De danske regler omkring transfer pricingdokumentation

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1 De danske regler omkring transfer pricingdokumentation Afgangsprojekt HD(R) Transfer Pricing Copenhagen Business School Maria Løvendal Andersen 12. maj Anslag Vejleder: Peder Reuther

2 Indholdsfortegnelse 1. Executive summary Problemstilling Problemformulering Afgrænsning Metode Transfer Pricing OECDs modeloverenskomst artikel Armslængdeprincippet Definition af armslængde Ligningsloven OECDs Transfer Pricing Guidelines De danske regler om transfer pricing-dokumentation Skattekontrolloven 3 B Oplysningspligten Dokumentationspligten Dokumentationsbekendtgørelsen (BEK nr. 42 af ) Dokumentationsvejledningen Skønsmæssig ansættelse ved utilstrækkelig dokumentation Bøde ved manglende eller utilstrækkelig dokumentation EUTPD & PATA-dokumentation Dokumentation ifølge OECD Transfer Pricing Guidelines Base Erosion and Profit Shifting (BEPS) OECDs Action Plan on Base Erosion and Profit Shifting Aktionspunkt OECDs White Paper om transfer pricing-dokumentation Side 2

3 10.2 Discussion draft on transfer pricing documentation and Countryby-country reporting Betydning for dansk transfer pricing-praksis Konklusion Kildekritik Litteraturliste Bilag Side 3

4 1. Executive summary The purpose of this thesis has been to lay out the rules concerning the Danish transfer pricing documentation requirements. The taxpayers must prepare and keep written documentation of the prices and terms set for controlled transactions. This written documentation must be submitted at SKATs request and provide a suitable basis for assessing whether the transaction is conducted at arm's length. Concerning the content of the documentation, this requirement is fulfilled by pointing out the relationships corresponding to the parties mentioned in SKL 3 B, stk. 1 in the in-come tax return, and by attaching appendix SKL 3 B, stk. 5, says that the taxpayers must prepare and retain written documentation of how the prices and conditions are set for the controlled transactions. The requirements concerning the content of the documentation are complemented by BEK nr. 42 of and the tax authorities guideline for documentation. The scope of the documentation depends on the scope and complexity of the enterprise and the controlled transactions. The documentation is used to compare the controlled transactions to the marked set price or value. The documentation must contain the following (BEK nr ): Information on the group and its commercial activities Information on the controlled transactions A comparability analysis Information on implementation of the pricing principles A list of any written agreements Small enterprises must only prepare transfer pricing documentation for special transactions. If the taxpayer fails to fulfil the information- and documentation requirements in SKL 3 B sanctions may be issued, for instance in the form of fines. In case the tax payer Side 4

5 fails to provide adequate documentation the tax authorities can make an estimated tax assessment Base erosion and profit shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits disappear for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low. On 19 July 2013 the OECD published an Action Plan on Base Erosion and Profit Shifting ( BEPS Action Plan ). Action 13 in the BEPS Action Plan states that the OECD will develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries, according to a common template. In connection with action 13, OECD published a White Paper and a Discussion Draft. These reports investigate the current state of affairs regarding transfer pricing documentation, and makes suggestions as to how transfer pricing documentation rules might be modified. Action 13 may result in changes in OECD Transfer Pricing Guidelines, which will be directly effective. However the question is if Denmark will be implementing the new guidelines in their domestic law and they probably will, since the Danish law is close connected to the OECD Transfer Pricing Guidelines. The impact will be in form of the master file, the local file and the country-by-country reporting. But the final conclusion is yet to come. Side 5

6 2. Problemstilling Igennem de sidste 20 år har mange lande stillet krav til udarbejdelse af en transfer pricing-dokumentation, og stadigt flere kommer til. Disse øgede krav for at kunne dokumentere koncerninterne transaktioner og skattemyndighedernes generelt øgede fokus på transfer pricing, betyder, at transfer pricing dokumentation er et centralt emne for såvel virksomheder som for skattemyndighederne. Baggrunden for reglerne omkring transfer pricing er, at lande overalt i verden er interesseret i at sikre sig, at de hver især får deres andel af skatteindtægterne. Derfor er transfer pricing i løbet af de seneste år gået hen og blevet et af de mest aktuelle og omtalte emner indenfor international selskabsbeskatning i stort set alle lande i verden. Skattemyndigheder over hele verdenen har derfor øget deres fokus på området og antallet af transfer pricing revisioner er steget væsentligt. Antallet af lande, der indfører dokumentationspligt og bødestraf, samtidig med at der tilføres yderligere ressourcer til kontrollen af transfer pricing, stiger derfor også fra år til år og mange lande har samtidig regler om, at virksomhederne skal udarbejde deltaljeret dokumentation for prisfastsættelsen af virksomhedernes interne transaktioner. I Danmark vedtog man i 1998 transfer pricing lovpakken der blandt andet lovfæstede dokumentationspligt af armslængdeprincippet for selskaber med grænseoverskridende interne transaktioner. Dokumentationskravet har været gældende siden indkomståret Dansk lovgivning har i de seneste år haft et øget fokus på transfer pricing blandt andet som følge af den øgede internationalisering samt, at mindske risikoen for at indkomst uberettiget flyttes til beskatning i lavbeskatningslande. Blandt andet med baggrund heri, har der været et behov for opstramning af lovgivningen omkring dokumentation af kontrollerede transaktioner med videre, som følge heraf blev der i 2005 udarbejdet et udkast til bekendtgørelse om dokumentation af prisfastsættelsen af kontrollerede transaktioner, som i 2006 er offentliggjort ved bekendtgørelse nr. 42 af 24. januar De danske skattemyndigheder har desuden udarbejdet en tilhørende vejledning om transfer pricing; den juridiske vejledning, også kaldet dokumentationsvejledningen. De danske transfer pricing-regler bærer tydeligt præg af at være inspireret af og i overensstemmelse med OECDs Transfer Pricing Guidelines. Side 6

7 OECD udgav den 12. februar 2013 rapporten Addressing Base Erosion and Profit Shifting 1 (den såkaldte BEPS rapport). I juli 2013 udgav OECD Base Erosion and Profit Shifting (BEPS) projektets aktionsplan, som indeholder 15 handlinger/aktioner eller processer med tilhørende tidsplaner, et af aktionspunkterne omhandler en genbehandling af de eksisterende transfer pricing-dokumentationsregler, samt udviklingen af en template til country-by-country (land-for-land) rapportering af indtægter, skatter og økonomisk aktivitet for skat. OECD har i forbindelse med aktionspunkt 13 udgivet et såkaldt White Paper omkring transfer pricing dokumentation, samt et Discussion Draft omkring transfer pricing-dokumentation og country-by-country rapportering. BEPS-projektet siges at være det mest omtalte tranfer pricing-emne i dette årti. Spørgsmålet er dog, hvilken betydning BEPS-projektets aktionspunkt 13 kommer til at have for dansk transfer pricing-praksis. 2.1 Problemformulering Problemstillingen, henleder til den endelige problemformulering: Hvad er de danske regler, vejledninger og lovgivning omkring transfer pricingdokumentation, og hvad går aktionspunkt 13 i OECDs handlingsplan for BEPS ud på, samt hvilken betydning vil dette aktionspunkt have for dansk transfer pricing-praksis? 3. Afgrænsning Denne afhandling vil udelukkende tage udgangspunkt i den danske lovgivning omkring transfer pricing-dokumentationsreglerne. Herunder mere specifikt de love og vejledninger, der ligger på området, samt OECD Transfer Pricing Guidelines. Grunden til at OECD Transfer Pricing Guidelines inddrages er, at den danske lovgivning er udarbejdet på grundlag af denne. Afhandlingen vil som udgangspunkt beskæftige sig med LL 2, SKL 3 B, den juridiske vejledning/ dokumentationsvejledningen, BEK nr. 42 af 24. januar 2006, SKL 1 OECD (2013), Addressing Base Erosion and Profit Shifting, OECD Publishing Side 7

8 14m stk. 3 og og SKL 17 stk. 3. Armslængdeprincippet vil blive gennemgået i opgaven, da SKL 3 B og LL 2 er forbundet med denne, som henholdsvis den formelle og den materielle del af transfer pricing-lovgivningen. PATA og EUTPD vil kort blive belyst, i forhold til fakta omkring transfer pricingdokumentation. Overstående afgræsning er sket ud fra en vurdering af relevans ift. afhandlingens emne. Endvidere bunder den i en prioritering af hhv. hvor bredt og hvor dybt emnet behandles. Her er min vurdering, at en dybdegående behandling af overstående, giver en bedre forståelse for overordnet set, at kunne besvare problemformuleringen. OECDs BEPS-projekt vil blive belyst, men vil ikke blive behandlet i dybden. Afhandlingen tager udgangspunkt i aktionspunkt 13 i BEPS Action plan, i denne forbindelse inddrages OECDs White Paper omkring transfer pricing-dokumentation og OECDs Discussion Draft omkring transfer pricing-dokumentation og land-for-land rapportering, i form af en perspektivering til aktionspunkt 13. Der vil ikke inddrages andet materiale end dette. Opgaven vil ikke tage udgangspunkt i en case indeholdende en multinational koncerns udfordringer ved transfer pricing-dokumentation eller BEPS-projektet. Derimod vil opgaven være en objektiv analyse af de danske transfer pricing-dokumentationsregler, hvor betydningen af BEPS-projektets aktionspunkt 13 vil blive behandlet. Materiale indsamlingen er stoppet den 1. februar 2014, derfor er alle forhold opstået efter denne dato, ikke taget i betragtning i forbindelse med udarbejdelse af opgaven. 4. Metode Opgaven vil overordnet set have en teoretisk tilgangsvinkel, i form af en teoretisk beskrivelse af de danske regler omkring transfer pricing-dokumentation. Dataindsamlingen til opgaven vil primært bestå af kvalitative data, herunder lovgivning, fagrelevante bøger og publikationer. Første del af opgaven indeholder en beskrivelse og behandling af teorien omkring transfer pricing-dokumentation. Der gives indledningsvis en introduktion til transfer Side 8

9 pricing, OECDs Modeloverenskomstens artikel 9, armslængdeprincippet, Ligningsloven 2 og OECDs Transfer Pricing Guidelines. Herefter vil en gennemgang og beskrivelse af gældende dansk lovgivning, retningslinjer og vejledninger omkring transfer pricingdokumentationskrav blive foretaget, samt en gennemgang af OECDs Transfer Pricing Guidelines kapitel V. Opgavens anden og sidste del vil beskæftige sig med OECDs Base Erosion and Profit Shifting (BEPS)-projekt og tilhørende handlingsplan. Aktionspunkt 13 i handlingsplanen, der handler om en revurdering af transfer pricing-dokumentation vil blive gennemgået. Herefter vil jeg inddrage hhv. OECDs White Paper om transfer pricing-dokumentation og Discussion Draft om transfer pricing-dokumentation og land-for-land rapportering. Begge rapporter er skrevet og udgivet i forbindelse med aktionspunk 13 i BEPS handlingsplan. Jeg har inddraget de to rapporter for at forstå hvilke betragtninger der ligger til grundlag for aktionspunkt 13, samt at det vil være relevant at foretage en analyse af de relevante betragtninger fra disse rapporter. Sidst i opgaven vil betydningen af aktionspunkt 13 for dansk transfer pricing-praksis, blive analyseret. Løbende igennem opgaven vil tekst blive suppleret med illustrationer og skemaer, hvor det skønnes relevant, for forståelsen af de beskrevne problemstillinger. Der vil løbende blive inddraget citater, hvor det findes relevant. Der vil blive citeret på både dansk og engelsk. De engelske citater vil hovedsagligt ikke blive oversat til dansk, i det det kan hænde at en del af pointen kan blive tabt i oversættelsen. De planlagte inddragne artikler, lovtekster og vejledninger, samt analyser, vurderes at give det fornødne indsigter til at kunne besvare problemformuleringen. På denne måde vil problemformuleringen kunne besvares, og det vil være muligt at nå en konklusion. Side 9

10 5. Transfer Pricing Transfer pricing er betegnelsen for fastsættelsen af priser eller andre vilkår ved koncerninterne transaktioner. Altså med andre ord, hvilken pris tager virksomheder for varer eller ydelser, når der handles med koncernselskaber eller andre interesseforbundne parter. Udgangspunktet er enkelt, ved opgørelsen af den skattepligtige indkomst skal virksomheder fastsætte priser og andre vilkår efter armslængdeprincippet, hvilket vil sige, at priser og vilkår skal være fastsat i overensstemmelse med, hvad der kunne være opnået mellem uafhængige parter. Ved transfer pricing skal indkomsten beskattes i det land, hvor værdien er skabt, og dermed skal virksomheder oplyse og dokumentere deres kontrollerede transaktioner med hensyn til prisfastsættelsen, netop derfor er den pris der anvendes ved en koncernintern handel afgørende for, hvilke skattebetalinger der ender i hvert af de implicerede lande. Armslængdeprincippet er et grundlæggende princip i relation til transfer pricing. Når der handles på armslængdevilkår, vil det sige, at der handles på vilkår, som uafhængige parter ville anvende, nemlig markedsvilkår. Armslængdeprincippet er defineret i Ligningslovens 2, stk. 1. Der skal udarbejdes dokumentation for, hvorledes priser og vilkår er fastsat for de kontrollede transaktioner. Reglerne om dokumentation for de koncerninterne transaktioner findes i Skattekontrollovens 3 B og 17, stk. 4. Kravene om indholdet er fastlagt i dokumentationsbekendtgørelsen. 2 De danske regler omkring transfer pricing er baseret på OECDs 3 retningslinjer for transfer pricing(oecd Transfer Pricing Guidelines for Multinational Enterprises and Tax Administration). SKATs udgivelser af vejledninger vedrørende oplysnings- og dokumentationspligten på området, ligger ofte tæt op ad OECDs Transfer Pricing Guidelines, da denne indeholder information om dokumentationskravene samt 2 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, OECD er en forkortelse for Organisation for Economic Co-operation and Development (Organisationen for økonomisk samarbejde og udvikling). OECD er en international organisation, grundlagt efter 2. verdenskrig og arbejder for at stimulere økonomisk fremgang og markedsøkonomi mellem de demokratisk regerede medlemslande Side 10

11 forskellige metoder til beregning af den korrekte pris på de koncerninterne transaktioner. OECDs Modeloverenskomstens artikel 9 handler om transfer pricing. Man taler om transfer pricing i forbindelse med indbyrdes forbundne foretagender, det vil sige selskaber og andre juridiske personer, der ejer eller kontrollerer hinanden, eller som ejes eller kontrolleres af de samme personer. Eksempelvis er et moderselskab og et datterselskab indbyrdes forbundne foretagender, ligeledes er to selskaber inden for samme koncern også indbyrdes forbundne foretagender, selv om de ikke umiddelbart ejer hinanden OECDs modeloverenskomst artikel 9 OECD er en forkortelse af Organisation for Economic Co-operation and Development. OECD er en rådgivende økonomisk international samarbejdsorganisation, der arbejder for at stimulere økonomisk fremgang og markedsøkonomi mellem de i dag bestående 34 medlemsstater, der deler en demokratisk og markedsøkonomisk samfundsopfattelse 5. Danmark har været medlem af OECD siden oprettelsen i OECDs modeloverenskomst (OECD Model Tax Convention) er det overordnede udgangspunkt for dobbeltbeskatningsoverenskomster(dbo er) mellem OECD-lande, herunder de fleste danske overenskomster, samt for en stadig større del DBO er mellem lande udenfor OECD. Allokering af indkomst mellem forbundne foretagender reguleres af modeloverenskomstens artikel 9, hvis formål er at beskytte forbundne foretagender mod international dobbeltbeskatning, samt at sikre en rimelig fordeling af beskatningsretten mellem de kontraherende stater. I en dansk oversættelse har artikel 9 følgende ordlyd: stk. 1; I tilfælde, hvor Side 11

