OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS

 
 
OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
OECD Master File concept and CbC Reporting –
Status:
1.4.2019   international documentation requirements
OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
Status:
           OECD Master File concept and CbC Reporting –
1.4.2019   international documentation requirements




      2
OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
Preamble
 Dear Reader,
     In the light of the rising pressure from the public and the G20, among other factors,
     the OECD has set itself an objective to combat tax planning arrangements that are
     solely aimed at tax evasion and profit shifting (Base Erosion and Profit Shifting –
     BEPS). Therefore, in April 2013, the OECD published an action plan which provided
     for 15 actions outlining which measures should be developed and implemented to
     eliminate aggressive tax planning practices.

     Four of these actions relate directly to transfer pricing. After the Action 13 Final
     Report („transfer pricing documentation and Country-by-Country Reporting“)
     was released by the OECD in 2015, a three-tiered transfer pricing documentation
     approach consisting of the Master File, Local File and Country-by-Country-
     Reporting has been included in the new OECD TP Guidelines dated July 2017.

     As regards national implementation, Action 13 may well be considered as the BEPS
     measure for which States have so far adopted the most extensive legislation. Many
     legislators have decided whether to adopt the OECD proposal either in full or at
     least in part, or whether to fully reject the new concept.

     The necessary framework conditions have been largely created for the automatic
     exchange of Country-by-Country (CbC) reports. Thus, as of 24th January 2019,
     already 77 countries signed the „Multilateral Competent Authority Agreement on
     the Exchange of Country-by-Country Reports“ (CbC MCAA) developed to implement
     the international mechanism of the automatic exchange of the CbC Reports.

     The consistent and efficient implementation of the three-tiered documentation
     approach is considered to be of utmost importance not only by the OECD.
     Harmonised documentation regulations help corporate groups reduce also the
     compliance costs. Although the elements of the Master File, Local File and CbC
     Reporting were developed in a joint effort of many countries, the initial euphoria
     over the anticipated introduction of an internationally harmonised concept has
     meanwhile faded over signs of a heterogeneous implementation. In addition to still
     existing certain formal differences regarding the documentation, there are also
     content-related differences and differences with respect to the local preparation,
     notification and submission deadlines.




 3
OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
An implementation of a documentation concept in corporate groups which
    would be fully compliant with BEPS is therefore possible only to a limited
    extent. The knowledge of the respective national implementation status
    is an essential compliance task for the transfer pricing management
    team, especially in order to avoid formal errors and thus the possibility of
    questioning the usability of the documentation.

    It is hardly surprising that the process of determining individual reporting
    obligations binding on internationally operating groups will itself take a
    lot of effort and give rise to uncertainty. The aim of this publication on
    58 countries is to offer you initial guidance. Although this does not allow
    making any conclusive statements about the individual documentation
    obligations of your company, we believe that it will offer you a helpful
    initial overview.

    Yours faithfully




    Michael Scharf




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OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
Contents
     BEPS Action 13                           7
     Service Portfolio                       9
     Your added value                        10
     BEPS Action 13 state of implementation
     in selected countries                   12
     Implementation BEPS Action 13           13
     Argentina                                13
     Australia                                14
     Austria                                  15
     Belarus                                  16
     Belgium                                  17
     Brazil                                   18
     Bulgaria                                 19
     Cambodia20
     China21
     Croatia                                 22
     Cyprus                                  23
     Czech Republic                          24
     Denmark                                 25
     Egypt                                   26
     Estonia                                  27
     Finland28
     France                                  29
     Georgia                                 30
     Germany31
     Hong Kong                               32
     Hungary33
     India                                   34
     Indonesia                               35
     Ireland                                 36
     Israel                                   37
     Italy                                   38
     Japan                                   39
     Kazakhstan                              40



 5
OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
Kenya 	                                    41
    Latvia42
    Liechtenstein                             43
    Lithuania                                 44
    Malaysia45
    Mauritius                                 46
    Mexico                                    47
    Moldova                                    48
    Netherlands49
    Nigeria50
    Philippines51
    Poland52
    Portugal53
    Romania54
    Russia55
    Serbia                                    56
    Singapore                                 57
    Slovakia                                  58
    South Africa                              59
    Spain                                     60
    Sweden                                     61
    Switzerland                               62
    Thailand                                  63
    Tunisia                                   64
    Turkey                                    65
    Ukraine                                   66
    United Arab Emirates                      67
    United Kingdom                            68
    USA                                       69
    Vietnam                                   70


    Country-by-Country-Reporting              71
    Notification to the tax administration     71
    Countries that signed the MCAA on CbCR     74


    Rödl & Partner                            75
    About us                                   75
    Rödl & Partner worldwide                  76
    Contact                                    77



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OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
BEPS Action 13
Transfer pricing documentation and Country-
by-Country Reporting
         Following the points of action developed in the context of the BEPS project
         against Base Erosion and Profit Shifting of multinational enterprises, countries
         shall implement these actions via changes in domestic law and practices and via
         treaty provisions in order to protect their respective national tax bases. The BEPS
         Action Point 13 („2015 Final Report – transfer pricing documentation and Country-
         by-Country Reporting“) provides guidance for tax administrations to improve
         transparency by developing rules and procedures on sufficient documentation
         in connection with risk assessment and transfer pricing inquiry. The proposed
         standardized three-tiered approach to transfer pricing documentation for
         Multinational Enterprise (MNE) groups has replaced the former Chapter 5 of the
         OECD Transfer Pricing Guidelines in July 2017 and should consist of the following:
         (i) a Master File, (ii) a Local File, and (iii) Country-by-Country Reporting (CbCR).




                                     three-tiered approach



               Master File                CbC Reporting                   Local File
               („high-level              („high-level risk              („specific IC
                overview“)                assessment“)                 transactions“)



                                                                      transfer pricing
                          Risk assessment                                 analysis


         The Master File contains standardized information relevant for all MNE group
         members and should provide a general overview of the MNE group business,
         placing the MNE group‘s pricing practices in their global economic, legal, financial
         and tax contexts. Compared to already existing Master File concepts or that existed
         previously, the chapters on intangible assets and financing in particular are new.
         In contrast to the Master File the Local File provides more detailed information
         relating to specific intercompany transactions for the respective domestic taxpayer
         to which the Local File applies.
                     The third component of the three-tiered approach is CbC Reporting
         which is generally compiled only by MNE groups with annual consolidated group
         revenue equal to or exceeding EUR 750 million. CbC Reporting requires aggregate
         tax jurisdiction-wide information related to the global allocation of income, taxes
         paid, and certain indicators of the location of economic activity among the tax
         jurisdictions in which the MNE group operates. The Master File and CbC Reporting
         will be helpful for risk assessment purposes. However, the Local File comprises
         information relevant to a detailed transfer pricing analysis for the relevant taxing
         authority for each country in which the MNE group is situated.




