Transfer pricing: Global Coordinated Documentation

Global coordination, local compliance: Readiness everywhere

The issue of new transfer pricing documentation and reporting requirements by the OECD in September 2014 will inevitably mean a significant increase in the compliance burden for multinational businesses over the next few years. As a consequence, the preparation of transfer pricing documentation should no longer be regarded as purely a compliance exercise but instead should become an inherent part of the group’s strategic tax risk management.

Groups will in future be required to prepare up to four tiers of documentation (Master File, Local File, country by country report, and local information returns). As the world map illustrates, there are already tax authorities that have announced local adoption of this new OECD approach and most tax authorities are in the process of developing an action plan to address these changes. It will be critical to ensure that data is presented consistently to tax authorities around the world requiring a harmonised and integrated approach. This is likely to increase the pressure on a group’s systems to deliver the source data required on a timely basis and pressure to co-ordinate the preparation of all the relevant documents centrally.

This collision course - increasing globalisation, faced with increasingly burdensome compliance globally - is instilling in many multinationals a new sense of urgency about maintaining effective and consistent transfer pricing documentation across all tax jurisdictions in which they do business.

PwC’s Global Coordinated Documentation™: A unified, more efficient framework

To cope with the increased transparency and disclosure requirements, you need an efficient and consistent framework for producing the documentation required to defend your transfer pricing policy. PwC’s Global Coordinated Documentation (GCD) service is designed to help you do just that.

GCD will facilitate the development of robust, coordinated global transfer pricing documentation and it will enable you to determine where to focus your efforts and deploy resources - making sure all specific local-country tax authority requirements are met, without any loss of consistency among territories.

What the service offers

Our GCD offerings can help you to:

  • Analyse the potential implications for your group of these new requirements and identify remedial actions to be taken prior to implementation;
  • Prepare centrally the Master File and ‘core’ Local File utilising the GCD concept. This ‘core’ document will then be used by each country as part of its Local File report, with the support of our team, deployed wherever you do business; and
  • Analyse the output of your country by country report, including identifying how any risks could be addressed in, and reviewing the consistency of disclosures with, the Master File, Local File and local information returns.

Contact us to learn more about how we can help prepare to meet the new standards for transfer pricing documentation and reporting.