12 a) et foretagende i en af de kontraherende stater direkte eller indirekte deltager i ledelsen, kontrollen eller finansieringen af et foretagende i den anden kontraherende stat, eller b) samme personer direkte eller indirekte deltager i ledelsen, kontrollen eller finansieringen af såvel et foretagende i den ene af de kontraherende stater som et foretagende i den anden kontraherende stat, og der i nogle af disse tilfælde mellem de to foretagender er aftalt eller fastsat vilkår vedrørende deres kommercielle eller finansielle forbindelser, som afviger fra de vilkår, som ville være blevet aftalt mellem uafhængige foretagender, kan enhver fortjeneste, som, hvis disse vilkår ikke havde foreligget, ville være tilfaldet et af disse foretagender, men som på grund af disse vilkår ikke er tilfaldet dette, medregnes til dette foretagendes fortjeneste og beskattes i overensstemmelse hermed. 7 stk. 2; I tilfælde, hvor en kontraherende stat til fortjeneste for et foretagende i denne stat medregner - og i overensstemmelse hermed beskatter - fortjeneste, som et foretagende i den anden kontraherende stat er blevet beskattet af i denne anden stat, og de således medregnede fortjenester er fortjenester, som ville være tilfaldet foretagendet i den førstenævnte stat, hvis vilkårene mellem de to foretagender havde været de samme, som ville være blevet aftalt mellem uafhængige foretagender, skal denne anden stat foretage en dertil svarende regulering af det skattebeløb, som er beregnet af disse fortjenester. Ved reguleringen skal der tages hensyn til de øvrige bestemmelser i denne aftale, og de kontraherende staters kompetente myndigheder skal om nødvendigt rådføre sig med hinanden. 8 OECDs modeloverenskomstens artikel 9, stk. 1, angiver således den officielle definition af armslængdeprincippet, giver en general definition af hvornår foretagender anses for forbundne, og regulerer adgangen til at foretage primær korrektion. Definitionen i artikel 9, stk. 1, er ikke nødvendigvis sammenfaldende med definitionen af bestemmende indflydelse i LL 2 og SKL 3 B, og det kan derfor 7 modeloverenskomstens artikel 9, stk. 1, oversættelse fundet i Niels Winter-Sørensen, OECDs modeloverenskomst 2010 med kommentarer. 8 modeloverenskomstens artikel 9, stk. 2, oversættelse fundet i Niels Winter-Sørensen, OECDs modeloverenskomst 2010 med kommentarer. Side 12

13 forekomme, at to foretagender er forbundne efter OECDs modeloverenskomst artikel 9, men ikke efter LL 2 og SKL 3 B. Det kan også forekomme, at to foretagende er forbundne efter lovgivningen i det ene land, men ikke efter lovgivningen i det andet land 9. Modeloverenskomstens artikel 9, stk. 2, omhandler korresponderende korrektioner, hvilket vil sige, at der foretages en korresponderende korrektion hos den interesseforbundne part svarende til den nedsættelse, hhv. forhøjelse, der er en følge af den primære korrektion af den anden part 10. Kort sagt når der i et land foretages, i overensstemmelse med artikel 9 stk. 1, en regulering af indkomsten i et selskab for at bringe priser og vilkår i overensstemmelse med armslængdeprincippet, skal det andet land foretage tilsvarende justeringer af beskatningen af indkomsten. Dette forudsætter dog, at det andet land skal være enig i det første lands anvendelse af armslængdeprincippet. Skulle der alligevel opstå dobbeltbeskatning for skatteyderen, vil de involverede lande være forpligtet efter modeloverenskomstens artikel 25 til at indgå forhandlinger om en ophævelse af dobbeltbeskatningen(map - Mutual Agreement Procedures), hvis skatteyder anmoder herom. 11 Grundlaget for at fastsætte transaktioner på armslængde, tager således afsæt i modeloverenskomst artikel 9. Dog bør denne ikke tolkes som en konkret international lovgivning, men derimod en implicit anvisning til skattemyndighederne. Som instruks redegør modeloverenskomstens artikel 9 for, at skattemyndighederne bør foretage fiksering af en indkomst, hvis priserne afviger fra dem der indgås mellem uafhængige parter, også selvom der egentlig ikke er sket en egentlig fakturering. LL 2, der som nævnt tidligere redegør for armslængdeprincippet, giver skattemyndigheder beføjelser til at foretage fikseringer, hvor armlængdeprincippet ikke vurderes overholdt. 9 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, De involverede lande er forpligtet til at forsøge at nå til enighed, men der er ikke nogen forpligtelse til at nå til enighed, jf. OECDs Modeloverenskomstens Art.25, stk.2 Side 13

14 Retningslinjer for tolkningen og anvendelsen af armslængdeprincippet i modeloverenskomstens artikel 9 og dermed også for armslængdeprincippet i LL 2, stk. 1, gives i OECDs Transfer Pricing Guidelines. 5.2 Armslængdeprincippet Armslængdeprincippet er den internationale standard, som OECD landene er blevet enige om skal være grundlaget for at fastsætte og vurdere koncerninterne afregningspriser fra et skatteretligt synspunkt. OECDs grundlæggende definition af armslængdeprincippet findes i OECDs modeloverenskomst artikel 9, stk. 1 om forbundne foretagender og er defineret på følgende måde: Såfremt der mellem de pågældende foretagender er aftalt eller fastsat vilkår vedrørende deres kommercielle eller finansielle forbindelser, der afviger fra de vilkår, som ville være blevet aftalt mellem uafhængige foretagender, kan enhver indkomst, som, hvis disse vilkår ikke havde foreligget, ville være tilfaldet et af disse foretagender, men som på grund af disse vilkår ikke er tilfaldet dette foretagende, medregnes til dette foretagendes indkomst og beskattes i overensstemmelse hermed. 12 Armslængdeprincippet indeholder derfor princippet om, at parter, der er interesseforbundne, skal handle med hinanden på en sådan måde, at det afspejler, hvad uafhængige parter må antages at ville have gjort ved handel med tilsvarende varer eller tjenester, under tilsvarende omstændigheder og på tilsvarende vilkår. Armslængdeprincippet er derfor også, ifølge overstående, med til at sikre, at der ikke foretages transaktioner mellem koncerninterne parter, som ikke ville have fundet sted mellem ikke-koncerninterne parter, samt at det er med til at sikre, at der ikke foretages skattemæssige forskydninger mellem lande, hvor skattefordele eller ulemper optimeres ved at korrigere koncerninterne transaktioner og herved flytte 12 modeloverenskomstens artikel 9, stk. 1, oversættelse fundet i Niels Winter-Sørensen, OECDs modeloverenskomst 2010 med kommentarer. Side 14

15 over- eller underskud til de lande, hvor det vil være mest fordelagtigt for koncernen at placere et eventuelt overskud eller underskud. Vejledningen for hvorledes en koncern fastsætter transaktioner, så disse imødekommer armslængdeprincippet, findes imidlertid i OECDs Transfer Pricing Guidelines. OECDs Transfer Pricing Guidelines redegør, jf. artikel 9 i modeloverenskomsten, for hvordan skattemyndigheder er berettiget til at foretage korrektioner, hvis det kan konkluderes, at transaktioner ikke er foretaget på armslængdevilkår. Såfremt skattemyndighederne vurderer at transaktionerne ikke er foretaget på armslængde, har SKAT beføjelse til at foretage fikseringer af koncerninterne transaktioner, hvilket vil sige at SKAT justere vilkårene til markedsniveau. Dette kaldes indkomstfiksering 13. I OECD Transfer Pricing Guidelines pkt. 1.3 står det skrevet således: OECD member countries have agreed that for tax purposes the profits of associated enterprises may be adjusted as necessary to correct any such distortions and thereby ensure that the arm s length principle is satisfied. Derved kan indkomst der reelt set ikke har fundet sted, alligevel blive beskattet. I modeloverenskomstens artikel 9 beskrives denne fiksering indirekte således: Profits not accrued they may be taxed. 14 I dansk lovgivning er armslængdeprincippet stadfæstet i ligningslovens 2, stk. 1. Ligningslovens 2 er dog mere eksplicit end de vejledninger der er udstykker af OECD, da der her er tale om konkret lovtekst Definition af armslængde En transaktion på armslængde er, som beskrevet tidligere, en transaktion der er foretaget på markedsvilkår. Når en transaktion er foretaget på markedsvilkår betyder det, at transaktionen også ville have fundet sted mellem parter der var uafhængige, altså parter der kun har handlet for at varetage sine egne interesser. Mellem 13 Når to indbyrdes forbundne foretagender er hjemmehørende i hvert sit land, og de to foretagender har handlet eller lavet finansieringsaftaler indbyrdes på vilkår, der afviger fra, hvad to uafhængige foretagender, ville have aftalt, er der basis for en fiksering/regulering. Hver skattemyndighed/land kan regulere fortjenesten i det foretagende, som er hjemmehørende i det pågældende land. Reguleringen skal gå ud på at stille foretagendet, som om det havde handlet eller lavet finansieringsaftaler med en uafhængig jf s. 12 Side 15

16 uafhængige parter vil køber og sælger have modstridende interesser, i det henseende køberen ønsker at opnå den mest fordelagtige pris for det købte, mens at sælgeren ønsker at få mest muligt for det solgte. Ved denne måde fastsættes prisen, som et kompromis mellem den pris køber og sælger sammen kan acceptere, og dette resultere i en markedspris. Markedsprisen kan dog variere på grund af en række faktorer, såsom udbud, efterspørgsel, trends, geografiske forhold med videre. Derfor vil markedsprisen oftest strække sig over et større eller mindre interval, alt afhængig af den vare eller ydelse der handles med. Nedenstående eksempel illustrere hvordan to transaktioner for, eksempelvis kaffebønner, guld eller et andet produkt der er et totalt sammenligneligt produkt (ofte commodities - råvarer/handelsvarer), der handles mellem to eksterne parter, kunne have fundet sted. Transaktionen mellem Virksomhed A og Virksomhed B er pr. definition en transaktion der er foretaget på markedsvilkår, idet de to virksomheder ikke er interesseforbundne, og derved foretages transaktionen kun på baggrund af egne interesser. Side 16

17 Transaktionen mellem datterselskab og moderselskab, er en transaktion mellem to koncerninterne selskaber. Denne transaktion kan være indgået for at tilgodese enten købs- eller salgsselskabet. Som eksemplet illustrerer, kan transaktionen mellem datterselskabet og moderselskabet give en indikation om, at der ikke er handlet på markedsvilkår, da prisen per enhed er væsentligt højere end prisen der er indgået mellem de to uafhængige parter. I det ovenstående illustrerede eksempel, hvor der er foretaget en sammenligning til en transaktion mellem uafhængige parter, skal det selvfølgelig bemærkes at en sammenligning kun kan finde sted såfremt der er tale om varer, ydelser eller lån, der er sammenlignelige. For de respektive parter i den koncerninterne transaktion, er det ikke altid ligetil at vurdere om der handles på armslængdevilkår. Som oftest er prisfastsættelsen mere kompleks end som så, og der er ikke altid et entydigt svar, på hvad den korrekte markedspris er, da denne, som nævnt tidligere, ofte spænder over et interval. Armslængdeprincippet bygger derfor på en holistisk tilgang, hvor konkrete omstændigheder skal vurderes enkeltvis. Som oftest vil det være en vurderingssag om en transaktion er foretaget på armslængde eller ej. I transfer pricing sager vil det være muligt, at argumentere for adskillige faktorer, der kunne have indflydelse i pris og vilkår, som den koncerninterne transaktion er foretaget på baggrund af. Derfor er det vigtigt at få udformet en transfer pricing-dokumentation, der lever op til skattemyndighedernes krav om indhold. 5.3 Ligningsloven 2 Ligningsloven 2 (LL 2) blev indført ved lov nr. 432 af , af bestemmelsen følger det, at foreligger der en kontrolleret transaktion som defineret i LL 2, stk. 2 15, mellem de rets subjekter, der er angivet i LL 2, stk. 1 16, skal vilkårene for handelsmæssige eller økonomiske transaktioner fastsættes i overensstemmelse med, hvad der kunne være opnået, hvis transaktionen var afsluttet mellem uafhængige 15 Se bilag 1 LL 2 16 Se bilag 1 LL 2 Side 17

18 parter. Opfyldes disse kriterier ikke, åbner bestemmelsen en adgang til en transfer pricing-korrektion fra skattemyndighedernes side 17. Bestemmelsen gælder for indenlandske og grænseoverskridende transaktioner og gælder alle transaktionstyper. Loven blev vedtaget efter, at Højesteret ved sin dom (TfS 1998, 199 H) havde skabt usikkerhed om, hvorvidt nogle armslængdekorrektioner kunne foretages med henvisning til statsskattelovens regler. Formålet med lovfæstelsen af armslængdeprincippet var at tilvejebringe en retstilstand svarende til den, man indtil da havde forudsat var gældende 18. Armslængdeprincippet er i Danmark indarbejdet i LL 2, stk. 1: Skattepligtige, 1) hvorover fysiske eller juridiske personer udøver en bestemmende indflydelse, 2) der udøver en bestemmende indflydelse over juridiske personer, 3) der er koncernforbundet med en juridisk person, 4) der har et fast driftssted beliggende i udlandet, 5) der er en udenlandsk fysisk eller juridisk person med et fast driftssted i Danmark, eller 6) der er en udenlandsk fysisk eller juridisk person med kulbrintetilknyttet virksomhed omfattet af kulbrinteskattelovens 21, stk. 1 eller 4, skal ved opgørelsen af den skatte- eller udlodningspligtige indkomst anvende priser og vilkår for handelsmæssige eller økonomiske transaktioner med ovennævnte parter i nr. 1-6 (kontrollerede transaktioner) i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter 19. Alle ovennævnte seks punkter er skattepligtige, der er en del af en koncern eller har en anden fælles interessesfære. Disse seks typer skattepligtige betegnes alle som at kunne yde kontrollerede transaktioner med en modpart. Derfor skal en transaktion foretaget indenfor en koncern, mellem ovenstående skattepligtige, imødekomme LL 2 om krav om armslængde. 17 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, LBK nr. 405 af 22/04/2013, Side 18

19 LL 2 er, udover fastlæggelse af koncerndefinitionen, en lovfæstelse af armslængdeprincippet, hvilket er en vigtig lovhjemmel med hensyn til skattemyndighedernes adgang til at foretage korrektioner af priser ved transaktioner mellem interesseforbundne parter. Med LL 2 er skattekontrolbestemmelserne i SKL 3 B derfor suppleret med en egentlig materiel hjemmel til at foretage korrektion af kontrollerede transaktioner, hvorved også legitimiteten til at anvende OECDs Transfer Pricing Guidelines i dansk ret øges, da dansk ret ved LL 2 har anerkendt og implementeret OECDs armslængdeprincip. Således skal armslængdeprincippet i LL 2 fortolkes i overensstemmelse med OECDs modeloverenskomst OECDs Transfer Pricing Guidelines The Organisation for Economic Co-operation and Development (OECD) har været stærkt medvirkende til at opnå en fælles international forståelse for transfer pricing. I 1979 udsendte organisationen første udkast til transfer pricing guidelines med titlen Transfer Pricing and Multinational Enterprises den indeholdte internationale retningslinjer for skattemæssig regulering af koncerninterne transaktioner, herunder prisfastsættelsesmetoder. Senere hen har rapporten skiftet navn til Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (herefter OECDs Transfer Pricing Guidelines), og er med tiden blevet hjørnestenen i transfer pricing-skattelovgivningen i de fleste lande i verden. Alle medlemslandene af OECD og en lang række andre lande har udarbejdet deres nationale transfer pricing-lovgivning ud fra OECDs retningslinjer. Derfor kan man sige, at der eksisterer overordnede retningslinjer for transfer pricing, hvor det er op til de nationale myndigheder i de enkelte lande, om de vil følge. De danske transfer pricingregler læner sig, som sagt, i vid udstrækning op ad OECDs retningslinjer. OECDs Transfer Pricing Guidelines er overordnede retningslinjer vedrørende prisfastsættelsen af grænseoverskridende transaktioner og har det formål at skabe en ensartet praksis på dette område. Den indeholder alene anvisninger og anbefalinger. Derfor er rapportens retskildeværdi ikke af formelt bindende karakter. Transfer 20 SKAT, Den juridiske vejledning, afsnit C.D Side 19

