OECD - Update on transfer pricing documentation, country-by-country reporting 

April 2: The Organisation of Economic Co-operation and Development (OECD) today announced:
  • Andrew Hickman (formerly of KPMG) has been appointed the new head of the OECD transfer pricing unit.
  • A recording of today’s webcast is available on the OECD website.

At today’s webcast, senior members from the OECD's Centre for Tax Policy and Administration provided an update on: (1) transfer pricing documentation and a template for country-by-country reporting; (2) tax treaty abuse: (3) the tax challenges of the digital economy; (4) hybrid mismatche arrangements; and (5) consultation with developing countries.

Earlier this week, an OECD official speaking at a 31 March conference, addressed among other items proposals for transfer pricing documentation and country-by-country reporting pursuant to the OECD’s base erosion and profit shifting (BEPS) action plan.

According to statements made at the conference in Paris—

  • The OECD received close to 1,400 pages of comments and representations on the BEPS action steps for transfer pricing documentation and country-by-country reporting.
  • OECD officials met last week with “interested stakeholders” and engaged in a discussion with Working Party No. 6 of the OECD Committee on Fiscal Affairs.

Tentative decisions of Working Party No. 6

Based on statements made during the conference, it is reported that the Working Party No. 6 has tentatively determined that country-by-country reporting:

  • Will require only aggregate reporting (rather legal entity reporting)
  • Will require reporting such as revenue, pre-tax profit, the amount of taxes (cash) paid, current year tax accruals, number of employees, amount of capital, and value of tangible assets, capital and accumulated earnings
  • Will not be part of the “master file”
  • Will delete the last six columns of the country-by-country that concern the transactional information on royalties, interest, and service fees
  • Will require, on a second page, a complete list of entities, per country, with business codes provided
  • Will provide flexibility on the source of statutory data (but will require consistency in application)
  • Will remove the obligation to provide information about the 25 highest paid employees in the Master File

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