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OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
DATE?                          DATE?                                                                                 DATE?
      LOCAL FILE                     MASTER FILE                                                                           –– Duty
                                                                                                                                of documentation for all FY
      E.g. with annual tax           Update (if necessary)               Ultimate parent                                      following 1 January 2016
                                                                                                          CbC
      declaration                    with the annual tax                     company                                       –– Usually declaration within 12 months
                                                                                                        Reporting
                                     declaration                                                                              after the lastday of the Reporting
                                                                                                                              Fiscal Year of the MNE group

                                                                           Master File

                                                                            Local File               Tax administration
                                                                                                                   Automatic Information exchange


      Constituent Entity                                               Constituent Entity                                   Constituent Entity

          Master File                                                      Master File                                         Master File

           Local File            Tax administration                         Local File               Tax administration         Local File          Tax administration


The anticipated flow of information between the members of a MNE group and the taxing authorities.



                                      In practice, the ultimate parent company is required to prepare the
                         Master File and will share it with the constituent entities in order to comply with the
                         documentation requirements. The ultimate parent company has access to all essential
                         tax information. Depending on the existing intercompany transactions, the individual
                         country specific Local Files can be filed centrally by the ultimate parent company or
                         can be independently filed by the local companies. The more interlinked and versatile
                         the intercompany transactions between the individual associated enterprises are, the
                         less the centralization of information filing will be feasible. In general, each ultimate
                         parent company of a MNE group is obligated to file a CbC Report in the country where
                         it is resident for tax purposes. The OECD concept includes an annual exchange of
                         information received from the reporting entities that is a resident for tax purposes
                         in its jurisdiction with all other competent authorities of jurisdictions with respect to
                         which it has an agreement in effect, and in which, on the basis of the information in
                         the CbC Report, one or more constituent entities of the MNE group of the reporting
                         entity are either a resident for tax purposes, or are subject to tax with respect to the
                         business carried out through a permanent establishment.

                                   Many countries have already implemented or made initial arrangements
                         to implement BEPS Action Point 13 in domestic law. An implementation will provide
                         taxing authorities with useful information to assess transfer pricing risks and make
                         determinations about where audit resources can most effectively be deployed.
                         Taxpayers are encouraged to articulate convincing, consistent and cogent transfer
                         pricing positions in order to be positioned to face what will inevitably be a more
                         thorough risk assessment and audit process by their respective taxing authorities.




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OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
Service Portfolio
      Rödl & Partner’s transfer pricing service line supports its international clients
      worldwide in the individual structuring, documentation and defence of cross-border
      business relationships within the group of companies. We work together, closely
      interlinked across all service lines. We think from a market perspective, where a tax
      team possesses all the capabilities to be successful and to realise the client’s goals.

      Rödl & Partner has many years of experience in supporting multinational enterprise
      groups in the area of transfer pricing. Together with our colleagues in over 50
      countries, we can advise you in the following areas, also based on cross-border
      collaboration, if required:




       Health Check                    Digital             Documentation                CbCR
                                      Solutions




       –– IC Maturity Check                                –– Master File         –– Data generation
       –– Optimisation            –– Transaction matrix   –– Local Files         –– Data preparation
         potential                 –– Segmentation         –– Global             –– Report generation
       –– Tax risk assessment      –– TP Controlling         coordination         –– Conversion to XML
       –– System design            –– Simulation                                    format
       –– Interface design         –– ERP-Integration                             –– Transfer
                                   –– BI / Analytics                              –– CbCR risk analysis
                                   –– Digital agenda




        Arm‘s length               Operational TP            Defence TP               Legal TP
        comparison




       –– Selection of the type   –– SWOT analysis        –– Tax audit           –– Procedural law
         and scope of arm‘s        –– Process recording    –– Joint Audit         –– Duties to cooperate
         length transactions       –– Roadmap to          –– Mutual agreement   –– Reporting
       –– Benchmarking               excellence              procedure              requirements
       –– Rating                   –– Best Practice       –– APA                 –– Burden of proof
       –– Valuation                  Workshops             –– Objection          –– Usability
       –– Adjustment              –– Coaching               procedure            –– Access rights
         calculations                                      –– Lawsuit               concerning tax
                                                                                    audit
                                                                                  –– Data protection




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OECD MASTER FILE CONCEPT AND CBC REPORTING - INTERNATIONAL DOCUMENTATION REQUIREMENTS
Your added value
      Rödl & Partner offers you an approach that
      can be briefly summarised as follows:
      ––   “One Face To The Client” approach – you have ONE contact person
      ––   Professional assistance for German companies with foreign engagements
      ––   Central project management: Our structure – international, interdisciplinary
      ––   Specialists with local expertise – no ‘fly-in’ consultants



      Thus, Rödl & Partner offers you the following
      added value:
      ––  Your consultant speaks your language anywhere in the world – also in a figurative sense
      –– Regular advice offered by a team of consultants and a direct point of contact
      –– One-stop-shop concept – coordination of service providers that saves you time
      ––  Immediate and direct access to the best local experts, without language and time
          barriers
      –– You get an easy, consistent, cost-efficient and transparent overview of your projects
          worldwide
      –– You receive directly usable information firsthand
      –– We offer you international hands-on solutions




 10
BEPS Action 13 state
of implementation in
selected countries
WORLD




       Argentina
       Australia
       Brazil
       Cambodia
       China
       Egypt
       Europe
       Georgia
       Hong Kong
       India
       Indonesia
       Israel
       Japan
       Kazakhstan
       Kenya
       Malaysia
       Mauritius
       Mexico
       Nigeria
       Phillippines
       Russia
       Singapore
       South Africa
       Thailand
       Tunesien
       United Arab Emirates
       USA
       Vietnam


       Implemented
       Partially implemented
       Implementation expected
       No implementation



  11
BEPS Action 13 state
of implementation in
selected countries
EUROPA


    Austria
    Belarus
    Belgium
    Bulgaria
    Croatia
    Cyprus
    Czech Republic
    Denmark
    Estonia
    Finland
    France
    Germany
    Hungary
    Ireland
    Italy
    Latvia
    Liechtenstein
    Lithuania
    Moldova
    Netherlands
    Poland
    Portugal
    Romania
    Slovakia
    Serbia
    Spain
    Sweden
    Switzerland
    Turkey
    Ukraine
    United Kingdom


    Implemented
    Partially implemented
    Implementation expected
    No implementation



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Implementation BEPS Action 13