20 pricing-problemet skal således fortsat vurderes med udgangspunkt i den nationale transfer pricing-lovgivning. I 2010 blev en ny version af OECDs "Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations" godkendt versionen er den første store opdatering af OECDs Transfer Pricing Guidelines siden den første udgivelse i Rækkevidden eller betydningen af armslængdeprincippet i LL 2, stk. 1, er ikke ændret med den seneste udgave af OECDs Transfer Pricing Guidelines. Der er i stedet tale om en præcisering og uddybning af armslængdeprincippet og den måde, hvorpå princippet anvendes i praksis. The separate entity approach Virkeligheden er den, at man som virksomhed er en del af en gruppe/virksomhed og her skal man opfatte sig selv som Stand-alone-basis. Altså man skal agere som man var en fuldstændig uafhængig part, hvilket vil sige at alle enheder i koncernen skal behandles som havde der været salg til en separat enhed jf. OECDs Transfer Pricing Guidelines punkt 1.6: the arm s length principle follows the approach of treating the members of an MNE group as operating as separate entities rather than as inseparable parts of a single unified business. Dette betyder, at der indenfor en koncern med kontrollerede transaktioner, ikke må forekomme transaktioner for at tilgodese et koncernselskab. Inden for koncernen skal selskaberne imellem derfor behandles, som de havde været eksterne selskaber. Dette omfatter ikke alene priserne mellem enhederne, men også de vilkår der handles på, betalingsfrister med videre. SKAT er glad for dette princip, da en uafhængig part aldrig ville acceptere et tab. 6. De danske regler om transfer pricing-dokumentation Det er fastsat ved lov at der skal udarbejdes transfer pricing-dokumentation. Loven blev indført i 1998 og har været gældende fra og med indkomståret Forud for 21 Transfer Pricing Hvordan fastsættes og dokumenteres prisen, når virksomheder handler internt - Birgitte Bundgaard, Jesper Wang-Holm, Lene Nielsen, Told- og Skattestyrelsen & Dansk Industri Side 20

21 1998 var armslængdeprincippet kun indarbejdet i den danske skattelovgivning på et overordnet niveau. De gældende danske regler omkring transfer pricing dokumentation findes primært i SKL 3 B stk. 1 og stk. 5 om hhv. oplysnings- og dokumentationspligten, den juridiske vejledning, Dokumentationsbekendtgørelsen (BEK nr. 42 af 24. januar 2006) og SKL 17 stk. 3. I henhold til den danske lovgivning skal armlængdeprincippet anvendes ved transaktioner med danske og udenlandske selskaber og faste driftssteder. Helt overordnet skal skatteyder indlevere særlig information om transfer pricing i forbindelse med selvangivelsen, samt udarbejde og opbevare transfer pricingdokumentation. Hvis den skattepligtige ikke lever op til kravene om udarbejdelse af en dokumentation, kan det medføre bøder, og skattemyndighederne kan foretage en skønsmæssig ansættelse af den skattepligtige indkomst 22. Armslængdeprincippet er fastlagt i LL 2. Herefter skal koncernselskaber anvende priser og vilkår for de koncerninterne handler som kunne være opnået mellem uafhængige parter. Reglerne for oplysningspligten samt dokumentationspligten er fastlagt i SKL 3 B. Oplysningspligten opfyldes ved udfyldelse og indsendelse af det såkaldte 3B-skemaet (blanket ) og reglerne for opfyldelse af dokumentationspligten er beskrevet i BEK nr. 42 af , samt i dokumentationsvejledningen. Heri står der også skrevet at en transfer pricing-dokumentation kan udarbejdes efter EU transfer pricing-dokumentation (EUTPD) og i følge BEK nr. 582 af kan transfer pricing-dokumentationen udarbejdes efter nogle fælles retningslinjer (PATA) 23. Den danske transfer pricing lovgivning er udarbejdet med udgangspunkt i og i overensstemmelse med OECDs Transfer Pricing Guidelines. Dansk lovgivnings primære omtale af transfer pricing findes i LL 2 vedr. armslængdeprincippet og i SKL 3B vedr. oplysnings-og dokumentationspligten 24. Den danske oplysnings- og dokumentationspligt blev i 1998 implementeret i SKL 3 B, primært af hensyn til den 22 SKL 3 B stk. 9, se bilag Henholdsvis 3 B stk. 1 og stk. 5, se bilag 2 Side 21

22 stigende transfer pricing fokus og for at sikre, at dansk ret var i overensstemmelse med OECDs anbefalinger. Skattepligtige, der har kontrollerede transaktioner, skal udarbejde og opbevare transfer pricing-dokumentation 25 for både indenlandske og grænseoverskridende kontrollede transaktioner. 26 Dokumentationskravet gælder også faste driftssteder. Det grundlæggende krav til transfer pricing-dokumentationen er, at den skal dokumentere, hvordan priser, betingelser og vilkår i forbindelse med kontrollede transaktioner fastsættes og at de kontrollede transaktioner er gennemført i overensstemmelse med armslængdeprincippet. Skattekontrollovens 3 B, stk. 5 27, kræver, at der udfærdiges og opbevares skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for de kontrollerede transaktioner. Dem, der er omfattet af bestemmelsen, er med enkelte undtagelser, de samme som dem, der er omfattet af ligningsloven 2, det vil sige koncernforbundne selskaber. Jf. SKL 3 B, stk. 6, er de små og mellemstore selskaber til en vis grad fritaget for dokumentationskravene. Fritagelsen omfatter Skattepligtige, der alene eller sammen med koncernforbundne virksomheder har under 250 beskæftigede og enten har en årlig samlet balance på under 125 mio. kr. eller en årlig omsætning på under 250 mio. kr. Den skriftlige dokumentation skal på begæring forelægges SKAT og skal jf. SKL 3 B stk. 5: være af en sådan art, at den kan danne grundlag for en vurdering af, om priser og vilkår er fastsat i overensstemmelse med, hvad der kunne være opnået mellem uafhængige parter. Dokumentationsbekendtgørelsen opstiller de indholdsmæssige krav til en sådan dokumentation. Kravene er ganske omfattende, og SKAT har derfor udarbejdet en vejledning 28, som på nogle områder giver en god vejledning i, hvordan dokumentationsbekendtgørelsens krav kan imødekommes. Dokumentations- 25 Dokumentationen kan udarbejdes på dansk, svensk, norsk eller engelsk jf. dokumentationsbekendtgørelsen (BEK nr. 42 af ) 2, stk. 3 se bilag 4. Dokumentationen skal opbevares i 5 år 26 Skattekontrollovens 3 B se bilag 2 27 Se bilag 2 SKL 3 B 28 SKATs Juridiske Vejledning , kap. C.D. 11 om transfer pricing Side 22

23 vejledningen er endvidere SKATs udtryk for en fyldestgørende transfer pricingdokumentation. Til bestemmelserne knytter sig SKL 17, stk. 3 29, der indeholder hjemmel til at pålægge bøder, hvis transfer pricing-dokumentationen indsendes for sent eller ikke er fyldestgørende. Det er, som nævnt, således, at dansk praksis bygger på OECDs Transfer Pricing Guidelines. De danske transfer pricing-dokumentationsreglers formål er at øge SKATs muligheder for at sikre korrekt prisfastsættelse og dermed korrekt opgørelse af den skattepligtige indkomst ved koncerninterne transaktioner. I den danske lovgivning er det beskrevet helt tydeligt, hvad formålet med dokumentation er, der står nemlig helt klart, at man skal dokumentere for at vise at man handler på armslængde jf. LL Skattekontrolloven 3 B Ved lov nr. 131 af 25. februar 1998 blev Skattekontrollovens 3 B (SKL 3 B), om udvidet selvangivelsespligt og pligt til at udfærdige og opbevare skriftlig dokumentation for priser og vilkår for koncerninterne transaktioner, indsat i skattekontrolloven. Siden indførelsen af loven er der kommet mere fokus på transfer pricing generelt, samt relaterede sager, både i Danmark og i udlandet. Indførelsen af loven medførte desuden at danske skattemyndigheder fik retten til skønsmæssig ansættelse af den skattepligtige indkomst, såfremt at dokumentationen er mangelfuld eller der slet ingen dokumentation foreligger. De danske regler for håndhævelse af transfer pricing findes, blandt andet i SKL 3 B i form af oplysningspligten i stk. 1 og dokumentationspligten i stk. 5. Herigennem har skattemyndighederne mulighed for at vurdere, hvorvidt armslængdeprincippet i LL 2 er overholdt. Derfor var formålet med lovforslaget også at øge skattemyndighedernes mulighed for at sikre korrekt prisfastsættelse og dermed korrekt opgørelse af den skattepligtige indkomst ved koncerninterne transaktioner på tværs af landegrænserne 29 Se bilag 5 - SKL 17, stk. 3 Side 23

24 SKL 3 B, stk. 1, angiver hvilke selskaber der er omfattet af pligten til i selvangivelsen at afgive oplysninger om art og omfang af kontrollerede transaktioner (oplysningspligten): SKL 3 B, stk. 1: Skattepligtige, 1) hvorover fysiske eller juridiske personer udøver en bestemmende indflydelse, 2) der udøver en bestemmende indflydelse over juridiske personer, 3) der er koncernforbundet med en juridisk person, 4) der har et fast driftssted beliggende i udlandet, 5) der er en udenlandsk fysisk eller juridisk person med et fast driftssted i Danmark, eller 6) der er en udenlandsk fysisk eller juridisk person med kulbrintetilknyttet virksomhed omfattet af kulbrinteskattelovens 21, stk. 1 eller 4, skal i selvangivelsen afgive oplysninger om art og omfang af handelsmæssige eller økonomiske transaktioner med ovennævnte parter i nr. 1-6 (kontrollerede transaktioner). Med juridiske personer i nr. 1 og stk. 3 sidestilles selskaber og foreninger m.v., der efter danske skatteregler ikke udgør et selvstændigt skattesubjekt, men hvis forhold er reguleret af selskabsretlige regler, en selskabsaftale eller en foreningsvedtægt. 1, stk. 2, finder tilsvarende anvendelse. Koncernforbundne juridiske personer defineres i SKL 3 B stk som forstås juridiske personer, hvor samme kreds af selskabsdeltagere har bestemmende indflydelse, eller hvor der er fælles ledelse Den bestemmende indflydelse er defineret ved, at der direkte eller indirekte ejes minimum 50 pct. af aktiekapitalen, eller at der direkte eller indirekte rådes over minimum 50 pct. af stemmerettighederne jf. SKL 3 B stk En juridisk eller fysisk person anses for udenlandsk, hvis personen er hjemmehørende i en fremmed stat, Færøerne eller Grønland, herunder efter bestemmelserne i en dobbeltbeskatningsoverenskomst, jf. 3 B, stk. 4. Det lovmæssige grundlag for dokumentationspligten og hvad der skal udformes af dokumentation, findes i SKL 3 B, stk. 5, som suppleres af SKL 3 B, stk. 6. Af SKL 3 B stk. 5, fremgår det, at det er skattemyndighederne, der fastsætter de nærmere 30 Se bilag 2 SKL 3 B 31 Se bilag 2 SKL 3 B Side 24

25 regler for indholdet af informationen. Dette har resulteret i Dokumentationsbekendtgørelsen nr. 42 af 24. januar Som vejledning i, hvordan lovgivning og bekendtgørelse skal fortolkes, har skattemyndighederne i 2006 udgivet Transfer Pricing, kontrollerede transaktioner, dokumentationspligt, som i dag betegnes som SKATs juridiske vejledning eller dokumentationsvejledningen. SKL 3 B begrænser dokumentationspligten for mindre virksomheder, til at omfatte visse kontrollerede transaktioner. De størrelsesgrænser, som er afgørende for om virksomheden falder under undtagelse eller ej, er defineret i SKL 3 B stk. 6 & stk SKL 3 B, stk. 6: Skattepligtige, der alene eller sammen med koncernforbundne virksomheder, jf. stk. 7, har under 250 beskæftigede og enten har en årlig samlet balance på under 125 mio. kr. eller en årlig omsætning på under 250 mio. kr Derfor er der ingen dokumentationspligt for virksomheder, som på konsolideret basis har færre end 250 ansatte, og enten har en årlig samlet balance på under 125 mio. kr. eller en årlig omsætning på under 250 mio. kr. De virksomheder, der opfylder overstående krav, betegnes som mindre virksomheder og er jf. SKL 3 B stk. 6, alene dokumentationspligtige for kontrollerede transaktioner med: 1) fysiske og juridiske personer, der er hjemmehørende i en fremmed stat, som ikke har en dobbeltbeskatningsoverenskomst med Danmark og som samtidig ikke er medlem af EU eller EØS. 2) et fast driftssted, der er beliggende i en fremmed stat, der ikke har en dobbeltbeskatningsoverenskomst med Danmark, og som samtidig ikke er medlem af EU eller EØS, og 3) et fast driftssted, der er beliggende i Danmark, forudsat at den skattepligtige, jf. stk. 1, nr. 5, er hjemmehørende i en fremmed stat, der ikke har en dobbeltbeskatningsoverenskomst med Danmark, og som samtidig ikke er medlem af EU eller EØS. SKAT kan efter SKL 3 B, stk. 8 34, pålægge virksomheder omfattet af dokumentationspligten i SKL 3 B (fuld eller begrænset dokumentationspligt) at indhente en revisor-erklæring om transfer pricing-dokumentationen. Revisoren skal erklære, hvorvidt revisor ved det udførte arbejde er blevet opmærksom på forhold, 32 Se bilag 4 Dokumentationsbekendtgørelsen (BEK nr. 42 af 24. januar 2006) 33 Se bilag 2 SKL 3 B 34 Se bilag 2 SKL 3 B Side 25

