Master file
The master file, which is a new requirement,
is meant to be a high-level overview of the
MNE, providing standardized details in five
key categories:
1) e legal entity’s organizational
Th
structure;
2) description of the group’s business
A
(the drivers of business profits, the
supply chain, a list of intra-group
services, and any restructurings);
3) ntangibles (the group’s strategy for
I
development, its list of agreements, and
its transfer pricing policies);
4) inancial activities (how the group is
F
financed and details of intra-group
financing); and
5) inancial and tax positions (including
F
tax rulings).
The primary purpose of the master file (along
with the CbyC report) is to provide information that will enable tax authorities to conduct
informed transfer pricing risk assessments.
It is to be filed with the tax authority of the
group’s parent company and then shared
among all tax authorities as is (not customized
for each one).
Because the master file will require the disclosure of information not typically included
in existing transfer pricing documentation, its
preparation will no doubt create challenges.
MNEs will need to make a concerted effort
to craft a complete, consistent, and coherent
story, and will have to plan ahead to determine
how best to prepare and present documentation to minimize the risk of misinterp ɕхѥ