ARGENTINA
              Master File                               Local File                                   CbCR
              –– The Master File concept according to BEPS Action 13 has not been                    –– The CbCR according to BEPS
                 implemented, but is expected.                                                          Action 13 has been implemented
                                                                                                        for FYs starting from 2017.
              –– On 27 December 2018, a National        –– In Argentina, a Local File (called TP     –– Preparation and submission
                 Decree was enacted that will allow        Report) has been in place since the          deadline: Submission within 12
                 the tax authorities to require a          fiscal year 1999.                            months after the end of the fiscal
                 Master File.                           –– Although it is not completely in             year.
              –– The tax authorities have not yet          line with BEPS 13, it contains - to a     –– Threshold: Consolidated revenue
                 issued any resolution to exercise         certain extent - similar information.        of at least EUR 750 million in the
                 this right.                            –– Local documentation requirements:            previous year.
                                                           –– Thresholds: Transactions with         –– Language: Spanish.
                                                               the total volume exceeding the        –– Surrogate Filing: Has been
                                                               amount of ARS 3,000,000 or               implemented.
                                                               the amount of the individual          –– Secondary Filing: Has been
                                                               transaction of ARS 300,000.              implemented.
                                                           –– Submission deadline: Local            –– Duty of notification: Within 3
                                                               documentation must be filed              months after the end of the
                                                               within 14 days of the beginning          fiscal year on the website of
                                                               of the eighth month following the        the Argentinian tax authority. In
                                                               fiscal year.                             addition, a secondary notification
                                                           –– Duty of notification: Not                must be filed within 2 months of
                                                               applicable.                              the CbCR submission deadline,
                                                           –– Penalties: Up to ARS 20,000              which must contain a specific
                                                               for non-compliance with the              date of submission by a foreign
                                                               submission deadline.                     entity.
                                                        –– Also informative returns regarding        –– Penalties:
                                                           transactions with related and                –– A fine ranging between ARS
                                                           unrelated foreign entities must be               80,000 and ARS 200,000 for
                                                           filed.                                           failure to notify;
                                                           –– Penalties:                                –– In the case of failure to
                                                               –– Non-submission of                        submit, the fine ranges
                                                                   information regarding                    between ARS 600,000 and
                                                                   transactions with foreign                ARS 900,000.
                                                                   related entities will result in      –– In addition, taxpayers will be
                                                                   a fine of ARS 10,000 (ARS                subject to further sanctions:
                                                                   20,000 for foreign-owned                 –– Increased risk of tax audits
                                                                   taxpayers).                                  in the future;
                                                               –– Non-submission of information            –– Suspension or exclusion
                                                                   regarding imports and exports                from specific tax registers;
                                                                   with unrelated entities will                 and
                                                                   result in a fine of ARS 1,500            –– Suspension from the
                                                                   (ARS 9,000 for foreign-owned                 applications to obtain
                                                                   taxpayers).                                  non-withholding
                                                                                                                certificates.
                                                                                                     –– Argentina is a signatory of
                                                                                                        Multilateral Competent Authority
                                                                                                        Agreement on the Exchange of
                                                                                                        CbCR (the ”CbC MCAA”).
                                                                                                     –– A TXT format similar to the
                                                                                                        OECD‘s XML format has been
                                                                                                        implemented.

                                                        Effective in Law for fiscal years as from    Effective in Law for fiscal years as
                                                        1 January 1999                               from 1 January 2017




    13
Implementation BEPS Action 13

AUSTRALIA
              Master File                                   Local File                                    CbCR
              –– The Master File concept according          –– Local File must be lodged in a             –– The CbCR according to BEPS
                 to BEPS Action 13 has been                    prescribed electronic format                  Action 13 has been implemented
                 incorporated in the domestic                  which is unique to Australia. There           for FYs starting from 2016.
                 legislation.                                  is a “short form” for companies            –– Language: Only in English.
              –– An SGE (significant global entity) is         which are characterised as small           –– Surrogate Filing: Has been
                 required to provide the Australian            in Australia and have certain                 implemented.
                 Taxation Office (ATO) with an                 attributes.                                –– Secondary Filing: Has been
                 English version of the Master File         –– Local File requirements exist in              implemented.
                 prepared by the global parent entity.         addition to the local Transfer Pricing     –– Duty of notification: An entity
              –– Exemptions are possible in limited            Documentation requirements                    is required to notify of its SGE
                 cases only (e.g. for the first year if        in Australia, although there is a             status in the annual company tax
                 the foreign parent is in a jurisdiction       Simplified Transfer Pricing Record            return (as a rule, 6.5 months after
                 which has not yet adopted the                 Keeping Option available for specific         the year-end).
                 Master File concept). Exemptions              small local entities.                      –– Australia is a signatory of the
                 must be applied for and are not            –– Also, there is a requirement for              Multilateral Competent Authority
                 automatic.                                    an SGE to lodge general purpose               Agreement on the Exchange of
                                                               financial statements with the ATO             CbCR (the ”CbC MCAA”).
                                                               at the time of lodging the annual          –– OECD‘s XML format for
                                                               company tax return unless they                submission has been
                                                               have already been lodged with the             implemented.
                                                               corporate regulator.

              –– Requirements / thresholds:
                    –– Entity qualifies as an “Significant Global Entity“ (SGE), if it is a member of a consolidated group of entities.
                    –– The group generated annual global income exceeding AUD 1 billon in the previous year.
                    –– Preparation and submission deadline: Within 12 months after the end of the FY.

              –– Penalties:
                    –– Failure to file on time results in penalties ranging up to AUD 525,000 per filing obligation.
                    –– False or misleading statements can be fined up to 150 % of the tax shortfall, or in the case of no shortfall with a
                        penalty of AUD 25,200. The penalty may be reduced if reasonable argumentation is presented. A penalty reduction
                        arising out of transfer pricing adjustments may be applied, if local Transfer Pricing Documentation requirements
                        must be met before the annual tax return is filed.

              Effective in Law for fiscal years as from 1 January 2016




    14
Implementation BEPS Action 13

AUSTRIA
              Master File                                   Local File                               CbCR
              –– The Master File concept according to BEPS Action 13 has been incorporated in        –– The CbCR according to BEPS
                 the domestic legislation.                                                              Action 13 has been implemented
              –– Requirements / thresholds:                                                             for FYs starting from 2016.
                 –– An Austrian entity is part of a MNE group; and                                   –– Threshold: Annual consolidated
                 –– Its revenue exceeded the amount of EUR 50 million in each of the two               group revenue of at least EUR 750
                      preceding years.                                                                  million in the previous year.
                 –– No Master File and Local File must be prepared as from the following fiscal     –– Preparation and submission
                      year if the revenue does not exceed EUR 50 million in two consecutive years.      deadline: No later than 12 months
              –– Duty of notification and deadline for the preparation: No fixed deadline. The          after the end of the fiscal year.
                 tax authorities may request submission of the Master File and the Local File        –– Surrogate filing: Has been
                 following the submission of the tax return.                                            implemented.
              –– If the revenue of the Austrian entity is below the threshold, tax authorities may   –– Secondary filing: Has been
                 request submission of the Master File if another group entity had to prepare the       implemented.
                 Master File according to the law of another state.                                  –– Duty of notification: By the end
              –– Submission deadline: Upon request, within 30 days.                                     of the fiscal year; (form VPDG
              –– Language: German or English                                                            1, per mail or electronically via
              –– Penalties: Up to EUR 5,000 for non-compliance.                                         FinanzOnline).
              –– Also if the revenue is below the threshold, the Transfer Pricing Documentation      –– Penalties: Up to EUR 50,000.
                 must be prepared based on the general recording and cooperation obligations of      –– Austria is a signatory of the
                 the taxpayer (§§ 124, 131 and 138 BAO).                                                Multilateral Competent Authority
                                                                                                        Agreement on the Exchange of
                                                                                                        CbCR (the ”CbC MCAA”).
                                                                                                     –– OECD‘s XML format for
                                                                                                        submission has been
                                                                                                        implemented.