26 der giver anledning til at konkludere, at den transfer pricing-dokumentation, som er indsendt til SKAT, ikke giver et retvisende billede af virksomhedens fastsættelse af priser og vilkår for koncerninterne transaktioner. Revisorens erklæring er ikke bindende for SKATs vurdering af, om virksomhedens priser og vilkår er fastsat i overensstemmelse med armslængdeprincippet 35. Fristen for indsendelse af erklæringen er mindst 90 dage regnet fra pålæggets datering. Indførelsen af muligheden for at kunne kræve en revisorerklæring skal ses som et ekstra kontrolelement, som samtidig giver muligheden for at opnå en større grad af sikkerhed for, at forholdende er i roden i forhold til overholdelses af armslængdeprincippet. 36 Jf. 3 B, stk. 9: Såfremt den skattepligtige ikke har udarbejdet dokumentation efter stk. 5 eller stk. 6 eller indsendt erklæring efter stk. 8, finder 5, stk. 3, anvendelse, for så vidt angår de kontrollerede transaktioner. Den skattepligtige indkomst vedrørende de kontrollerede transaktioner kan herefter fastsættes skønsmæssigt. 6.3 Oplysningspligten De formelle regler om oplysningspligten findes i SKL 3 B, stk. 1, som indebærer, at den skattepligtige på selvangivelsen og uden særskilt anmodning, skal afgive oplysninger om art og omfang af de handelsmæssige og økonomiske transaktioner med selskaber, hovedaktionærer, faste driftssteder med videre, der opfylder kravet om bestemmende indflydelse. Der er alene tale om summariske oplysninger og dette foregår i praksis via udfyldelse, hvor bl.a. arten af de kontrollerede transaktioner skal angives ved afkrydsning for hver enkelt transaktions art indenfor en række af de forud definerede intervaller, og indsendelse af blanket Kontrollede Transaktioner, også kaldet 3B-skemaet, som er et særligt bilag til selvangivelsen 37. Skemaet vil blive belyst senere i dette afsnit. 35 Den juridiske vejledning, C.D , 36 Lovforslag nr. L 173, s. 9, fremsat den 25. april 2012 af daværende skatteminister(thor Möger Pedersen). 37 Se bilag 3 3B-skemaet/blanket Side 26

27 Dermed er oplysningspligten en obligatorisk del af selvangivelsespligten. Der gælder en minimumsgrænse på 5 mio. kr. af de samlede kontrollerede transaktioner, hvorunder selskabet er fritaget fra at indlevere blanketten 38. På denne baggrund vurderer skattemyndighederne, om de kontrollerede transaktioner er foretaget på armslængdevilkår eller om eventuelle korrektioner skal finde sted. Hvis oplysningspligten ikke bliver overholdt, kan skattemyndighederne ved hjælp af bøder og skattetillæg tilskynde til, at oplysningspligten overholdes jf. SKL 5, stk. 1 og Endvidere skal der ved kontrollerede transaktioner udarbejdes dokumentation for hvorledes priser og vilkår er fastsat. Kravene til indholdet af dokumentationen er fastlagt i dokumentationsbekendtgørelsen (BEK nr. 42 af ) 40, som vil blive gennemgået senere i denne afhandling. Formålet med oplysningspligten er, at give skattemyndighederne de nødvendige informationer om faste driftssteder, koncernrelationer og arten og omfanget af transaktionerne. Skattemyndighederne vil få nemmere ved at vurdere, om de koncerninterne transaktioner er sket på armslængdevilkår og i overensstemmelse med retningslinjerne i OECDs Transfer Pricing Guidelines på dette grundlag. Blanket / B skemaet 41 Blanketten hedder og for henholdsvis den danske og engelske version og kan kun rekvireres på SKATs hjemmeside 42. Oplysningsskemaet skal udfyldes af såvel fysiske som juridiske personer og omfatter både udenlandske og danske kontrollerede transaktioner som har fundet sted i indkomståret. Det er uden betydning om skatteyderen kun har været omfattet af bestemmelsen i SKL 3B en del af eller hele indkomståret. Blanket kaldes også for 3B-skemaet, og det indeholder oplysninger om art og omfang af koncernens kontrollerede transaktioner. Blanketten skal udfyldes, hvis den skattepligtige har haft kontrollerede transaktioner for mere end 5 mio. kr. i indkomståret, og blanketten skal indsendes som bilag sammen med selvangivelsen se også bilag 3 3B-skemaet/blanker Se bilag 2 SKL 3 B 40 Se bilag 4 Dokumentationsbekendtgørelsen (BEK nr. 42 af 24. januar 2006) 41 Se bilag 3 3B-skemaet/blanket Side 27

28 På bilagets side 1 skal der oplyses følgende 43 : hvorvidt den skattepligtige udøver bestemmende indflydelse over juridiske personer eller har et fast driftssted i udlandet, hvorvidt den skattepligtige er underlagt bestemmende indflydelse fra fysiske eller juridiske personer eller er en udenlandsk fysisk eller juridisk person med et fast driftssted i Danmark, hvorvidt den skattepligtige på anden måde er koncernforbundet med en juridisk person hvorvidt den skattepligtige er omfattet af SKL 3 B, stk. 6 den skattepligtiges hovedaktivitetsområde, antal enheder, der har været kontrollerede transaktioner med, opdelt i danske og udenlandske enheder henholdsvis inden og uden for EU/EØS, samt andelen heraf som er sambeskattede. Se nedenstående billede, for hvordan skemaet ser ud for ovenstående punkter 43 Se bilag 3 3B-skemaet/blanket Side 28

29 På bilagets side 1-2 findes der en vejledning, med 33 punkter, i udfyldelsen af de enkelte punkter på bilaget 44. På bilaget side 3 skal arten af de kontrollerede transaktioner angives ved afkrydsning for hver enkelt transaktionsart indenfor intervaller, se nedenstående billede: Ved specifikationen af omfanget af de kontrollede transaktioner for de 33 prædefinerede transaktionstyper, henviser de 21 til resultatopgørelsen og de øvrige 12 henviser til balancen 45. Med udvidelse af selvangivelsen med 3B-skemaet har skattemyndighederne fået et bedre grundlag til vurdering af art og omfang af selskabers kontrollerede transaktioner, og dette kan give en indikation af, hvor der eventuelt kan være tale om transaktioner med bl.a. skattelylande. 44 Se bilag 3 3B-skemaet/blanket Se bilag 3 3B-skemaet/blanker Side 29

30 6.4 Dokumentationspligten Dokumentationspligten finder i dansk lovgivning hjemmel i SKL 3 B stk. 5 & stk. 6. Dokumentationen skal ifølge loven være tilstrækkelig til at kunne danne baggrund for en vurdering af, om priser, vilkår og betingelser for transaktioner er foretaget på armslængdevilkår i overensstemmelse med, hvad uafhængige parter ville kunne have opnået. Lige præcis dette er omtalt i SKL 3 B stk. 5; De selvangivelsespligtige skal udfærdige og opbevare skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for de kontrollerede transaktioner, jf. dog stk. 6. Den skriftlige dokumentation skal på told- og skatteforvaltningens begæring forelægges denne og skal være af en sådan art, at den kan danne grundlag for en vurdering af, om priser og vilkår er fastsat i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter. SKL 3 B stk. 5 består altså her af to led, for det første skal dokumentation omfatte priser og vilkår, hvor den skattepligtige skal udfærdige og opbevare skriftlig dokumentation for, hvordan priser og vilkår er fastsat i kontrollerede transaktioner. For det andet skal skattemyndighederne ud fra denne beskrivelse kunne vurdere, om transaktionerne er opgjort efter armslængdeprincippet. Udover det skal den skriftlige dokumentation på SKATs begæring forelægges denne, dvs. at dokumentationen, som skal udfærdiges og opbevares af den skattepligtige, skal sendes til SKAT, hvis SKAT vel at mærke, beder om det. Derfor skal dokumentation altså ikke sendes up-front. Denne dokumentation kan skattemyndighederne så anmode om med en frist for fremsendelse på 60 dage. 46 Ud fra denne formulering af lovgivningen, findes der altså intet konkret tidspunkt for, hvornår dokumentationen skal være udformet, men blot en henvisning til at fristen for fremsendelse, og ikke udarbejdelse, er 60 dage. 46 jf. BEK. nr. 42 af 24. januar 2006, 2, stk. 4 - Se bilag 4 Side 30

31 For databaseundersøgelser er der fremsat en frist på minimum 60 dage for udarbejdelse af dokumentationen i forbindelse med databaseundersøgelsen jf. SKL 3 B, stk : Skriftlig dokumentation i form af databaseundersøgelser skal alene udarbejdes, såfremt told- og skatteforvaltningen anmoder herom, og med en frist på minimum 60 dage. Denne frist vedrører altså udelukkende databaseundersøgelser og ikke den generelle dokumentation, der skal udarbejdes uafhængigt heraf. Jf. SKL 3 B, stk. 5, findes der derfor ingen yderligere tilnærmelse for, hvornår dokumentationen skal udarbejdes, men blot en henvisning til, at den skal fremsendes på skattemyndighedernes begæring. Omfattet af dokumentationspligten er skattepligtige, jf. SKL 3 B stk. 1, der a) kontrolleres af fysiske eller juridiske personer eller b) kontrollerer juridiske personer eller c) er koncernforbundet med en juridisk person 48, d) har et fast driftssted beliggende i udlandet eller e) er en udenlandsk fysisk eller juridisk person med et fast driftssted i Danmark. Bestemmelsen omfatter således skattepligtige til Danmark. Det kan både være skattepligtige underlagt fuld eller begrænset skattepligt, og de skattepligtige kan være såvel fysiske som juridiske personer 49. Som udgangspunkt skal alle skattepligtige omfattet af 3B, stk. 1, udarbejde dokumentation for samtlige kontrollerede transaktioner, som ikke i omfang og hyppighed anses for uvæsentlige jf. SKL 3 B, stk. 5: Der skal ikke udarbejdes skriftlig dokumentation for kontrollerede transaktioner, der i omfang og hyppighed er uvæsentlige. For mindre virksomheder er dokumentationspligten dog begrænset til at omfatte visse kontrollerede transaktioner, jf. 3 B, stk. 5 (SKL 3 B, stk. 6): De selvangivelsespligtige skal udfærdige og opbevare skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for de kontrollerede transaktioner, jf. dog stk Dette fremgår ligeledes af BEK. Nr. 42, af 24. januar , stk. 4, se bilag 4 48 I SKL 3 B, stk. 2, er det fastslået, at der ved koncernforbundne juridiske personer forstås juridiske personer, der kontrolleres af samme kreds af aktionærer - Se bilag 2 49 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, 2008 Side 31

32 Dokumentationens omfang er på sin hvis, også indskrevet i SKL 3 B, stk. 5:.. Told- og skatteforvaltningen fastsætter regler for indholdet af den skriftlige dokumentation. De fastsatte regler skal godkendes af Skatterådet. De regler for indholdet af den skriftlige dokumentation er udstedt ved bekendtgørelse nr. 42 af 24. januar 2006, også kaldet dokumentationsbekendtgørelsen. Ved dokumentationspligt forstås derfor, at alle juridiske og fysiske enheder på befaling af skattemyndighederne skal kunne dokumentere, alle former for relevant information, der kan have betydning og indflydelse for fastsættelse af den skattepligtiges indkomst og ligningen heraf. 6.5 Dokumentationsbekendtgørelsen (BEK nr. 42 af ) Dokumentationsbekendtgørelsen kaldes officielt BEK nr. 42 af 24/01/2006: bekendtgørelse om dokumentation af prisfastsættelse af kontrollerede transaktioner og er udsendt af SKAT. Dokumentationsbekendtgørelsen udspringer af SKL 3 B stk. 5. som giver SKAT hjemmel til at fastsætte nærmere regler for indholdet af den skriftlige dokumentation. Introduktionen af dokumentationsbekendtgørelsen har betydet, at det for de skattepligtige og skattemyndighederne er blevet mere gennemskueligt, hvad en transfer pricing-dokumentation skal indeholde. Det er et omfattende dokumentationsmateriale der skal udarbejdes, og det er derfor vigtigt at virksomheden klart og udtømmende beskriver, forklarer og dokumenterer for SKAT, hvordan priserne er fastsat, og hvorfor overdragelsespriserne efter virksomhedens opfattelse er på markedsvilkår. Dokumentationsbekendtgørelsen er opbygget med et indledende afsnit med identifikation af hvem der er omfattet, hvad en dokumentation skal kunne danne grundlag for, samt hvad uvæsentlige transaktioner er. Derefter indeholder den en beskrivelse af hvad en transfer pricing-dokumentation skal indeholde, herunder en beskrivelse af koncernen samt arten og omfanget af de kontrollerede transaktioner, koncernens funktioner og risici i forbindelse med transaktionerne, de skriftlige aftaler, Side 32

33 der foreligger om de pågældende transaktioner mellem de koncernforbundne selskaber inklusiv vilkår, prisforhold samt selskabets egen sammenlignelighedsanalyse med hensyn til interne og eksterne transaktioner i forhold til armslængdepriser. Herunder pointeres det, at SKAT har mulighed for til at bede om supplerende materiale. Den sidste del omhandler databaseundersøgelser og muligheden for at udarbejde dokumentationen som en EU transfer pricing-dokumentation og til sidst ikrafttrædelsestidspunktet af bekendtgørelsen. Jeg vil i de følgende afsnit foretage en gennemgang af dokumentationsbekendtgørelsen. Jeg har her brugt dokumentationsbekendtgørelsen som kilde De omfattede af dokumentationsbekendtgørelsen Jf. 1, stk. 1, er de omfattede af bekendtgørelsen de skattepligtige, som ved opgørelsen af den skatte- eller udlodningspligtige indkomst skal anvende priser og vilkår for handelsmæssige eller økonomiske transaktioner med forbundne parter (kontrollerede transaktioner), som er i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter, jf. ligningslovens 2, stk. 1 51, og som skal udfærdige og opbevare skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for disse kontrollerede transaktioner, jf. skattekontrollovens 3 B, stk Stk. 2. I skattekontrollovens 3 B, stk. 6 53, er angivet, at skattepligtige, som falder under visse størrelsesgrænser, kun skal udarbejde dokumentation for visse kontrollerede transaktioner. Andre undtagelser for dokumentationspligten er beskrevet i skattekontrollovens 3 B, stk En dokumentation skal kunne danne grundlag for en vurdering af, om priser og vilkår er fastsat i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter og indeholde de beskrivelser og analyser, som er beskrevet i 4-8, det er dog ikke en betingelse, at dokumentationen følger strukturen i Se bilag 4 Dokumentationsbekendtgørelsen (BEK nr. 42 af 24. januar 2006) 51 Se bilag 1 LL 2 52 Se bilag 2 SKL 3 B 53 Se bilag 2 SKL 3 B 54 Se bilag 2 SKL 3 B Side 33

34 Det fremgår af 2, stk. 2, at omfanget af beskrivelser og analyser mv. til dokumentationens hovedpunkter afhænger af omfanget og kompleksiteten af virksomheden og de kontrollerede transaktioner Dokumentationen kan udarbejdes på dansk, norsk, svensk eller engelsk og dokumentationen skal på begæring fremsendes til SKAT inden 60 dage. Dette står skrevet til 2, hhv. stk. 3 og stk Beskrivelsen af koncernen og de forretningsmæssige aktiviteter Ifølge 4, stk. 1, skal en transfer pricing-dokumentation indeholde en beskrivelse, som giver SKAT et overblik over koncernen og de forretningsmæssige aktiviteter. Beskrivelsen skal jf. 4, stk. 2 indeholde virksomheden, inklusiv juridisk struktur, organisationsstruktur, historisk beskrivelse, beskrivelse af branchemæssige forhold, samt en oversigt, der viser de seneste tre års omsætning og resultatet af den primære drift for den skattepligtige og de associerede selskaber, som den skattepligtige har haft kontrollede transaktioner med. Beskrivelse af koncernens juridiske struktur Beskrivelsen skal give SKAT et overblik over den juridiske struktur i koncernen, som virksomheden er en del af. Beskrivelsen kan tage udgangspunkt i virksomhedens placering i koncernen, idet virksomhedens nærmeste organisatoriske relationer samt de organisatoriske relationer, som virksomheden har kontrollerede transaktioner med, under alle omstændigheder skal fremgå af beskrivelsen. Følgende informationer skal som udgangspunkt med i beskrivelsen. 1) De forskellige selskaber i koncernen skal nævnes og ikke kun dem, som umiddelbart er involveret i de kontrollerede transaktioner. 2) Oplysning om med hvilke ejerandele de forskellige parter er forbundne. 3) Det anbefales, at dokumentationen indeholder et komplet koncerndiagram. For meget store koncerner kan det dog være vanskeligt at udarbejde et koncerndiagram, der inkluderer alle juridiske enheder, da et sådant diagram hurtigt bliver meget uoverskueligt. Hvor dette giver et bedre overblik kan det være en mulighed, at gruppere koncernselskaberne efter eksempelvis region eller verdensdel. Jf. 4, stk. 2, nr. 1. Side 34

