The OECD public consultation on the Discussion Drafts on

Report
OECD public consultation on Transfer Pricing Documentation
and Country-by-Country Reporting
OECD Conference Centre, Paris
19 May 2014
Other Discussion Draft Topics
Effective dates of the guidance / implementation
Laurence Delorme
Background
Introductory comments to BEPS Action Plan: “The actions implemented to counter BEPS cannot succeed without
further transparency, nor without certainty and predictability for business.”
BEPS
Action 13
Develop rules regarding TP documentation
to enhance transparency for tax
administrations, taking into consideration
the compliance costs for business.
The rules to be developed will include a
requirement that MNE’s provide all relevant
governments with needed information on their
global allocation of income, economic activity and
taxes paid among countries according to a
common template
30 January 2014 DD on TP documentation & CbC R (+ webcast 2 April 2014)
Proposed
Tools
REVISED CHAPTER V OF OECD TPG
Two-tiered TP documentation framework:
Masterfile + Local File
Stated
Purpose
• Guidance for tax administrations to take
into account in developing rules and/or
procedures on TP documentation (TP risk
assessment, TP enquiries and audits)
• Guidance to assist taxpayers in identifying
documentation most helpful in establishing
compliance with ALP
COUNTRY-BY-COUNTRY REPORTING TEMPLATE
HIGH LEVEL TP RISK ASSESSMENT (“TPRA”) TOOL
FOR TAX ADMINISTRATIONS
On-going OECD work on TP Risk Assessment (Draft Handbook 30 April 2013), and work with and through the FTA
on Co-operative compliance (May 2013)
19 May 2014
A3F Association Française des Femmes Fiscalistes
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BEPS Action 13: Enhance transparency / simplify compliance & reduce costs
Effective dates: critical success factors for business
Country-by-Country Reporting Template
HIGH LEVEL TP RISK ASSESSMENT TOOL
Revised Chap. V of OECD TPG
Two-tiered TPD framework
(Masterfile & Local File)
Effective TP Risk Assessment (“TPRA”) and auditing without increased burden on business requires
finalizing the risk assessment approach (Handbook on TP Risk Assessment) before finalizing the tools
under BEPS action 13.
Need for mechanism through which TPD compliance burden is reduced for taxpayer identified as low
risk after TPRA performed by tax authorities
CbCR template to be finalized after all other
BEPS actions are completed, i.e. not before Sept
2015, and need to provide ample time for
business to make the necessary changes (systems,
reporting standards, operations, etc) to comply.
Common, standard OECD framework for TPD
must be consistently enacted and applied across
jurisdictions => consensus necessary across OECD
MS & G20 countries before revised Chap. V is
published
New TPD and CbCR not to be adopted without/before a formal and binding commitment from all
countries involved in the BEPS-work to provide timely and binding dispute resolution mechanisms
which will fully safeguard taxpayers from double taxation (BEPS action 14 Changes to the Model Tax
Convention and action 15 Develop a multilateral instrument - deadlines Sept 2015 )
Stability over time of CbCR template, and of TPD framework under revised Chapter V OECD TPG
BEPS project provides political backing for requiring countries to adopt in their national rules or
through a multilateral instrument one global, consistent and streamlined standard
19 May 2014
A3F Association Française des Femmes Fiscalistes
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Proposed timeframe for date of effect (first year being documented)
Phased roll-out of the new guidance, beginning with the CbC Report
Date of effect = first year
being documented
Year N
Year N+1
Year N+2
CbCR template
Masterfile
Local Files
• CbCR template and rules surrounding TPD must be uniform across countries
=> single commencement date for all countries adopting the requirements ,
and only after all, or a certain number, of the BEPS countries have agreed to
the revised documentation and reporting standards
=> OECD to provide clear guidance to tax administrations that they should
NOT add to the information required under CbCR, Masterfile or Local File
1 to 2 years to
come into full
compliance, before
authorities may
apply penalties.
• OECD Revised Chap V should outline timeline for implementation of new
TPD standard framework, providing taxpayers sufficient time to make the
necessary changes to comply.
=> transition rules as taxpayers move from one standard to the other
(grandfathering)
=> optional faster implementation where business is ready
19 May 2014
A3F Association Française des Femmes Fiscalistes
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