              Effective in Law for fiscal years as from 1 January 2016




    15
Implementation BEPS Action 13

BELARUS
              Master File                                  Local File                                  CbCR
              –– T he Master File concept has not been implemented. In this context, the actual       –– The CbCR according to
                  Master File concept does not contravene the local legislation and is largely            BEPS Action 13 has not been
                  accepted.                                                                               implemented yet.
              –– Local documentation requirements:                                                     –– It is expected that the
                  –– A documentation requirement applies to the ”large” taxpayers with the               implementation of CbCR in
                      transaction volume of more than BYN 2 million (about EUR 800,000) per year;         Russia will accelerate the process
                      or                                                                                  in Belarus.
                  –– Other taxpayers who are involved in the transactions with „strategic“ goods
                      (defined by law) in the same volume (EUR 800,000 p.a.). The documentation
                      must be prepared after the end of the tax year and submitted upon a request.
                      The documentation may be requested by the tax authorities at any time
                      starting from 1 July of the following year.
                  –– In the following cases a short version of the documentation (“Short
                      documentation”) must be submitted upon request (early preparation is not
                      required):
                      –– Acquisition or sale of goods or services by or to an offshore entity, or
                          an affiliated foreign-based entity or an affiliated entity, which is tax-
                          exempt in Belarus, with the transaction volume exceeding BYN 400,000
                          (approximately EUR 160,000) within a calendar year; or
                      –– Real estate transactions (regardless of the transaction volume). The
                          Short documentation shall be provided upon request within the time limit
                          specified by the tax authority (as a rule – 10 working days).
                  –– Penalties: No sanctions are imposed for the missing documentation, but the
                      tax authority may, on the basis of its own calculation, request the additional
                      payment of corporate income tax.
              –– Requirements to the content and form of the documentation / Short documentation:
                  –– According to the latest amendments to the Belarusian Tax Code, which have
                      been introduced since 01.01.2019, the documentation / Short documentation
                      must be prepared in accordance with the statutory sample, but the
                      submission of any additional information is explicitly permitted.
                  –– The announced comprehensive template for documentation / Short
                      documentation is one-tier document (no differentiation between Master and
                      Local File, no CbCR).
                  –– Language: Russian




    16
Implementation BEPS Action 13

BELGIUM
              Master File                                 Local File                                  CbCR
              –– The Master File concept according        –– Requirements / thresholds: The same      –– The CbCR according to BEPS
                 to BEPS Action 13 has been                  requirements as in the case of the          Action 13 has been implemented
                 incorporated in the domestic                Master File.                                for FYs starting from 2016.
                 legislation.                             –– Submission deadline: The Local           –– Threshold: A MNE group must
              –– Requirements / thresholds: A Master         File must be filed by the same              file the CbCR if it has generated a
                 File must be filed if the Belgian           submission deadline as the                  consolidated revenue of EUR 750
                 constituent entity exceeds one of           corporate income tax return of the          million in the last year.
                 the following criteria for the last         Belgian constituent entity relating to   –– Submission deadline: Within
                 fiscal year:                                the reporting period. (Please note:         12 months after the end of the
                 –– Total operating and financial           the corporate income tax return             reporting period of the MNE group.
                     revenue of more than EUR 50             and the Local File cannot be filed       –– Language: The CbCR may be
                     million per Belgian constituent         via the same portal - the corporate         submitted also in English.
                     entity (excl. non-recurring             income tax return must be filed          –– Surrogate filing: Has been
                     revenue); or                            via BizTax and the Local File - via         implemented.
                 –– Balance sheet total of more             MyMinFinPro)                             –– Secondary filing: Has been
                     than EUR 1 billion per Belgian       –– Language: The Local File may be             implemented.
                     constituent entity; or                  submitted also in English.               –– Duty of notification: The
                 –– Annual average of more than 100      –– Penalties: Non-compliance with the          notification form must be filed by
                     fulltime equivalents (employees)        submission deadline can result in           the end of the reporting period of
                     per Belgian constituent entity.         a fine ranging between EUR 1,250            the MNE group.
              –– Preparation and submission                  and EUR 25,000 for each further          –– Penalties: Non-compliance with
                 deadline: Within 12 months after the        violation.                                  the submission deadlines can
                 end of the fiscal year of the MNE        –– The Local File consists of 3 parts: A,      result in a fine ranging between
                 group.                                      B and C. Part A must always be filed        EUR 1,250 and EUR 25,000, for
              –– Language: The Master File may be            if the Local File is required. Part B       each further violation.
                 submitted also in English.                  must be filed only in case that at       –– Belgium is a signatory of the
              –– Penalties: Non-compliance with the          least one of the business units of the      Multilateral Competent Authority
                 submission deadline can result in           Belgian entity has executed cross-          Agreement on the Exchange of
                 a fine ranging between EUR 1,250            border intra-group transactions of          CbCR (the ”CbC MCAA”).
                 and EUR 25,000 for each further             more than EUR 1,000,000. In such         –– OECD‘s XML format for submission
                 violation.                                  a case Part B must be completed             has been implemented.
              –– XML-Format for submission has               for each business unit that has
                 been implemented.                           exceeded this threshold.
                                                          –– Part C is optional and can be used
                                                             for filing appendices.
                                                          –– XML-Format for submission has
                                                             been implemented.

              Effective in Law for fiscal years as from   Part A & C are effective in Law for         Effective in Law for fiscal years as
              1 January 2016                              fiscal years as from 1 January 2016         from 1 January 2016
                                                          Part B as from 1 January 2017