35 Hvis der er sket ændringer i den juridiske struktur i løbet af indkomståret, skal den juridiske struktur beskrives både ved indkomstårets begyndelse og afslutning. Beskrivelsen skal desuden indeholde en redegørelse for, hvori ændringerne af den juridiske struktur består. Beskrivelse af koncernens organisatoriske struktur Beskrivelsen skal give SKAT et overblik over den organisatoriske struktur i koncernen og skal også indeholde en beskrivelse af de primære forretningsmæssige aktiviteter for virksomheden og de forbundne parter, som virksomheden har haft transaktioner med jf. 4, stk. 2, nr. 2. Oversigt over de seneste tre års regnskabstal Beskrivelsen skal indeholde de seneste tre års omsætning og resultat af den primære drift for virksomheden og for de forbundne parter, som virksomheden har haft kontrollerede transaktioner med. Historisk beskrivelse af koncernen og virksomheden, herunder underskud mv. Det er som udgangspunkt kun forhold, som direkte eller indirekte berører virksomheden, der skal beskrives. Beskrivelsen af den historiske udvikling skal særligt være fokuseret på historiske forhold, der har betydning for at forstå og vurdere de kontrollerede transaktioner. Beskrivelsen kan være en kort historisk gennemgang af forhold omkring koncernens etablering, udvikling og situationen i det pågældende indkomstår. Beskrivelsen af den historiske udvikling i koncernen skal sætte SKAT i stand til bl.a. at fastslå, om der er tale om en ny eller en veletableret virksomhed, og om virksomheden er i en ekspanderende fase eller i gang med rationaliseringer. Dette er væsentligt for at forstå baggrunden for de strategier, virksomheden eller koncernen handler efter. Det kan have stor betydning for vurderingen af armslængdeprincippet, hvis der i dokumentationsperioden er sket omstruktureringer og skift i væsentlige funktioner og risici. Ændringer og konsekvenser ved eventuelle omstruktureringer skal derfor ligeledes beskrives, ligeledes gælder andre væsentlige skift i parternes funktioner, aktiver eller risici, herunder eventuelle ændringer, som er sket gradvist. også. Side 35

36 Forklaringen på underskud skal, sammen med det øvrige dokumentationsmateriale, gøre det muligt for SKAT at vurdere, om underskuddet på den/de kontrollerede transaktioner er i overensstemmende med armslængdeprincippet. Beskrivelse af de branchemæssige forhold Beskrivelsen skal indeholde en generel introduktion til branchen, og den skal indeholde en beskrivelse af de væsentligste konkurrencemæssige parametre samt koncernens position i tilknytning hertil. Afhængig af branchen kan forskellige konkurrencemæssige parametre som fx pris, kvalitet eller produktudvikling have forskellig betydning. For koncerner, der opererer i flere forskelligartede brancher (og eventuelt forskellige segmenter indenfor en branche), beskrives de generelle branchemæssige forhold med udgangspunkt i den eller de brancher, som virksomhedens kontrollerede transaktioner nærmest knytter sig til. 5 - Beskrivelse af de kontrollede transaktioner Jf. dokumentationsbekendtgørelsens 5, stk. 1, skal de kontrollerede transaktioner mellem selskabet og de koncernforbundne parter beskrives for at kunne foretage en korrekt sammenligning og deraf følgende prisfastsættelse. SKAT skal jf. 5, stk. 3, kunne identificere virksomhedens kontrollerede transaktioner, med hensyn til hvor meget der er overdraget og mellem hvilke forbundne parter. Virksomheden skal således i dokumentationen identificere og gøre rede for alle kontrollerede transaktioner, herunder også transaktioner, hvor der ikke nødvendigvis er tilknyttet en betaling. Dog skal hver enkelt af virksomhedens kontrollerede transaktioner i løbet af dokumentationsperioden nødvendigvis ikke beskrives og prisfastsættes individuelt. Ensartede transaktioner kan beskrives og efterfølgende dokumenteres samlet (aggregeret) i forhold til sammenlignelighedsanalysen, jf. 5, stk. 2. Det skal fremgå af dokumentationen, hvilke transaktioner der er samlet, og begrundelsen herfor. Hvis produkterne i virksomheden derimod ikke er grundlæggende ensartede i forhold til de fem sammenlignelighedsfaktorer, vil det ikke være muligt at beskrive dem samlet. F.eks. kan varesalg ikke beskrives samlet, hvis der er tale om produktion og salg af henholdsvis vindmøller og skibe. Tilsvarende gælder, hvis de økonomiske Side 36

37 forhold på de geografiske markeder for salgsdatterselskaberne ikke er grundlæggende ensartede i forhold til de fem sammenlignelighedsfaktorer 55. Beskrivelsen skal jf. 5, stk.4, indeholde produkternes egenskaber, funktionsanalyse (funktioner, aktiver, risici), kontraktvilkår, økonomiske omstændigheder og forretningsstrategier samt eventuelle omkostningsfordelingsaftaler og andre forhold, som konkret vurderes af betydning for en armslængdevurdering. Produkters egenskaber For varer er de relevante egenskaber, som skal beskrives, eksempelvis varens fysiske egenskaber, emballagen, kvaliteten, om der gives en udvidet service eller garanti, eller om der er tale om en mærkevare. Kvantitet er også vigtig ved prissammenligninger. Ved serviceydelser skal serviceydelsens art og omfang beskrives. Det er vigtigt at få forskellene, fra konkurrenters lignende produkter, da men ved udformning af emballage, anvendelse af reklame eller lignende forhold har differentieret sig fra konkurrerende produkter i et sådant omfang, at disse ikke kan anvendelse som sammenligningsgrundlag. For immaterielle aktiver, er det vigtigt at få beskrevet, hvilken type rettighed det drejer sig om (patent, varemærke, knowhow, goodwill osv.), kontraktens løbetid, rettighedens beskyttelse samt den forventede nytteværdi for licensrettighed eller en overdragelse af ejendomsret. 56 En funktionsanalyse Selskaber og koncerner er opbygget på forskellige grundlag med forskellige organisationsstrukturer. Herved bæres der forskellige risici, alt afhængigt af hvor mange led i værdikæden selskabets håndtere selv. For at kunne foretage den mest korrekte sammenligning, er det nødvendigt at foretage en funktions- og risikoanalyse. På den måde vil man opnå et sammenligningsgrundlag for virksomheder med samme funktioner, aktiver og risici, som det selskab man søger at fastsætte en koncernintern transaktion for. 55 SKATs Juridiske Vejledning , kap. C.D. 11 om transfer pricing 56 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, 2008 Side 37

38 En funktions- og risiko analyse er en analyse af selskabet, og indeholder konklusioner vedrørende den rolle, som hver enhed(selskab) i en koncern har. Funktionsanalyse har til formål at identificere aktiviteter der er economically significant 57, her er det vigtigt at man identificere hvad der er væsentligt i prisfastsætningen, så man kan minimere analysen og udelade mindre væsentlige økonomiske forhold. Man skal fokuseres på det, der skaber værdi for koncernen, hvorfor det er meget vigtigt, at foretage analysen på baggrund af værdiskabende aktiviteter, og ikke de rutineprægede og administrative aktiviteter. Overordnet kigger man på virksomheden som helhed og laver en vurdering af virksomhedens samlede værdi, samt de risici som disse indeholder. Funktionsanalysen indeholder som nævnt en vurdering af: Funktioner: Selskabets funktioner skal fastsættes, herunder forretningsgange, processer og arbejdsopgaver. Eksempler på funktioner et selskab kan håndtere er design, forskning produktion, reklame, service og ledelse. Aktiver: En funktionsanalyse skal identificere aktiver, der er benyttet af parterne i en koncernintern transaktion. Især immaterielle aktiver er relevante at analysere, for de ofte repræsenterer væsentlig værdi og kan have betydning for valg af prisfastsætningsmetode. OECD refererer til immaterielle aktiver som commercial intangibles og anvender sondringen mellem trade intangibles såsom patenter, knowhow, modeller og software, samt marketing intangibles såsom varemærker, kundelister, varenavn, distributionskanaler og unikke navne, symboler og billeder, som har markedsføringsmæssig betydning i relation til salg af et produkt 58. Risici: Der skal foretages en analyse af selskabets risici, idet påtagelsen og fordelingens af risici vil påvirke vilkårene i koncerninterne transaktioner. Jo større risici der pådrages i 57 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, 2008, s Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, 2008, s Side 38

39 selskabet, jo højere forventet afkast. Det er væsentligt at påpege at der er tale om et forventet afkast. Høj risici kan både udmønte sig i en stor gevinst, eller mod forventning omvendt et stort tab. Af risici kan nævnes strategiske risici, markedsrisici, valutarisici. Risici hænger i høj grad sammen med antallet af funktioner. Jo flere funktioner der ejes, jo større risiko. På baggrund af funktionsanalysen, vil man frasortere de selskaber der ikke har samme funktioner, som det selskab man forsøger at fastsætte en koncernintern pris på. Såfremt et selskab ikke har lignende overordnede risiko profil, bør disse selskaber ikke medgå i sammenligningen. Kontraktsvilkår Hvis der handles på vilkår ud fra en nedskreven kontrakt, bør analysen kun inkludere transaktioner, hvor der her er tale om lignende kontrakter og vilkår. Af væsentlige kontraktforhold kan nævnes betalingsbetingelser, risikoovergang og rettigheder. Der kan i de enkelte transaktioner være kontrakter, der giver grundlag for udsving i de priser der fastsættes, præcis derfor giver det mening at tage højde for underliggende kontrakter i de pågældende transaktioner. Økonomiske omstændigheder Prisen på en transaktion mellem uafhængige parter er påvirket af de omstændigheder der eksisterer på det marked der handles på. Der kan være specifikke konkurrenceforhold, markedsvilkår, og generelle udbuds- og efterspørgsels forhold, der er med til at styre prisen. For at kunne foretage en sammenligning, er der derfor også nødvendigt at foretage en analyse af de økonomiske omstændigheder på det pågældende marked. De forhold der gør sig gældende på markedet, skal være lignende med dem der indgår i sammenlignelighedsgrundlaget. Det kunne være oplagt, at foretage en direkte analyse af situationen i det marked man ønsker at prisfastsætte en koncernintern transaktion. For at få det optimale indblik i markedet, vil det derfor være optimalt at foretage en analyse såsom en Porters-5-forces analyse, hvor konkurrencevilkårene analyseres. Men kunne også foretage en PEST-analyse, der giver et godt indblik i de markedsmæssige Side 39

40 omstændigheder. Udover det, vil det selvfølgelig være nødvendigt, at foretage en generel analyse af markedet, herunder geografisk placering og størrelse på det pågældende marked. Det er i disse analyser vigtigt kun at fokusere på relevante forhold, da analyserne ofte kan pege i forskellige retninger. Resultatet af analyserne, vil give indikationer om det markedet selskabet befinder sig på. Forretningsstrategier Virksomhedens strategi på markedet skal her analyseres. Vil man sælge til lav pris for at komme ind på markedet eller vil man sælge til en højere pris og inkludere serviceydelser? Ved vurderingen af forretningsstrategier, er det vigtigt at fastlægge hvilket koncernselskab, der påtager sig risikoen for strategien. Det er fundamentalt at man foretager denne vurdering, da der kan være forskellige bevæggrunde, der ligger til grund for de transaktioner der føres mellem eksterne parter. Det kan tænkes at et nyt selskab uden et væsentligt brand, muligvis ved indtrængning på et nyt marked, vil tilbyde et produkt til en billigere pris, end hvad der som udgangspunkt ville anslås at være markedsprisen. Derfor skal forhold som dette, udskilles fra sammenlignelighedsgrundlaget, såfremt der ikke vil være en væsentlig grund til at fortage sammenligningen eller såfremt der ikke kan justeres for dette i grundlaget. Konsekvenser af forkerte analyser og antagelser, kan give et forkert sammenlignelighedsgrundlag. I sidste ende kan dette betyde, at den transferpris der er fastsat i koncernen ikke kan anses som en armslængdepris. Dette kan resultere i en korrektion fra SKAT, og herved også bøder og dårlig omtale af koncernen. Analysen er derfor et vigtigt element for en koncerns transfer pricing grundlag, og bør derfor foretages med omhug og med de mest korrekte og relevante forhold for øje. Såfremt det ikke er muligt at foretage direkte sammenligninger, til uafhængige transaktioner vil det være muligt at foretage justeringer af sammenligningsgrundlaget. OECDs Transfer Pricing Guidelines pkt redegør for denne betragtning. I dette punkt beskrives det nemlig, hvorledes det kan være nødvendigt at foretage tilpasninger, ud fra den vurdering af de faktorer der har væsentlig indflydelse på armslængdeprisen. Med andre ord kan det være muligt at tilpasse en Side 40

41 ekstern transaktion, således at den alligevel kan benyttes som sammenligningsgrundlag for fastsættelsen af en koncernintern pris. Ydermere skal der i 5, stk. 5 og stk. 6, beskrives eventuelle omkostningsfordelingsaftaler og andre forhold, som konkret vurderes af betydning for en armslængdevurdering. 6 - Sammenlignelighedsanalyse En vigtig del af at fastsætte prisen for de transaktioner der foretages internt i en koncern, er udarbejdelse af en analyse, hvori det fastslås hvilke eksterne selskaber der kan drages en sammenligning til. De sammenlignelige selskabers data er nemlig dem der danner grundlag for den pris. Markedsprisen er netop denne pris, der bør være den mest retvisende pris at fastsætte mellem to koncernforbundne parter. Dokumentationen skal derfor indeholde en sammenlignelighedsanalyse, som sammen med beskrivelserne i 4 og 5 kan danne grundlag for en vurdering af, om principperne for prisfastsættelsen af de kontrollede transaktioner er i overensstemmelse med armslængdeprincippet, jf. stk , herunder valg af prisfastsættelsesmetode 60. Det skal altså beskrives hvilke sammenlignelige priser der er anvendt og hvilken prisfastsættelsesmetode der er benyttet og hvorfor og hvorfor resultatet vurderes at være i overensstemmelse med armslængdeprincippet. 7 - Overordnet redegørelse for implementeringen af principperne for prisfastsættelsen Dokumentationen skal indeholde en overordnet redegørelse for implementeringen af principperne for prisfastsættelsen, som skal sætte SKAT i stand til at vurdere, om de(n) valgte metode(r) er anvendt korrekt. Redegørelsen skal endvidere jf. 7, stk. 2, specificere, i hvilket omfang den skattepligtige eller forbundne parter har foretaget efterfølgende justeringer af priser og vilkår for de kontrollerede transaktioner i Danmark eller i udlandet. Specifikationen skal indeholde oplysninger om, i hvilket omfang disse efterfølgende reguleringer er i overensstemmelse med armslængdeprincippet 59 Se bilag 4 Dokumentationsbekendtgørelsen (BEK nr. 42 af 24. januar 2006) 60 Se bilag 9, for en kort beskrivelse af de enkelte prisfastsættelsesmetoder. Side 41

