Global Transfer Pricing Review

Did you know?

• More than 100 countries have implemented CbyC requirements for years 2016-2024.
• More than 80 percent of the countries that have implemented final rules on CbyC requirements require CbyC notifications.
• More than 70 percent of the countries that require CbyC notifications have CbyC notification penalties.
• Slightly more than 90 percent of the countries that have implemented final rules on CbyC requirements have penalties associated with the CbyC report.
• More than 75 percent of the countries that have implemented final CbyC rules require subsidiaries of a multinational enterprise to file the CbyC report if their parent’s jurisdiction is not covered by a Multilateral Competent Authority Agreement (MCAA) on the exchange of jurisdiction-by-jurisdiction reports.

As of May 2023

Learn more about CbyC Reporting by listening to What Is Country by Country Reporting? Part 1 and Part 2, recent episodes from our Exploring Transfer Pricing podcast.

Did you know?

• More than 70 countries have implemented a Master File for years 2016-2024.
• Approximately 65 percent of the countries that have implemented a Master File require content consistent with that of the OECD Chapter V.
• Approximately 35 percent of the countries that have implemented a Master File require it to be submitted to the tax authority by a certain date.
  • On average, MNEs have approximately 25 days to submit the Master File once requested by a tax authority.
• Just more than 55 percent of countries allow the Master File to be submitted in a language other than the local language.
• Approximately 85 percent of the countries that have Master File requirements have penalties associated with the Master File.

As of May 2023

Learn more about Master Files by listening to How Can You Master the Master File?, a recent episode from our Exploring Transfer Pricing podcast.

Did you know?

• More than 65 countries have implemented a Local File for years 2016-2024. 
• Approximately 55 percent of the countries that have implemented a Local File require content consistent with that of the OECD Chapter V.
• Slightly over 30 percent of the countries that have implemented a Local File require it to be submitted to the tax authority by a certain date.
  • On average, MNEs have approximately 20 days to do the submission.
• Approximately 45 percent of the countries that have implemented a Local File allow it to be submitted in a language other than the local language.
• Over 90 percent of the countries that have Local File requirements have penalties associated with the Local File.

As of May 2023

Learn more about Local Files by listening to What's the Deal with Local Files and Local Documentation?, a recent episode from our Exploring Transfer Pricing podcast.

Did you know?

Adjustments Penalties:

• Over 100 jurisdictions impose penalties related to transfer pricing adjustments. These penalties can range from fines to more rigorous sanctions such as imprisonment. 

Domestic Transactions:

• More than 65 jurisdictions require taxpayers to include domestic related party transactions in their transfer pricing documentation or Local File.

Tax to Book Differences:

• More than 65 jurisdictions allow taxpayers to file tax return numbers that differ from book numbers.

Advance Pricing Agreements:

• Over 75 jurisdictions have Advance Pricing Agreements programs in place offering unilateral, bilateral or multilateral arrangements.
  •    Over 80 percent of these jurisdictions allow taxpayers to enter into bilateral Advance Pricing Agreements. 

Disclosures:

• More than 85 jurisdictions have Transfer Pricing disclosure requirements. Transfer Pricing disclosure requirements include any information requested related to intercompany transaction data beyond country-by-country reporting/notifications and TP report documentation (i.e.  Master file, Local file, and local Transfer Pricing documentation).  
• Over 70 percent of the jurisdictions that have Transfer Pricing disclosure requirements request taxpayers to fill out specific schedules with details on their related party transactions and submit them along with their tax returns.  

Transfer Pricing Safe Harbor Rules:

• More than 35 jurisdictions have Transfer Pricing Safe Harbor Rules.
• Over 45 percent of the Transfer Pricing Safe Harbor rules relate to interest rate-benchmarking, interest limitation and thin-capitalization. 
• Approximately 35 percent of the Transfer Pricing Safe Harbor rules relate to pricing of low-value adding services based on a specific markup without having to conduct a benchmarking study. 

As of May 2023