    17
Implementation BEPS Action 13

BRAZIL
              Master File                                  Local File                                   CbCR
              –– T
                  he Master File concept according to BEPS Action 13 has not been implemented yet.     –– The CbCR according to BEPS
              –– Local documentation requirements:                                                         Action 13 has been implemented
                 –– Obligation to prepare documentation: Pursuant to the Law No. 9.430 / 96               for FYs starting from 2016.
                     and the Normative Instruction #1312 / 2012, intercompany transactions (e.g.        –– Threshold:
                     supply of goods, provision of services, transfer of rights or loans) are subject      –– Enterprises with total
                     to domestic transfer pricing rules. Brazilian companies electing the Presumed             consolidated revenue of more
                     Profit Method to assess their corporate income tax are exempt from the                    than BRL 2.26 billion in the
                     obligation to perform the calculation of import transactions.                             previous fiscal year, if the
                 –– Submission deadlines: The documentation does not need to be submitted,                    parent company is resident in
                     but the calculation must be prepared until the last business day of July of the           Brazil; or
                     following calendar year (the documentation must be kept on file for 5 years).         –– Consolidated revenue of more
                     The calculation should be performed on a yearly basis to assess whether any               than EUR 750 million in the
                     adjustment to the corporate income tax base should be made on an item-by-                 previous fiscal year if the
                     item basis, irrespective of the value of intercompany transactions. Safe harbour          parent company is resident
                     applies only to export transactions, provided that specific criteria are met.             abroad.
                 –– Duty of notification: No notification obligation regarding preparation of          –– Submission deadline: Currently,
                     documentation; Calculated fiscal adjustments must be disclosed in the                 the CbCR shall be disclosed
                     Corporate Income Tax Return for the following year (last business day of July).       annually using a Module (Bloco W)
                 –– English documentations are not accepted.                                               of the Brazilian Annual Corporate
                 –– Penalties for non-compliance: Non-deductibility of expenses, if applicable,           Income Tax Return (”ECF”) no
                     adjustment of the corporate income tax base and of the amount of tax due              later than by the last business day
                     in the period, plus financial penalties and interest for submitting inaccurate        of July each year.
                     information.                                                                       –– Language: Portuguese, English or
                                                                                                           Spanish.
                                                                                                        –– Surrogate filing: Has been
                                                                                                           implemented.
                                                                                                        –– Secondary filing: Has been
                                                                                                           implemented.
                                                                                                        –– Duty of notification: As part of
                                                                                                           the Annual Corporate Income Tax
                                                                                                           Return; In the same electronic
                                                                                                           format as the CbCR and at the
                                                                                                           same time, i.e. by the last business
                                                                                                           day of July each year.
                                                                                                        –– Penalties:
                                                                                                           –– Provision of incomplete or
                                                                                                               inaccurate information on
                                                                                                               transactions and financial
                                                                                                               operations in CbCR may result
                                                                                                               in a penalty of up to 3 % of the
                                                                                                               transaction value.
                                                                                                           –– Failure to file the CbCR is
                                                                                                               subject to a penalty ranging
                                                                                                               between BRL 500 and BRL
                                                                                                               1,500 on a monthly basis.
                                                                                                        –– Brazil is a signatory of the
                                                                                                           Multilateral Competent Authority
                                                                                                           Agreement on the Exchange of
                                                                                                           CbCR (the ”CbC MCAA”).
                                                                                                        –– OECD‘s XML format for submission
                                                                                                           has been implemented.

                                                                                                        Effective in Law for fiscal years as
                                                                                                        from 1 January 2016




    18
Implementation BEPS Action 13

BULGARIA
              Master File                                  Local File                                  CbCR
              –– The Master File concept according to BEPS Action 13 has not been implemented yet.     –– Effective for the fiscal years
              –– Local documentation requirements:                                                        starting from 2016, if the CbCR is
                 –– There are no legally prescribed obligations regarding preparation of the             filed by the ultimate parent entity
                     Transfer Pricing Documentation. However, any transactions with related               or for the fiscal years starting
                     parties have to be declared in the annual tax return and disclosed in the            from 2017, if the CbCR is filed
                     annual financial statements.                                                         by the constituent entity.
                 –– Thresholds: According to the Transfer Pricing Guidelines issued by the            –– Threshold:
                     Bulgarian tax authorities, it should be assessed on a case by case basis             –– Ultimate parent entity of
                     whether a detailed Transfer Pricing Documentation is required. As a rule, it is          the group is a tax resident
                     not necessary for transactions with related entities which do not exceed the             in Bulgaria and the annual
                     following thresholds:                                                                    consolidated group revenue
                     –– BGN 200,000 for transactions in goods and services;                                   is at least BGN 100 million
                     –– BGN 400,000 for transactions in intangible assets and interests under                (approx. EUR 51 million) for
                         loan agreements.                                                                     the fiscal year preceding the
              –– Submission deadline: In the case of a tax audit, the deadline is determined by the           reporting year; or
                 tax authority (usually 7 or 14 days). If requested documents and / or declarations       –– Ultimate parent entity of the
                 are not submitted on time, the tax authorities may impose a financial penalty. The           group is not a tax resident
                 term may be prolonged or temporarily suspended under certain circumstances.                  in Bulgaria and the annual
              –– Duty of notification: No                                                                     consolidated group revenue is
              –– Language: Bulgarian                                                                          at least BGN 1,466 million (EUR
              –– Penalties for non-compliance: A financial penalty between BGN 250 and BGN                    750 million) for the fiscal year
                 500 will be imposed, if the taxpayer refuses to cooperate with the tax authorities           preceding the reporting year.
                 or prevents auditors from exercising their powers. In the case of repeated            –– Submission deadline: Within
                 violation, a financial penalty ranges between BGN 500 and BGN 1,000.                     12 months after the end of the
                                                                                                          reporting fiscal year.
                                                                                                       –– Language: Bulgarian
                                                                                                       –– Surrogate filing: Has been
                                                                                                          implemented.
                                                                                                       –– Secondary filing: Has been
                                                                                                          implemented.
                                                                                                       –– Duty of notification: In the
                                                                                                          electronic format through the
                                                                                                          website of the NRA by the end
                                                                                                          of the reporting fiscal year.
                                                                                                          Information about the status
                                                                                                          regarding the CbCR within the
                                                                                                          MNE group and about which
                                                                                                          entity is required to file the CbCR
                                                                                                          should be disclosed.
                                                                                                       –– Penalties:
                                                                                                          –– Failure to submit the report
                                                                                                              results in a penalty ranging
                                                                                                              between BGN 100.000 and
                                                                                                              BGN 200,000;
                                                                                                          –– Submission of incomplete
                                                                                                              or incorrect data results in a
                                                                                                              penalty ranging between BGN
                                                                                                              50.000 and BGN 150,000);
                                                                                                          –– A violation of the notification
                                                                                                              obligation results in a penalty
                                                                                                              ranging between BGN 50.000
                                                                                                              and BGN 150,000).
                                                                                                       –– Bulgaria is a signatory of the
                                                                                                          Multilateral Competent Authority
                                                                                                          Agreement on the Exchange of
                                                                                                          CbCR (the ”CbC MCAA”).
                                                                                                       –– OECD‘s XML format for submission
                                                                                                          has not been implemented.
                                                                                                          The report is submitted via an
                                                                                                          electronic programme which is
                                                                                                          available on the NRA website.

                                                                                                       Effective in Law for fiscal years as
                                                                                                       from 1 January 2016 or 1 January 2017
    19
Implementation BEPS Action 13

CAMBODIA
              Master File                                   Local File                                  CbCR
              –– The Master File concept according to BEPS Action 13 has not been implemented           –– The CbCR according to
                 yet. The Ministry of Economy and Finance issued Prakas No. 986 which is based             BEPS Action 13 has not been
                 on the OECD Transfer Pricing Guidelines.                                                  implemented yet.
              –– The Prakas definition of related parties corresponds with the Law on Taxation,         –– Cambodia is not a signatory
                 according to which enterprises are related if:                                            of the Multilateral Competent
                 –– They are members of the same group of enterprises; or                                  Authority Agreement on the
                 –– An enterprise controls another enterprise (i.e. participation of at least 20 %);      Exchange of CbCR (the “CbC
                      or                                                                                   MCAA”).
                 –– An enterprise is controlled by another enterprise; or
                 –– Enterprises are under common control of a third party.
              –– Thresholds: No
              –– Deadline for the preparation: The same as the due date for filing tax returns; i.e.
                 within 3 months after the fiscal year-end.
              –– Submission deadline: Upon request by the Cambodian tax authority; a specific
                 submission deadline is determined on a case-by-case basis.
              –– Duty of notification: Taxpayer must disclose related-party transactions when
                 filing tax returns.
              –– Language: Khmer or English
              –– Penalties: Failure to comply with the TP regulations may result in:
                 –– Revocation of the company’s certificate of conformity;
                 –– A financial penalty ranges between 10 % and 40 % of back taxes;
                 –– A criminal complaint is lodged against a taxpayer;
                 –– Interest charge of 2 % on back taxes due to adjustment to the arm’s length
                      pricing.