42 8 - Liste over eventuelle skriftlige aftaler vedrørende de kontrollerede transaktioner Dokumentationen skal indeholde en liste over eventuelle koncerninterne aftaler vedrørende de kontrollerede transaktioner, samt en kopi af eventuelle aftaler jf. 8, stk. 2, som den skattepligtige eller forbundne parter har indgået med myndigheder i andre lande vedrørende de kontrollede transaktioner, dette gælder både aftaler med bagudrettet og fremadrettet virkning. Listen støtter de priser og vilkår, de koncernforbundne virksomheder handler til, da der i aftalerne beskrives de vilkår som priserne bygger på. Dokumentationen ifølge 4-8 omfatter dokumentation for prisfastsættelsen af de kontrollerede transaktioner, som skal være fastsat i overensstemmelse med armslængdeprincippet. 9 Supplerende oplysninger SKAT kan jf. 9 i løbet af en skattekontrol anmode om supplerende oplysninger og materiale, herunder at der udarbejdes supplerende materiale. Der kan anmodes om oplysninger og materiale, som må anses som relevant for en armslængdevurdering, herunder oplysninger og materiale til uddybning og kontrol af de i 4-8 og 10 nævnte beskrivelser, analyser mv. 2, stk. 3, finder tilsvarende anvendelse. 10 Databaseundersøgelse SKAT kan jf. 10, stk. 1, anmode den skattepligtige om at udarbejde databaseundersøgelse for en eller flere kontrollerede transaktioner, dette kan alene fremsættes under en skattekontrol. Ved en databaseundersøgelse forstås jf. 10, stk. 2, en søgning efter sammenligningsgrundlag, som kan anvendes til brug for prisfastsættelse samt vurdering af, om prisfastsættelse af kontrollerede transaktioner sker på armslængdevilkår. Søgningen sker i offentligt tilgængelige databaser, herunder eventuelt mod betaling. Side 42

43 Ifølge 10, stk. 3, skal databaseundersøgelsen indeholde følgende: 1) Identifikation af transaktion(er) der testes og anvendt prisfastsættelsesmetode. 2) Beskrivelse af udsøgningsprocessen, herunder begrundelse for kvantitative og kvalitative udsøgningskriterier. 3) Forklaring for brug af justeringer og interval og 4) Dokumentationsmateriale fra database og anvendte data i øvrigt. SKAT skal jf. 10, stk. 4, give den skattepligtige en frist på mellem 60 og 90 dage til at udarbejde databaseundersøgelsen Udarbejde dokumentationen som en EU transfer pricingdokumentation Den skattepligtige kan vælge at udarbejde dokumentationen ud fra EU transfer pricing-dokumentation(eutpd), dog er der krav om, at dokumentationsbekendtgørelsen 4-8 skal være indeholdt i enten den fællesdokumentation eller den landespecifikke dokumentation. 12 Ikrafttrædelse Bekendtgørelsen trådte i kraft den 4. februar 2006 og har virkning for kontrollerede transaktioner foretaget i det indkomstår, der påbegyndte den 1. januar 2006 eller senere. Skattekontrollovens 17, stk. 3, anvendes først for kontrollerede transaktioner foretaget i indkomståret der påbegyndte den 2. april 2006 eller senere. Afslutningsvis kan det sige, at en dokumentation, der opfylder indholdskravene i dokumentationsbekendtgørelsen, opfylder herved automatisk skattekontrollovens 3 B, stk. 5 s generelle egnethedskriterium. 6.6 Dokumentationsvejledningen SKAT udsendte i februar 2006 dokumentationsvejledningen, i dag kaldet den juridiske vejledning afsnit C.D.11. I vejledningen er den danske transfer pricing lovgivning beskrevet og man kan godt sige, at et af formålene med dokumentationsvejledningen er, at give skatteyder en beskrivelse af og vejledning i de indholdsmæssige krav, der er fastsat i dokumentationsbekendtgørelsen, BEK nr. 42 af Derfor er dokumentationsvejledningen ikke juridisk bindende for skattepligtige, men mere en Side 43

44 vejledning i hvorledes transfer pricing-dokumentationer sikres at være i overensstemmelse med dokumentationsbekendtgørelsen, som netop er juridisk bindende. Vejledningen indeholder en detaljeret gennemgang af, hvad en transfer pricingdokumentation som minimum burde indeholde indenfor de hovedpunkter, der listes op i dokumentationsbekendtgørelsen. Dokumentationsvejledningen henviser derfor også til de samme sammenlignelighedsfaktorer, som OECDs Transfer Pricing Guidelines oplister, der skal vurderes, når det skal undersøges, om der foreligger sammenlignelighed 61. Den nye dokumentationsvejledning trådte i kraft pr. 15. januar 2014 og kan findes på SKATs hjemmeside Skønsmæssig ansættelse ved utilstrækkelig dokumentation Dette afsnit beskriver SKATs mulighed for at foretage en skønsmæssig ansættelse, når der ikke findes en tilstrækkelig transfer pricing-dokumentation. SKAT kan fastsætte den skattepligtige indkomst vedrørende de kontrollerede transaktioner skønsmæssigt, hvis den skattepligtige ikke har udarbejdet en tilstrækkelig transfer pricing-dokumentation. Skønsmæssig ansættelse har direkte lovhjemmel i SKL 3 B, stk. 9: Såfremt den skattepligtige ikke har udarbejdet dokumentation efter stk. 5 eller 6 eller indsendt erklæring efter stk. 8, finder 5, stk. 3, anvendelse, for så vidt angår de kontrollerede transaktioner. 63, Bestemmelsen henviser til SKL 5, stk. 3: Hvis den selvangivelsespligtige ikke har selvangivet fyldestgørende på ansættelsestidspunktet, kan skatteansættelsen foretages skønsmæssigt , stk. 3 se bilag Se bilag 2 SKL 3 B Side 44

45 Det afgørende er således, at den skattepligtige har udarbejdet transfer pricingdokumentation, dvs. at er der derfor ikke udarbejdet en transfer pricingdokumentationen, eller er den mangelfuld, kan SKAT jf. SKL 5 stk. 3 og SKL 3 B stk. 9, ansætte indkomsten skønsmæssigt. En korrektion af den skattepligtige indkomst skal dog være begrundet, hvilket vil sige at transfer pricing-dokumentationen skal være kvalificeret mangelfuld og at SKAT skal angive de forhold, der er tillagt betydning ved den skønsmæssige ansættelse samt den metode, der er anvendt til at beregne priserne. Når SKAT foretager en skønsmæssig ansættelse, er det efter Landsskatterettens og domstolenes praksis, herefter den skattepligtige, der skal godtgøre, at skønnet er åbenbart urimeligt eller hviler på et forkert grundlag. 6.8 Bøde ved manglende eller utilstrækkelig dokumentation Oplysningspligten Skattepligtige kan ved hjælp af sanktioner pålægges at opfylde oplysningspligten. De selskaber som ikke indsender 3B-skemaet til SKAT, kan således med hjemmel i 5, stk. 1 og stk. 2 65, pålægges skattetillæg og daglige bøder. Hvis selskaber opgiver forkerte og vildende oplysninger i skemaet, gælder SKL 14, stk. 4: Med bøde straffes den, der forsætligt eller af grov uagtsomhed afgiver urigtige eller vildledende oplysninger om opfyldelse af betingelserne for anvendelse af 3 B, stk. 6 Af bemærkningerne til lov nr. 591 af 18/ fremgår det, at gerningsindholdet består i, at virksomheden undgår udarbejdelse af den fulde transfer pricingdokumentation ved at oplyse, at den har under 250 beskæftigede og en balance under 125 mio. kr. eller en omsætning under 250 mio. kr. Disse oplysninger skal indgives i forbindelse med selvangivelsen, og det strafbare gerningsindhold er realiseret, når de urigtige oplysninger er modtaget af SKAT. Bødeberegning tager derfor udgangspunkt i enten omsætningens størrelse eller antallet af ansatte. Den skattepligtige indkomst i et selskab i en koncernforbunden virksomhed kan være ganske stor, selvom der er tale om forholdsvis få ansatte i 64 SKL 5, stk. 9 Se bilag SKL 5, stk. 9 Se bilag 10 Side 45

46 netop dette selskab, og omvendt kan antallet af ansatte i det skattepligtige selskab være forholdsmæssigt stort i forhold til selskabets omsætning eller balance. Bøden udgør derfor det største af følgende to beløb: 1.) i forhold til virksomhedens omsætning, således at den bliver 0,5 pct. af bøden gradueres omsætningen op til en omsætning på 500 mio. kr., 0,1 pct. af den resterende omsætning op til 1 mia. kr. og 0,05 pct. af omsætningen over 1 mia. kr. 2.) bøden gradueres i forhold til antal medarbejdere i den pågældende danske virksomhed, således at bøden bliver t.kr. 250 for op til 50 medarbejdere og stiger med t.kr. 250 for hver yderligere 50 medarbejdere op til 500 medarbejdere. Er der over 500 medarbejdere, ansættes bøden til 2 mio. kr. 66 Afslutningsvist kan det nævnes, at skatteansættelsen kan foretages skønsmæssigt, såfremt selvangivelsen med tilhørende bilag ikke foreligger på ansættelsestidspunktet. Dokumentationspligten SKL 17, stk. 3: Med bøde straffes den, der forsætligt eller af grov uagtsomhed undlader rettidigt at indsende den skriftlige dokumentation, som der er pligt til at udarbejde efter 3 B, stk. 5 og 6, eller indhente revisorerklæring efter 3 B, stk. 8. Såfremt et dokumentationspligtigt selskab ikke udarbejder en dokumentation eller udarbejder en dokumentation der er utilstrækkelig, har SKAT mulighed for at sanktionere overfor selskabet med bøde jf. SKL 17 stk. 3: Med bøde straffes den, der forsætligt eller af grov uagtsomhed undlader rettidigt at indsende den skriftlige dokumentation, som der er pligt til at udarbejde efter 3 B, stk. 5 og 6, eller indhente revisorerklæring efter 3 B, stk Ud fra overstående, kan man konkludere, at der dog kun udskrives bøder, såfremt der foreligger forsætligt eller grov uagtsomhed fra den skattepligtiges side. Skatteyder skal kunne indsende den ønskede dokumentation indenfor 60 dage efter selvangivelsesfristen på opfordring af SKAT, jf. 2, stk. 4 i dokumentationsbekendtgørelsen Philip Noes, Justeringer af bødereglerne for manglende og mangelfuld transfer pricing-dokumentation m.v., Skat udland, 2012, nr. 7, S Se bilag 2 SKL 3 B 68 Se bilag 4 Dokumentationsbekendtgørelsen (BEK nr. 42 af 24. januar 2006) Side 46

47 Bødestørrelsen for mangelfuld dokumentation er et grundbeløb på kr. pr. selskab pr. indkomstår kr.-bøden gælder uanset om det konstateres, at der rent faktisk er handlet i overensstemmelse med armslængdeprincippet. Grundbeløbet kan dog muligvis nedsættes til kr , hvis der senere fremkommer dokumentation af fornøden kvalitet 69. Bødeudmålingen finder anvendelse også ved rettidig indsendelse af dokumentation, hvis skatteyderen undlader at indsende supplerende materiale eller undlader at fremsende databaseundersøgelse eller revisorerklæring. Yderligere forhøjes bøden med 10 procent af indkomstforhøjelsen, hvis der sker en forhøjelse af indkomsten som følge af, at armslængdeprincippet ikke er opfyldt. Tillægget på 10 procent beregnes derfor af ansættelsesændringen, det vil sige forskellen mellem selvangivet indkomst og fikseret indkomst. Danmark har indført bøder på transfer pricing-området for at sikre, at de skattepligtige udarbejder transfer pricing-dokumentation. Bødestraf vil f.eks. kunne komme på tale, hvis der overhovedet ikke foreligge nogen dokumentation. Det samme gælder, hvis der godt nok foreligger en vis dokumentation, men denne har en sådan karakter, at der reelt ikke foreligger en dokumentation 70. Men er det i virkeligheden så enkelt? Og hvornår er gerningsindholdet realiseret? For eksempel vil det være strafbart, når der udarbejdes en dokumentation, som indsendes inden for den af SKAT meddelte frist på 60 dage, men hvor dokumentationen ikke lever op til SKL 3 B, stk. 5 s egnethedskriterium. Det samme vil være gældende hvis der udarbejdes en dokumentation som lever op til SKL 3 B, stk. 5 s egnethedskriterium, men som ikke indsendes inden for den af SKAT meddelte frist på 60 dage, selvom transfer pricing-dokumentationen skal udarbejdes løbende og opbevares i selskabet, så anses den strafbare overtrædelse af skattekontrollovens 17, stk. 3, først for fuldbyrdet, når SKAT har fremsat krav om, at selskabet indsender dokumentationen inden for den fastsatte frist, og denne frist ikke overholdes. 71 Det vil dog ikke være strafbart når der udarbejdes en dokumentation som ikke lever op til SKL 3 B, stk. 5 s egnethedskriterium, men som 69 SKAT, Den juridiske vejledning, afsnit C.D Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, L 173's bemærkninger s. 18, 2. sp. Side 47

48 ikke indsendes, fordi SKAT ikke har anmodet om den. Det kan diskuteres hvorvidt det er strafbart, hvis der udarbejdes i efteråret 2013 en dokumentation for årene som lever op til SKL 3 B, stk. 5's egnethedskriterium, og som indsendes inden for den af SKAT meddelte frist på 60 dage. I teorien ville det eksempel være strafbart, men det ville ikke være tilfældet i praksis pga. samtidighedsprincippet. Samtidighedsprincippet er defineret ved, at dokumentationen skal være udarbejdet og foreligge på selvangivelsestidspunktet. 7. EUTPD & PATA-dokumentation De koncernforbundne selskaber kan vælge at udarbejde dokumentationen som EUtransfer pricing-dokumentation (EUTPD). Siden 2006 har EU haft en Code of Conduct on transfer Pricing Documentation for Associated Enterprises in the European Union, forkortet EUTPD. Hensigten med dette har været at forenkle kravene til EUTPD en for inter-europæiske transaktioner. Den består af en fælles dokumentation (masterfile) og en landespecifik dokumentation, men ændrer ikke på de generelle krav til dokumentationen. I tillæg til dette har skattemyndighederne ret til at rekvirere yderligere information og dokumentation, men kun ved forespørgsel og kun som led i en skatterevision. EU-dokumentationen har den fordel, at den vil blive accepteret af alle EUmedlemslande, og den vil derfor være et godt udgangspunkt for en eventuel APA ansøgning. Indholdsmæssigt er dokumentation efter dokumentationsbekendtgørelsen og EUTPD i al væsentlighed den samme, da begge vejledninger er i overensstemmelse med OECD Transfer Pricing Guidelines. Det er frivilligt, om en multinationalt virksomhed vil anvende EUTPD en, men hvis den anvendes, skal den anvendes overalt i Europa og kontinuerligt. Uanset at EUTPD har til formål at forenkle dokumentationsaflæggelsen, har en rapport udarbejdet af Kommissionen i 2009 vist, at mange virksomheder havde fravalgt denne mulighed, årsager her var bl.a. at den i praksis muligvis ikke er fuldt ud accepteret hos alle skattemyndigheder, at masterfilen i nogle lande dels kun har en begrænset værdi. Virksomheder er ikke sikret mod yderligere dokumentationskrav og Side 48

