
- „fiscal year“ refers to the consolidated reporting period for financial statement purposes
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Whom?
CbC report filed to the country of the ultimate parent, who automatically shares the information with the jurisdictions where MNE operates
Obligation moving to the next-tier parent (secondary mechanism) if:- Ultimate parent does not require CbC reporting- Competent authority agreements not concluded in time- Established failure to exchange the information in practice
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How?
Confidentiality
Protections of confidentiality to an extent at least equivalent to the protections applicable if information were delivered under Multilateral onvention on Mutual Administrative Assistance, TIEA or tax treaty that meets internationally agreed standards
Consistency
Same standard template in all jurisdictions. No less no more
Appropriate use
Used for high-level transfer pricing risk assessment purposes and does not substitute detailed transfer pricing analysis
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