              Effective in Law for fiscal years as from 10 October 2017




    20
Implementation BEPS Action 13

CHINA
              Master File                                   Local File                                  CbCR
              –– The Master File concept according          –– The Local File concept has been          –– The CbCR according to BEPS
                 to BEPS Action 13 has been                    adjusted to the BEPS Action 13 in           Action 13 has been implemented
                 incorporated in the domestic                  2016.                                       for FYs starting from 2016.
                 legislation.                               –– Thresholds:                              –– Requirements / thresholds:
              –– Requirements / thresholds:                    –– In the case of transfers of             –– Ultimate parent entity of a
                 –– The enterprise makes cross-                   tangible assets exceeding the               MNE group is a tax resident
                     border transactions with related              amount of CNY 200 million                   in China and the group
                     parties and the group, which the              between related companies; or               has generated an annual
                     enterprise is a part of, has already      –– In the case of transfers of                 consolidated group revenue of
                     prepared a Master File; or                    financial assets or transfers of            more than CNY 5,5 billion; or
                 –– The total amount of related-party             ownership of intangible assets          –– A Chinese entity has been
                     transactions exceeds CNY 1                    exceeding the amount of CNY                 commissioned by the MNE
                     billion.                                      100 million between related                 group to prepare the CbCR
              –– Deadline for the preparation: Within              parties; or                                 (preparation of the CbCR is
                 12 months after the fiscal year end           –– All other related party                     governed by the domestic tax
                 of the group’s ultimate holding                   transactions exceeding the                  law of the ultimate parent
                 company.                                          amount of CNY 40 million in                 entity).
              –– Submission deadline: Within 30 days               total (e.g. interests on             –– Submission deadline: May 31 of
                 upon request of tax authorities.                  intercompany loans).                    the following year together with
              –– As compared to BEPS Action 13,             –– Deadline for the preparation: June          the annual CIT return.
                 additional information is required            30 of the following fiscal year.         –– Language: Chinese and English
                 for the Master File in China.              –– Submission deadline: Upon request        –– Surrogate filing: Has been
              –– Duty of notification: It should be            of tax authorities within 30 days.          implemented.
                 indicated in the annual corporate          –– As compared to BEPS Action 13,           –– Secondary filing: Has been
                 income tax (CIT) return whether the           additional information is required for      implemented.
                 company is obliged to prepare the             the Local File in China.                 –– Duty of notification: Along with
                 Master File for the year.                  –– Duty of notification: It should be          the form for reporting of related
              –– Language: Chinese                             indicated in the annual CIT return          party transactions.
              –– Penalties: Non-compliance (CNY                whether the company is obliged to        –– Penalties: CNY 10,000 – CNY
                 10,000), if requirements are not met.         prepare the Local File for the year.        50,000
                                                            –– Language: Chinese                        –– China is a signatory of the
                                                            –– Penalties: Non-compliance (CNY              Multilateral Competent Authority
                                                               10,000), if requirements are not met.       Agreement on the Exchange of
                                                                                                           CbCR (the ”CbC MCAA”).
                                                                                                        –– OECD‘s XML format for
                                                                                                           submission has been
                                                                                                           implemented.

              Effective in Law for fiscal years as from 1 January 2016




    21
Implementation BEPS Action 13

CROATIA
              Master File                                  Local File                                   CbCR
              –– The incorporation of the Master File concept according to BEPS Action 13 into          –– The CbCR according to BEPS
                 domestic legislation is expected. The Croatian tax authority (CTA) has not issued         Action 13 has been implemented
                 any guidelines on the implementation of the Master File concept yet.                      for FYs starting from 2016.
              –– The Local File has not been implemented as such, but the local requirements are        –– Threshold: MNEs headquartered
                 similar to the OECD TP Guidelines.                                                        in Croatia with a total
              –– Local documentation requirements:                                                         consolidated group turnover of at
                 –– Thresholds: No thresholds have been prescribed by the CTA concerning                  least EUR 750 million in the last
                     Transfer Pricing Documentation.                                                       fiscal year.
                 –– Deadline for the preparation: No deadline for preparing the Transfer Pricing       –– Submission deadline: Within 12
                     Documentation has been prescribed by law. However, the law requires the               months after the end of the fiscal
                     Transfer Pricing Documentation to be available and provided to the tax                year for which the report was
                     authorities upon their request as part of a tax audit.                                submitted.
                 –– Submission deadline: In practice, taxpayers have 30 to 45 days to submit their     –– Language: Croatian
                     TP documentation after receiving a request from the tax authority.                 –– Surrogate filing: Has been
                 –– Duty of notification: There are no notification requirements. Some medium and         implemented.
                     large entities must provide information about the methods applied, if requested    –– Secondary filing: Has been
                     by the CTA.                                                                           implemented.
                 –– Language: Croatian                                                                  –– Duty of notification: Within 4
                 –– Penalties: Fines of up to HRK 200,000 (approximately EUR 27,000) may be               months after the end of the fiscal
                     imposed on a company and up to HRK 20,000 (approximately EUR 2,700) on                year. After the first notification
                     the responsible individual within the company for every underestimation of the        (e.g. for FY17), a company is
                     corporate income tax liability.                                                       no longer obliged to submit
                 –– Penalty interest will also be calculated starting from the date on which the tax      further notifications to Tax
                     was due.                                                                              Administration as long as the
                                                                                                           identity and tax residence of the
                                                                                                           entity submitting the CbCR on
                                                                                                           behalf of the group of companies
                                                                                                           do not change.
                                                                                                        –– Penalties: From EUR 270 to EUR
                                                                                                           27,000.
                                                                                                        –– Croatia is a signatory of the
                                                                                                           Multilateral Competent Authority
                                                                                                           Agreement on the Exchange of
                                                                                                           CbCR (the ”CbC MCAA”).
                                                                                                        –– OECD‘s XML format for
                                                                                                           submission of CbCR has been
                                                                                                           implemented.