49 ligeledes selv med en fyldestgørende EUTPD kan der alligevel foretages indkomstjusteringer af de enkelte selskaber. Pacific Association of Tax Administrators (PATA), der omfatter Australien, USA, Canada og Japan, udsendte i 2003 en PATA transfer pricing-dokumentationspakke, som er et fælles sæt regler for indholdet i en dokumentation og som opfylder alle landenes krav til dokumentation og derfor gør det muligt for selskaber med transaktioner mellem to eller flere PATA-lande at nøjes med at udarbejde en fælles dokumentation og stadig opfylde de involverede landes regler. Anvendelsen af pakken er frivillig, og pakken anses for at være i overensstemmelse med de generelle retningslinjer i Kapitel 5 i OECDs Transfer Pricing Guidelines. PATA's transfer pricingdokumentationspakken kan anvendes i Danmark, jf. Bekendtgørelse nr. 582 af PATA-dokumentationen bygger på tre grundprincipper og ifølge disse grundprincipper skal MNV en gøre sig rimelige anstrengelser for at overholde armslængdeprincippet og opbevare udarbejdet dokumentation for dette, samt udarbejde og rettidigt indsende en egentlig transfer pricing-dokumentation på skattemyndighedernes opfordring. Overholder man disse principper, vil der ikke blive udstedt bøde, uanset om der ellers måtte være regler om dette i de pågældende landes nationale lovgivning. I praksis er PATA-dokumentation ikke så udbredt. En af grundene til dette, kan være at PATA-dokumentationskravene er blevet fastlagt ved, at hvert enkelt lands krav er blevet skrevet ind, og dermed kan virksomheder opleve at opfyldelsen af kravene er meget mere ressourcekrævende, end de ville have været efter nationale lovgivninger, og selvom kravene er opfyldt kan der alligevel foretages indkomstjusteringer. 8. Dokumentation ifølge OECD Transfer Pricing Guidelines Retningslinjerne for udførelse af dokumentation for selskaberne findes i OECDs Transfer Pricing Guidelines kapitel 5(V). Dokumentationen vedrører prisfastsættelsen af de kontrollerede transaktioner, som skal afregnes til markedsvilkår, hvor udarbejdelsen af dokumentationen skal sikre, at skattemyndighederne kan vurdere de kontrollerede transaktioner ud fra et armslængdeprincip. 72 Transfer pricing i praksis, side 29, Anders Oreby Hansen & Peter Andersen, Magnus Informatik, 2008 Side 49

50 I sommeren 1995 blev de fem første kapitler til OECDs Transfer Pricing Guidelines udsendt. Et af disse fem kapitler omhandlede dokumentationskrav. Dette var det første forsøg på at få udarbejdet fælles regler efter 1994-reglerne var kommet fra USA. Der er lagt betydelig vægt på, at der skulle være rimelighed til stede i hele dokumentationsprocessen såvel for skattemyndighederne som for de multinationale selskaber. Kapitel V i OECDs Transfer Pricing Guidelines omhandler dokumentationen, som er nødvendig for skattemyndighederne for at kunne afgøre, om interne prisfastsættelser er i overensstemmelse med armslængdeprincippet. Indledningsvis står der i retningslinjerne at udgangspunktet er de nationale bevisbyrderegler, men at skattemyndighederne, selvom bevisbyrden påhviler dem, kan forpligte virksomhederne til at fremlægge dokumentation vedrørende de interne afregningspriser, da skattemyndighederne ikke vil være i stand til at undersøge sagen korrekt, uden en passende dokumentation. 73 I retningslinjerne er der et afsnit omkring nyttige oplysninger 74, som er relevante ved en undersøgelse af de interne afregningspriser. Det er fremhævet, at oversigten ikke er udtømmende og at det på grund af sagernes individuelle karakter ikke er muligt at give en fuldstændig oversigt 75. Oplysninger, der generelt vil være nyttige er oplysninger om følgende 76 : 1) De forbundne foretagender, der er inddraget i de kontrollerende transaktioner, 2) arten af de pågældende transaktioner, 3) de udførte funktioner og 4) sammenlignelige transaktioner mellem uafhængige virksomheder. Udover det er der nævnt en række supplerende oplysninger, der kan være nyttige i visse sager, eksempelvis 1) oplysning om, hvorvidt uafhængige virksomheder ville have gennemført en tilsvarende struktureret transaktion under sammenlignelige 73 OECD Transfer Pricing Guidelines, pkt OECD Transfer Pricing Guidelines, afsnit C, s OECD Transfer Pricing Guidelines, pkt OECD Transfer Pricing Guidelines, pkt Side 50

51 omstændigheder 2) om ændringer i handelsbetingelser 3) om modregningstransaktioner, der har indflydelse på armslængdeprisen 4) om finansielle forhold, med mere 77. Overstående kan være nyttigt i visse sager, for at skattemyndighederne kan have et tilstrækkeligt grundlag for at vurdere, om interne afregningspriser er i overensstemmelse med armslængdeprincippet. I sidste afsnit i retningslinjerne 78 står der, at enhver virksomhed af skattemæssige hensyn bør bestræbe sig på, at fastsætte interne afregningspriser i overensstemmelse med armslængdeprincippet. Som det fremgår stilles der ganske store krav til skatteyderens dokumentationsforpligtelse. I denne forbindelse anføres det dog i retningslinjerne, at skattemyndighederne kun bør kræve nødvendige oplysninger, og at der specielt må tages i betragtning at det kan være vanskeligt, eventuelt umuligt, for den undersøgte virksomhed at fremskaffe oplysninger om udenlandske forbundne virksomheder. Det står også skrevet at skattemyndighederne bør begrænse de oplysninger, der kræves af virksomhederne på selvangivelsestidspunktet, da der på dette tidspunkt ikke er udtaget en specifik transaktion til undersøgelse, hvorfor det ville være temmelig byrdefuldt for virksomhederne, såfremt detaljeret dokumentation om alle grænseoverskridende transaktioner og alle virksomheder involveret i sådanne transaktioner, skulle indgives. Det vil derfor være urimeligt at kræve specifik dokumentation for samtlige interne prisfastsættelser i forbindelse med indgivelsen af selvangivelsen, da dette kunne medføre en hindring for international handel og udenlandske investeringer. Derfor bør dokumentationskravet på selvangivelsestidspunktet begrænses til at kræve tilstrækkelig dokumentation for, mere eller mindre, at sætte skattemyndighederne i stand til at fastlægge, hvilke virksomheder der skal undersøges nærmere. 77 OECD Transfer Pricing Guidelines, pkt OECD Transfer Pricing Guidelines, afsnit D, s. 188 Side 51

52 9. Base Erosion and Profit Shifting (BEPS) Base Erosion and Profit Shifting (BEPS)-projektet er drevet af OECDs antagelse om, at betydeligt skatteprovenu tabes på grund af virksomheders skatteplanlægning og målrettede udhuling af den skattepligtige indkomst og/eller flytning af overskud til jurisdiktioner, hvor de er underlagt mere favorabel beskatning. OECDs fundamentale bekymring er, at de fælles principper, efter hvilke beskatningsretten er delt mellem stater, ikke er fulgt med udviklingen i den økonomiske globalisering og den stigende betydning af immaterielle rettigheder som værdiskabende faktor. 79 BEPS-projektet involverer alle medlemmer af OECD samt G20-landene på lige fod. Med projektet handler OECD på et kald om hjælp fra skattemyndighederne, der beder OECD om at gribe ind på den voksende bekymring om, at landene mister betydelige mængder af skatteindtægter fra multinationale selskaber, som beskæftiger sig med aggressiv skatteplanlægning. I princippet er skatteplanlægning ikke ulovligt, hvis det blot foregår indenfor lovens rammer og det ville jo også være unaturligt, hvis virksomheder ikke forsøgte at minimere deres skattebetaling, som er en omkostning for dem. Men der er en balance mellem skatteplanlægning og direkte skattesvig, hvor sidstnævnte omhandler overtrædelse af den gældende lovgivning og dermed ryger ind under betegnelsen som aggressiv skatteplanlægning. Skattesvig involverer typisk direkte afgivelse af vildledende eller forkerte oplysninger intenderet enten forsætligt eller groft uagtsomt. OECD startede analyserne af omfanget af BEPS op i 2012 og arbejdet var et af agendapunkterne på G20 ledernes møde i Mexico i juni G20 lederne udtalte under mødet, at der er et need to prevent base erosion and profit shifting. OECD initiativet om BEPS og aggressiv skatteplanlægning er således rykket op på højeste politiske plan OECDs "Base Erosion and Profit Shifting" initiative, Skat udland, 2013, nr. 9, S , Ann- Charlotte Beierholm & Søren Jesper Hansen 80 OECDs "Base Erosion and Profit Shifting" initiative, Skat udland, 2013, nr. 9, S , Ann- Charlotte Beierholm & Søren Jesper Hansen Side 52

53 Addressing Base Erosion and Profit Shifting -rapporten, der identificere hovedårsagerne til BEPS, fik opbakning og støtte af G20-landenes finansministre og er blevet enstemmigt godkendt af alle OECD-lande. BEPS-rapporten kommer, som sagt, ikke med specifikke forslag til handling, men handlingerne er til gengæld nærmere beskrevet i en handlingsplan, som vil blive rullet ud i løbet af to år. Udrulningen forventes at være afsluttet i slutningen af Det forventes at BEPS og den tilhørende handlingsplan vil resultere i "den mest fundamentale ændring i internationale skatteregler siden 1920'erne". Denne bemærkning kom fra Angel Gurria, som er generalsekretæren i OECD, i forbindelse med lanceringen af handlingsplanen den 20. juli OECD har i forbindelse med BEPS identificeret en række karakteristiske kendetegn for situationer med forhøjet transfer pricing-risiko; Transaktioner med skattely Overførsel af immaterielle aktiver Omstruktureringer Renter, forsikringspræmier og royalty Underskud flere år i træk Utilstrækkelig eller slet ingen transfer pricing-dokumentation Usædvanlig stor gæld Ovenstående situationer vil højst sandsynligt øge risikoen for at blive udtaget til kontrol af SKAT. 9.1 OECDs Action Plan on Base Erosion and Profit Shifting OECD offentliggjorde i juli 2013 den ventede Action Plan on Base Erosion and Profit Shifting 82. Handlingsplanen udkom i tilknytning til OECDs indledende rapport Addressing Base Erosion and Profit Shifting 83 den 12. februar 2013 (BEPSrapporten). Handlingsplanen for BEPS indeholder 15 actions med tilhørende OECD (2013), Action Plan on Base Erosion and Profit Shifting, OECD Publishing OECD (2013), Addressing Base Erosion and Profit Shifting, OECD Publishing Side 53

54 tidsplaner. Handlingsplanen blev præsenteret på G topmødet i september 2013 i Sankt Petersborg, hvor BEPS var et af agendapunkterne. I et joint statement udtalte G20-lederne efter mødet bl.a. følgende:...tax avoidance, harmful practices and aggressive tax planning have to be tackled.we fully endorse the ambitious and comprehensive Action Plan.We welcome the establishment of the G20/OECD BEPS project Profits should be taxed where economic activities deriving the profits are performed and where value is created.in order to minimize BEPS, we call on member countries to examine how our own domestic laws contribute to BEPS and to ensure that international and our own tax rules do not allow or encourage multinational enterprises to reduce overall taxes paid by artificially shifting profits to low-tax jurisdictions. Det mest interessante ved den fælles udtalelse er, at BEPS-projektet bliver benævnt som et G20/OECD-projekt frem for at være et OECD-projekt, der er støttet af G20. Dette må anses for at være en væsentlig politisk styrkelse, at G20- lederne på denne måde tager projektet om bord som deres eget. Dette øger sandsynligheden for en gennemførelse af projektet efter hensigten. 85 Handlingsplanen identificerer en række forhold som skal sikre, at dobbeltbeskatningsoverenskomsterne ikke bruges uhensigtsmæssigt til at opnå dobbelt skattefrihed for en indtægt. 86 Den identificerer ligeledes nøgleområder i det internationale skattesystem, der giver anledning til bekymring i relation til BEPS. Dokumentet bygger videre på de tidligere identificerede fokusområder i BEPSrapporten fra februar og tilføjer retning og tidshorisont for det fremtidige arbejde på området. Handlingsplanen fastsætter parametre for hver handling, men efterlader betydelig frihed til de nedsatte arbejdsgrupper, hvad angår omfanget af deres anbefalinger. 84 G20 (forkortelse for Group of Twenty Finance Ministers and Central Bank Governors) er en gruppe af finansministre og centralbankledere fra 20 væsentlige økonomier: 19 lande og den Europæiske Union, som er repræsenteret via Præsidenten for Det Europæiske Råd og den Europæiske Centralbank. Landenes regeringsledere eller statsledere har også periodevis deltaget i møder, siden første møde i G-20 blev foreslået af den tidligere canadiske finansminister Paul Martin (senere, premierminister) til samarbejde og konsultation i forhold til områder i det internationale finansielle system. G20 undersøger, gennemgår og diskuterer politiske tiltag der kan medvirke til at fremme en stabil international økonomi OECDs "Base Erosion and Profit Shifting" initiative, Skat udland, 2013, nr. 9, S , Ann- Charlotte Beierholm & Søren Jesper Hansen 86 OECDs "Base Erosion and Profit Shifting" initiative, Skat udland, 2013, nr. 9, S , Ann- Charlotte Beierholm & Søren Jesper Hansen Side 54

55 OECDs handlingsplan bygger på allerede eksisterende regler for international beskatning, i stedet for at forkaste disse. OECD søger at begrænse unilaterale tiltag, da sådanne tiltag vil kunne føre til genindførsel af dobbeltbeskatning. Handlingsplanen indeholder en bred vifte af handlinger, og nogle vil givetvis være lettere at gennemføre end andre. Nedenstående illustrerer alle 15 aktionspunkter i handlingsplanen for BEPS (illustrationen er taget fra Deloitte webcast, der blev holdt d. 21. januar 2014: Base Erosion and Profit Shifting: Update on the OECDs Progress and Developments): Handlingsplanen fokuserer i høj grad på substans. Det gør sig for eksempel gældende i forhold til kommentarerne vedrørende reglerne for fast driftssted samt kommentarerne vedrørende behovet for overensstemmelse mellem transfer pricingforhold og reel værdiskabelse. Projektets fremtidige succes afhænger af, at de arbejdsprocesser, der skal føre til de endelige konkrete tiltag, følger de i handlingsplanen fastsatte rammer. Det vil også være afgørende, at der opnås input Side 55

56 fra erhvervslivet for at sikre, at tiltagene kan fungere i praksis, særligt i betragtning af den stramme tidsplan. Handlingerne vedrørende gennemsigtighed og oplysningskrav vil sætte virksomhederne under pres fra aktionærer, medier, NGO er m.m. Det er derfor vigtigt, at der findes en fælles tilgang og skabelon til disse oplysninger, som gør det lettere for virksomhederne at levere de nødvendige oplysninger for offentligheden på en forståelig måde. Projektets omfang, taget i betragtning, må den stramme tidsplan(se nedenstående, fra Deloitte webcast: Base Erosion and Profit Shifting: Update on the OECDs Progress and Developments) siges at være ambitiøs. Det bliver interessant at følge, hvilke konkrete tiltag arbejdsgrupperne kommer frem til i løbet af tidsplanens løbetid, og hvordan disse kan implementeres på nationalt og internationalt plan. I aktionspunkt 13 vil OECD genbehandle reglerne for transfer pricing-dokumentation. Side 56

