The “Platform for Collaboration on Tax,” a joint initiative of the IMF, OECD, UN, and World Bank Group today released a toolkit aimed at helping developing countries establish an effective transfer pricing documentation system.
The toolkit addresses the master file, local file, and country-by-country report in detail.
It also discusses other approaches to transfer pricing documentation, such as requiring information to be submitted with a tax return on a transfer pricing schedule, and other measures, such as questionnaires.
Noting that no single approach to transfer pricing documentation has been universally adopted, the toolkit describes the different practices adopted in different countries.
Included also is a discussion of the regulatory framework for transfer pricing documentation and sample legislation. The issue of keeping taxpayers’ documentation confidential is discussed, as are timing issues concerning when documentation must be in place and when it is required to be submitted to the tax administration. Also covered are enforcement, problems with accessing information located outside the jurisdiction, and and simplification and exemptions.
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