                                                                                                        Effective in Law for fiscal years as
                                                                                                        from 1 January 2016




    22
Implementation BEPS Action 13

CYPRUS
              Master File                                 Local File                                 CbCR
              –– The Master File concept according to BEPS Action 13 has not been implemented yet.   –– The CbCR according to BEPS
              –– The tax authorities have not yet issued any guidance on the implementation of          Action 13 has been implemented
                 the Master File and the Local File. However, it is expected that the OECD TP           for FYs starting from 2016.
                 Guidelines will have been adopted by the tax authorities by 2019.                   –– Threshold: Annual consolidated
              –– No local documentation requirements are in place.                                      group revenue exceeding EUR
                                                                                                        750 million in the previous year.
                                                                                                     –– Submission deadline: Within
                                                                                                        12 months after the end of the
                                                                                                        reporting fiscal year.
                                                                                                     –– Language: English
                                                                                                     –– Surrogate filing: Has been
                                                                                                        implemented.
                                                                                                     –– Secondary filing: Has been
                                                                                                        implemented. Effective in law for
                                                                                                        fiscal years from 2017 onwards.
                                                                                                     –– Duty of notification: The CbCR
                                                                                                        should be submitted by the end
                                                                                                        of each fiscal year. Submission is
                                                                                                        made by electronic means.
                                                                                                     –– Penalties:
                                                                                                        –– Penalties not exceeding EUR
                                                                                                            10,000 will apply in case of
                                                                                                            non-compliance with the
                                                                                                            CbCR Reporting obligations.
                                                                                                        –– Penalties not exceeding EUR
                                                                                                            5,000 will apply in case of
                                                                                                            failure to file a notification.
                                                                                                        –– Penalties not exceeding
                                                                                                            EUR 1,500 will apply in case
                                                                                                            of non-compliance with
                                                                                                            obligation to keep all the
                                                                                                            necessary books, documents
                                                                                                            and records.
                                                                                                     –– Cyprus is a signatory of the
                                                                                                        Multilateral Competent Authority
                                                                                                        Agreement on the Exchange of
                                                                                                        CbCR (the ”CbC MCAA”).
                                                                                                     –– OECD‘s XML format for submission
                                                                                                        has been implemented.

                                                                                                     Effective in Law for fiscal years as
                                                                                                     from 1 January 2016




    23
Implementation BEPS Action 13

CZECH
REPUBLIC
              Master File                                  Local File                                  CbCR
              –– The Master File concept has not been implemented yet. However, it is                  –– The CbCR according to BEPS
                 recommended by the tax authorities to follow the OECD TP Guidelines with                 Action 13 has been implemented
                 regards to the Master File and the Local File.                                           for FYs starting from 2016.
              –– Master File and Local File are typically requested by the tax authorities during      –– Threshold: Annual consolidated
                 external tax audits.                                                                     group revenue exceeding EUR
              –– Language: In practice, the Master File is usually accepted in English or German,         750 million in the previous year.
                 but according to the law it should be prepared in Czech. The Local File is accepted   –– Submission deadline: Within
                 only in the Czech language.                                                              12 months after the end of the
              –– Starting from the assessment period 2014, the volume of all cross-border                 reporting fiscal year.
                 intercompany transactions must be notified as an appendix to the corporate            –– Surrogate filing: Has been
                 income tax return (except PEs). The deadline for such notification is 3 or 6 months      implemented.
                 of the end of the tax period.                                                         –– Secondary filing: Has been
                                                                                                          implemented.
                                                                                                       –– Duty of notification: In the
                                                                                                          case of first-time reporting, the
                                                                                                          deadline is generally by the
                                                                                                          end of the reporting fiscal year.
                                                                                                          Afterwards, only changes need to
                                                                                                          be reported (within 15 days of the
                                                                                                          reportable event).
                                                                                                       –– Penalties: Up to CZK 1.5 million.
                                                                                                       –– Czech Republic is a signatory
                                                                                                          of the Multilateral Competent
                                                                                                          Authority Agreement on the
                                                                                                          Exchange of CbCR (the ”CbC
                                                                                                          MCAA”).
                                                                                                       –– The OECD‘s XML format
                                                                                                          for submission has been
                                                                                                          implemented.

                                                                                                       Effective in Law for fiscal years as
                                                                                                       from 1 January 2016




    24
Implementation BEPS Action 13

DENMARK
              Master File                                   Local File                                  CbCR
              –– The Master File concept according to BEPS Action 13 has been incorporated in           –– The CbCR according to BEPS
                 the domestic legislation.                                                                 Action 13 has been implemented
              –– Requirements / thresholds:                                                                for FYs starting from 2016.
                 –– A group employs more than 250 employees (FTE).                                      –– Threshold: Group revenue of at
                 –– A group employs less than 250 employees (FTE), but its revenue exceeds DKK            least EUR 750 million (DKK 5.6
                     250 million or the group’s profit is more than DKK 125 million. Otherwise, the        billion) in the previous fiscal year.
                     group is exempted from the obligation to prepare full documentation.               –– Submission deadline: 12 months
                 –– Entities performing transactions with group companies within non-DTA                  after the last day of the fiscal year
                     countries or countries outside the EU or the EEC are always required to               for which the CbCR is prepared.
                     prepare documentation for those controlled transactions, regardless of the         –– Surrogate filing: Has been
                     transaction volume.                                                                   implemented since the fiscal
              –– Duty of notification and deadline for the preparation: The TP documentation has           year 2017.
                 to be prepared not later than the deadline for filing the tax return for the fiscal    –– Secondary filing: Has been
                 year, i.e. 30 June 2019 for a company with the calendar year (01.01.-31.12.2018)          implemented since the fiscal
                 as the fiscal year. However, there is no filing requirement. The documentation is         year 2017.
                 submitted only upon request by the tax authorities.                                    –– Duty of notification: A Danish
              –– Submission deadline: The submission deadline is 60 days, i.e. 2 months, after             group entity is required to inform
                 receiving a request from the Danish tax authorities. There is no possibility to           the Danish tax authorities within
                 extend this deadline.                                                                     12 months in the following
              –– Language: Danish, Norwegian, Swedish or English                                           year about which ultimate
              –– Penalties: There are two levels of sanctions.                                             parent / surrogate parent files the
                 –– Disclosure of information: This applies to all controlled transactions within         CbCR in electronic form. If the
                     the scope of income tax return. The penalty for providing incorrect or                same ultimate parent / surrogate
                     misleading information, whether intentionally or negligently, will be the higher      parent prepares the CbCR for the
                     of two amounts:                                                                       following fiscal years, the Danish
                     –– 0.5 % of revenues up to DKK 500 million, 0.1 % of the remainder up to DKK         group entity is not required to
                          1 billion and 0.05 % of revenues over DKK 1 billion (excluding cap), or          make such a notification on an
                     –– DKK 250,000 for companies with up to 50 employees. For every further              annual basis.
                          50 employees [up to 500 employees], this amount increases each time by        –– Penalties: Ranging between EUR
                          DKK 250,000. In companies with more than 500 employees the penalty               10,000 and EUR 50,000 per
                          will be DKK 2.5 million.                                                         company.
                     –– All penalties are cumulative and may be increased by 50 % if the breach        –– Denmark is a signatory of the
                          relates to a systematic breach of the tax rules, which is the case if more       Multilateral Competent Authority
                          than one of the above penalties is imposed.                                      Agreement on the Exchange of
                     –– Preparation of documentation: If the Group is not an SME, see above.              CbCR (the ”CbC MCAA”).
                          A company may be fined up to DKK 250.000 per fiscal year, if the TP-          –– OECD‘s XML format for
                          documentation is not submitted within the deadline of 60 days or if              submission has been
                          the submitted documentation is considered insufficient. If adequate              implemented.
                          documentation is submitted after the deadline, the standard penalty may
                          be reduced to 50 % or DKK 125.000 per year. If the Danish tax authorities
                          make an upward adjustment based on the prices of the controlled
                          transactions and assume that they do not comply with the arm’s length
                          principle, the documentation penalty will be increased by 10 % of the total
                          upward income adjustment.

