A client webinar has been held on BEPS Action 13 (Transfer Pricing Documentation).
On 13 September, we held a client webinar on BEPS Action 13 (Transfer Pricing Documentation). In particular we focused on the practical challenges that we are seeing in relation to the preparation for country by country (CbC) reporting. The webinar was very well attended with lots of interaction from participants in the form of real time questions to our presenters. We first provided a reminder of the requirements of Action 13, including how the OECD’s recommendations are being implemented in the UK and elsewhere, and some of the issues that may affect groups operating in the UK. We then moved on to set out some of the practical challenges that groups are facing as they get to grips with the reporting requirement, including scoping of constituent entities, interpretations of the OECD definitions and a methodology to ensure consistent data collection, analysis and reporting.
For example, identifying the constituent entities for CbC reporting purposes is not always straightforward, and there can be complexities in the reporting treatment for tax transparent entities, such as partnerships. Likewise, many groups will need to consider how to report acquisitions or disposals as a result of M&A activity. There can also be challenges when applying the OECD definitions in practice. The OECD has been deliberately broad to allow flexibility, but (especially in the first year) groups will need to determine an interpretation that is appropriate for their particular circumstances. It is important to understand the key themes arising from the CbC report, and ensure consistent messaging in the transfer pricing master file and local files.
It is clear that CbC reporting is increasingly front of mind for multinational groups, with many undertaking a dry run in advance of the first live reporting period. Working through the requirements can be time consuming, but is essential to ensure that a robust and efficient process is in place.
If you would like a copy of the slides and recording, or have any questions regarding Action 13, please contact Julie Hughff, Andrew Baillie or your usual KPMG contact.
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