              Effective in Law for fiscal years as from 1 January 2017 and optionally for 2016          Effective in Law for fiscal years as
                                                                                                        from 1 January 2016




    25
Implementation BEPS Action 13

EGYPT
              Master File                                     Local File                                   CbCR
              –– T he Master File concept according to BEPS Action 13 has been incorporated in            –– The CbCR according to BEPS
                  the domestic legislation.                                                                   Action 13 has been implemented
              –– Requirements / thresholds: Currently, no binding thresholds for Master or Local             for FYs starting from 2018.
                  File.                                                                                    –– Threshold:
              –– Deadline for the preparation: Not yet defined.                                               –– Egyptian MNEs with a foreign
              –– Submission deadline:                                                                             subsidiary / subsidiaries,
                  –– Master File: Should be made available to the ETA. The submission deadline                   with an annual consolidated
                      corresponds to the deadline for filing the parent entity’s tax in its local juris-          group revenue of at least EGP
                      diction.                                                                                    3 billion (approx. EUR 145
                  –– Local File: Must be submitted to the ETA within two months after filing the                 million), will be required to
                      annual corporate tax return.                                                                prepare and file a report to
              –– Duty of notification: Not yet defined.                                                           the ETA.
              –– Language: Arabic                                                                             –– Egyptian subsidiaries of
              –– Penalties:                                                                                       foreign MNEs are subject to
                  –– A high-risk rating and increased risk of audit;                                              the OECD threshold of EUR
                  –– Unilateral adjustment of transfer prices by the ETA;                                         750 million, and required
                  –– Penalties determined based on the amount of the disputed annual tax base,                   to file a report with the
                      where TP adjustments result from an audit, and expressed as a percentage                    jurisdiction in which the
                      of that amount.                                                                             ultimate parent entity is
                                                                                                                  resident.
                                                                                                           –– Submission deadline: Within
                                                                                                              12 months after the end of the
                                                                                                              reporting fiscal year. The first
                                                                                                              report should be prepared for the
                                                                                                              group’s fiscal year ending on 31
                                                                                                              December 2018.
                                                                                                           –– Surrogate filing: Has not been
                                                                                                              implemented yet.
                                                                                                           –– Secondary filing: Not indicated
                                                                                                              in the Egyptian Tax Authority’s
                                                                                                              announcement (TBC later).
                                                                                                           –– Duty of notification: Should be
                                                                                                              submitted one year after the end
                                                                                                              of the respective fiscal year.
                                                                                                           –– Penalties:
                                                                                                              –– A high-risk rating and
                                                                                                                  increased risk of audit;
                                                                                                              –– Unilateral adjustment of
                                                                                                                  transfer prices by the ETA;
                                                                                                              –– Penalties determined based
                                                                                                                  on the amount of the disputed
                                                                                                                  annual tax base, where TP
                                                                                                                  adjustments result from an
                                                                                                                  audit, and expressed as a
                                                                                                                  percentage of that amount.
                                                                                                           –– Egypt is not a signatory of the
                                                                                                              Multilateral Competent Authority
                                                                                                              Agreement on the Exchange of
                                                                                                              CbCR (the ”CbC MCAA”).
                                                                                                           –– OECD‘s XML format for
                                                                                                              submission has not been
                                                                                                              implemented yet.

              Effective in Law for fiscal years as from 1 January 2018




    26
Implementation BEPS Action 13

ESTONIA
              Master File                                  Local File                                  CbCR
              –– The Master File concept according to BEPS Action 13 has not been implemented          –– The CbCR according to BEPS 13
                 yet. Since 2007, Estonia has had in place a similar documentation concept that           has been implemented for FYs
                 closely follows the Master File concept, though.                                         starting from 2016.
              –– Local documentation requirements:                                                     –– Threshold: Annual consolidated
                 –– Requirements / thresholds for preparing a documentation:                              group revenue of at least EUR 750
                     –– For resident credit institutions, insurance companies and business               million in the preceding year.
                         associations registered on the stock market;                                  –– Submission deadline: Within
                     –– If one transaction party is an entity with tax residency in a low tax rate       12 months after the end of the
                         territory;                                                                       reporting fiscal year.
                     –– For resident corporate groups with at least 250 employees (including          –– Surrogate filing: Has been
                         associated entities), or with a group revenue of at least EUR 50 million in      implemented.
                         the fiscal year preceding the transaction, or a consolidated balance sheet    –– Secondary filing: Has been
                         total of at least EUR 43 million;                                                implemented.
                     –– For non-resident corporate groups, being active in Estonia via a permanent    –– Duty of notification: Within 6
                         establishment and having at least 250 employees (including associated            months after the end of the fiscal
                         entities), or a group revenue of at least EUR 50 million in the fiscal year      year.
                         preceding the transaction, or a consolidated balance sheet total of at        –– Penalties:
                         least EUR 43 million.                                                            –– EUR 3,200 and extended
                 –– Deadline for the preparation: A Transfer Pricing Documentation is required               period of limitations for tax
                     only after a formal request has been sent by the Estonian Tax and Customs                audits (5 years) if the CbCR
                     Board.                                                                                   has not been filed;
                 –– Submission deadline: Transfer Pricing Documentation should be submitted              –– Any group entity resident in
                     to the tax authorities within 60 days of receiving their request.                        Estonia can be required to file
                 –– Duty of notification: No                                                                  the CbCR if the notification
                 –– Language: The documents may be submitted in a foreign language. The                      has not been filed and
                     tax authorities may, however, request a translation of the documents into                additionally, a penalty of EUR
                     Estonian, assigning a reasonable deadline for submitting the translation.                3,200 can be imposed.
                 –– Penalties for non-compliance: Up to EUR 3,200 plus an interest rate of 0,06 %     –– Estonia is a signatory of the
                     per each day on the adjusted value (applicable in the case of non-compliance         Multilateral Competent Authority
                     with the arm’s length principle).                                                    Agreement on the Exchange of
                                                                                                          CbCR (the “CbC MCAA”).
                                                                                                       –– OECD‘s XML format for
                                                                                                          submission has not been
                                                                                                          implemented yet.

                                                                                                       Effective in Law for fiscal years as
                                                                                                       from 1 January 2016




    27
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