57 10. Aktionspunkt 13 OECD offentliggjorde i juli 2013, som nævnt, en handlingsplan for BEPS, Aktionspunkt 13 deri fastslår, at OECD vil: ( ) develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries, according to a common template. 87 OECD vil, jf. overstående udmelding, i forbindelse med aktionspunkt 13 genbehandle reglerne for transfer pricing-dokumentation. Det skal blandt andet øge gennemsigtigheden for skattemyndigheder og sikre at virksomheder oplyser om deres globale indkomstallokation, økonomisk aktivitet og betalte skatter til alle relevante regeringer efter en fælles skabelon. Aktionspunktet bygger på aktionspunkt 5, der omhandler gennemsigtighed og aktionspunkt 12 der handler om evnen til at identificere risikoområder 88. Handlingsplanens aktionspunkt 13 noterer, at det centrale problem i administrationen af transfer pricing-regler er asymmetrien af information mellem skatteydere og skattemyndigheder. Dette underminerer potentielt administrationen af armslængdeprincippet og forbedrer mulighederne for BEPS. Derfor burde der udvikles regler om transfer pricing-dokumentation for at øge gennemsigtigheden for skattemyndighederne, samtidig med at man tager compliance 89 -omkostningerne for virksomheder med i overvejelsen. Denne big picture -tilgang, er den samme som er kendt fra OECDs White Paper om transfer pricing-dokumentation og skulle hindre en ensidig, indenlandsk tilgang til dokumentation, men i stedet hjælpe med at give 87 Se bilag 6 - Action Plan on Base Erosion and Profit Shifting, Action Se bilag 6 - Action Plan on Base Erosion and Profit Shifting, Action 5 & Compliance er fællesbegrebet for de love, bestemmelser, normer, standarder samt etiske regelsæt, som virksomheder skal eller vælger at overholde. Ikke kun for at sikre sig, at der ikke sker overtrædelser, men også for at imødegå risikoen for negativ påvirkning af virksomhedens forretningsmål eller omdømme. Side 57

58 skattemyndighederne en bedre forståelse af gruppen som helhed, for bedre at kunne identificere risikoområder. Ifølge aktionspunkt 13 i OECDs handlingsplan for BEPS, skal der ske en revision af de gældende regler for transfer pricing-dokumentation, samt en udvikling af en skabelon for den såkaldte land-for-land rapportering af indkomst, skatter og økonomisk aktivitet. Den 30. januar 2014 offentliggjorde OECDs det første udkast af den reviderede guide for transfer pricing-dokumentation og land-for-land rapportering, den såkaldte Discussion Draft for kommentering. Discussion draft en vil blive gennemgået senere, men kort sagt, indeholder den en række forslag vedrørende transfer pricing-dokumentation og dennes indhold, herunder bl.a.: masterfilen vs. den landespecifikke-fil, compliance-udfordringer, tidsfrister, indhold, sprog, bøder, fortrolighed, implementering og indeholder endvidere en liste over de punkter, som masterfilen skal indeholde. Man forventer at aktionspunkt 13 vil resultere i ændringer i OECDs Transfer Pricing Guidelines, samt anbefalinger vedrørende de nationale regler. Man forventer at der vil udkomme en rapport med resultaterne for aktionspunkt 13 i september 2014, herefter forventer man at implementere resultaterne i løbet af kort tid OECDs White Paper om transfer pricing-dokumentation Landes tilgang til dokumentation varierer betydeligt og derfor findes der alle mulige variationer af hvad man kræver i form af dokumentation. Dette er et aktuelt emne i transfer pricing-verdenen, hvor man søger at gøre dokumentationskravene mere standardiseret imellem landene, da det at transfer pricing-dokumentationskravene varierer fra land til land, gør det vanskeligt at konsolidere og effektivisere sin transfer pricing-dokumentation. Pt. er det ligeledes sådan at det er nødvendigt, at skræddersy sin transfer pricing-dokumentation til hvert land, og dette landespecifikke fokus afskærer det bredere perspektiv og herved er der risiko for manglende fokus på de væsentlige forhold. OECDs arbejdsgruppe har i den forbindelse, og i forbindelse med aktionspunkt 13 i handlingsplanen for BEPS, udarbejdet et White Paper omkring transfer pricing-dokumentation, der ligger op til en koordineret tilgang til dokumentationskrav. Side 58

59 OECDs White Paper pointere, at de nuværende regler om dokumentation i OECD Transfer Pricing Guidelines ikke længere er tilstrækkelige, da kapitel V er mere end 15 år gammelt og derfor ikke afspejler nutidens forhold. Der har tidligere været forsøg på at standardisere kravene til dokumentationerne, uden at dette for alvor er slået igennem i praksis. OECD anerkender, at udformningen af regler om transfer pricingdokumentation er, og fortsat vil være, omfattet af de nationale lovgivninger. OECDs White Paper belyser statussen vedrørende transfer pricingdokumentationsregler, reflekterer over formålene med dem og kommer med forslag til, hvorledes reglerne kan gøres mere enkle, således forstået, at dokumentationerne bliver enklere at udarbejde. Samtidigt er formålet også, at skattemyndighederne får en mere velegnet dokumentation til brug for deres risikovurderinger og transfer pricing-revisioner. Rapporten anfører, at den nødvendige forståelse af transfer pricingrisici på et overordnet niveau sædvanligvis vil kræve mere information, end man ofte opnår via den mere landefokuserende transfer pricing-dokumentation, som den kendes i dag. Der er fem kapitler i OECDs White Paper, som jeg vil gennemgå. Dog vil jeg ikke gennemgå introduktionen, da jeg har forholdt mig til denne i overstående tekst. De 5 kapitler kapitlerne indeholder følgende: 1) Introduktion 2) Beskrivelse af eksisterende vejledninger med videre, vedrørende transfer pricingdokumentation 3) Formålene med transfer pricing-dokumentationskravene 4) Et forslag til en trinvis udarbejdelse af transfer pricing-dokumentation 5) Udvikling af en fælles model for dokumentation Beskrivelse af eksisterende vejledninger m.v., vedrørende transfer pricingdokumentation Kravene til transfer pricing-dokumentation kan overordnet set inddeles i to forskellige grupper. For det første er det kravene i enkelte landes lovgivninger. For det andet Side 59

60 findes der transfer pricing-dokumentationsregelsæt udstedt af internationale organisationer. Gruppe 1: De landespecifikke transfer pricing-dokumentationsregler Der er i praksis stor forskel på, hvad der forstås ved en fyldestgørende transfer pricing-dokumentation. I nogle lande relaterer udtrykket sig primært til interne virksomhedsdokumenter vedrørende specifikke transaktioner. I andre lande relaterer transfer pricing-dokumentationen sig til et mere standardiseret dokument. Uanset den internationale kontekst, som transfer pricing er en del af, afspejler de nationale transfer pricing-dokumentationsregler ofte national skattelovgivning. Dermed også være sagt, at der kan være en betydelig forskel på de krav, der stilles til udarbejdelsen af en (national) transfer pricing-dokumentation. OECDs White Paper noterer, at multinationale virksomheder (MNV er) skal aflevere transfer pricingdokumentation i flere lande og dermed skal virksomhederne imødekomme ofte ret forskellige krav. Udover indholdet kan der også være betydelige forskelle i den form, som oplysningerne skal afleveres i fra ret skematiske oplysninger til meget specifikke og forud fastlagte beskrivelser. OECDs White Paper konstaterer, at det ikke er ualmindeligt at kravene til en transfer pricing-dokumentation er en ensidig analyse, som fokuserer på de hjemlige regler m.v., af de kontrollede transaktioner. Rapporten kommer også frem til, at transfer pricing-dokumentation ikke altid underbygger en tilstrækkelig forståelse af MNV ens globale forretningsstrategier. Udover det noterer rapporten også, at langt de fleste lande kræver en beskrivelse af virksomheders organisatoriske opbygning globalt, men at kun få lande kræver mere omfattende beskrivelser af de samlede forretningsaktiviteter. Der ses ofte heller ikke oplysningskrav vedr. virksomheders samlede skattebetaling, herunder fordelingen af den, ligesom der kun sjældent ses krav om beskrivelse af dens værdikæde globalt set. Formålene med de eksplicitte transfer pricing-dokumentationskrav der er stillet i de enkelte landes regler, synes ikke altid lige let gennemskuelige. I mange tilfælde ser det nemlig ud til, at skattemyndighederne har ønsket at opnå en mere generel information om skatteyderen og en ligeledes mere generel beskrivelse af transfer Side 60

61 pricing-politikken. Andre lande synes at have udformet deres dokumentationskrav således, at rigtigt meget af den dokumentation, som skattemyndigheder ellers ville have indkrævet som led i en transfer pricing-kontrol, allerede er til stede i transfer pricing-dokumentationen. OECDs White Paper kritiserer at der generelt er lagt for lidt vægt på betydningen af de oplysninger, som vil gøre det lettere at foretage en transfer pricing risikoanalyse, altså en analyse med henblik på at vurdere, om der skal iværksættes en transfer pricing-kontrol fra skattemyndighedernes side. Gruppe 2: Transfer pricing-dokumentationsregler udstedt af internationale organisationer. I dette afsnit af rapporten får man et overblik over de eksisterende retningslinjer fra internationale organisationer. I alle tilfælde er disse retningslinjer oprindeligt blevet udarbejdet med henblik på at standardisere kravene til transfer pricingdokumentation. Rapporten gennemgår kapitel V i OECDs Transfer Pricing Guidelines, EUTPD, PATA-dokumentation og ICC Proposals. I dette afsnit af opgaven vil jeg henvise til det der tidligere er skrevet om OECDs Transfer Pricing Guidelines, EUTPD og PATA-dokumentation. ICC står for International Chamber of Commerce. I deres forslag foreslås, at MNV er skal kunne udarbejde en transfer pricing-dokumentation, som grundlæggende skulle kunne anvendes overfor alle skatteadministrationer, hvor der her tages højde for, at dokumentationen i rimeligt omfang skal afspejle nationale krav, og når den er indsendt, skal man ikke kunne mødes med indkomstjusteringer eller bøder. I praksis har disse anbefalinger ikke udviklet sig til en international anerkendt standard. Formålene med transfer pricing-dokumentationskravene Helt overordnet bør ethvert tilløb til forenkling af transfer pricingdokumentationskravene baseres på overvejelser om, hvad formålet med at anmode om det egentlig er. Ifølge rapporten er der mindst tre forskellige årsager, der går ud på følgende: når lovgiver ønsker at få en transfer pricing-dokumentation udarbejdet, skyldes det, blandt andet, at sikre at skattemyndighederne får den nødvendige information med henblik på, at kunne foretage en transfer pricing-risikovurdering som indledning til en eventuel transfer pricing-revision, og at sikre at den skattepligtige Side 61

62 har haft transfer pricing med i sine overvejelser, forinden de koncerninterne afregningspriser med videre, er blevet fastlagte. Der har i seneste år været fokus på indførelse af transfer pricingrisikovurderingssystemer, der sigter mod at opfylde transfer pricing-reglerne. Dette fokus på transfer pricing-risikovurdering kommer fra erkendelsen af, at effective risk identification and assessment are the key steps which enable tax administrations to select the right cases for transfer pricing audits or inquiries. 90 Da skattemyndigheder kun har begrænsede ressource til rådighed, er det selvfølgelig vigtigt for dem at kunne sandsynliggøre udfaldet af en potentiel transfer pricing-revision. I dette afsnit i rapporten, bliver transfer pricing forms(blanketter) også inddraget. I afsnittet bliver det nævnt, at nogle skattemyndigheder kræver, at selskaber skal supplere selvangivelse ved at udfylde en formular, der indeholder yderligere oplysninger om transfer pricing. Generelt vil de fleste lande kræve at skatteydere rapportere, om de har indgået grænseoverskridende kontrollerede transaktioner, og hvis de kan svare ja til dette, skal de give visse yderligere oplysninger. OECD påpeger i dette afsnit af rapporten, vigtigheden af at skattemyndighederne er i stand til at få adgang til den information, der er nødvendig for at de kan foretage en risikovurdering, at de heraf kan udlede, om der skal iværksættes en skatterevision, og at det ligeledes er nødvendigt at skattemyndighederne om nødvendigt kan rekvirere yderligere materiale, når beslutningen om at iværksætte en skatterevision først er truffet. Det er ligeledes vigtigt, at skatteyder mere eller mindre skal være tvunget til at vurdere/reflektere over deres compliance med armslængdeprincippet enten før eller samtidigt med aflevering af selvangivelsen. Et forslag til en to-ledende struktur ved udarbejdelse af transfer pricingdokumentation I denne del af rapporten beskrives mere overordnet en struktur og dokumentationskrav i et sæt mulige transfer pricing-dokumentationsregler. Reglerne fokuserer i højere grad i dag på den nødvendige form for - og mængde af - information, der vil gøre det lettere for skattemyndighederne at foretage en transfer 90 Se bilag 7 - OECDs White Paper on Transfer Pricing Documentation, s. 13 Side 62

63 pricing-risikoanalyse, og som samtidigt vil gøre det lettere at vurdere, om skatteyder i god tro har selvangivet i overensstemmelse med armslængdeprincippet. Ifølge rapporten har den to-ledede struktur, som er fastlagt i EUTPD, potentialet i sig til at lette opfyldelsen af dokumentationskravene. Således kan den del af informationen, der er relevant for skattemyndighederne i alle de lande, hvor MNV en er til stede, samles i masterfilen, og den kan så suppleres med det nødvendige antal landespecifikke transfer pricing-dokumentation, også kaldet den lokale fil. Det vil være naturligt, at masterfilen indeholder oplysninger i form af en overordnet forretningsbeskrivelse og funktionsanalyse, oplysninger om konsolideret indkomst, skatteprocenter og gældsstruktur. Den globale masterfile skal derimod ikke omfatte en specifik transfer pricing-analyse vedrørende individuelle transaktioner. De skal fremgå af den landespecifikke fil. Hvis man vælger den overstående model, at de enkelte landes skattemyndigheder alle får en kopi af masterfilen, kan indholdet af den landespecifikke fil reduceres til identifikation af de relevante grænseoverskridende koncerninterne transaktioner, en detaljeret funktionsanalyse af forretningsaktiviteter i den lokale enhed og skatteyders analyse og beskrivelse af den bedst egnede transfer pricing-metode, herunder sammenlignelige data. Udvikling af en fælles model for dokumentation I et forsøg på at bevæge sig i retning af en enklere og mere effektiv måde at opfylde transfer pricing-dokumentationskravene på, indeholder denne White Paper et forslag til et sæt dokumentationsregler, som skulle opfylde de nødvendige formål. Denne fremgangsmåde er opbygget som en toleddet struktur i form af en masterfile og en lokal fil. Det foreslås, at masterfilen kan opbygges således: 1) Oversigt over gruppen af den multinationale virksomhed (MNV en) 2) Beskrivelse af MNV ens forretningsmæssige aktiviteter 3) Information om MNV ens immaterielle aktiver 4) Information om MNV ens koncerninterne finansielle aktiviteter 5) Information om MNV ens finansielle og skattemæssige forhold Side 63

64 Informationen indeholdt i den landespecifikke del af transfer pricing-dokumentationen skal være et supplement til masterfilen, og den skal sikre at skatteyder overholder armslængdeprincippet vedrørende de relevante transaktioner. Den skal også indeholde oplysninger af relevant finansiel karakter, sammenlignelighedsanalyser og en beskrivelse af den anvendte transfer pricing-metode. Ikke alle kontrollerede transaktioner bør dokumenteres; der bør sættes minimumsbarrer ind, men selvfølgelig under respekt af lokale forhold. OECD afslutter sit White Paper med en udmelding om, at forslagene til indholdet af en ny transfer pricing-dokumentationsstandard repræsenterer afbalancerede hensyn mellem de offentliges og virksomheders interesser. OECD konkludere til sidst, at rapporten ikke sigter mod at løse samtlige erkendte problemer vedrørende transfer pricing-dokumentation, men at man håber at få sat en debat i gang, som vil gøre dokumentationsprocessen bedre, mere målrettet og enklere for alle involverede parter. Dette afsnit af skrevet ved hjælp af og inspiration fra Philip Noes artikel: OECDs White Paper om transfer pricing-dokumentation fra Skat udland, 2013, nr. 12, S Discussion draft on transfer pricing documentation and Country-by-country reporting Den 30. januar 2014 udgav OECD sit første udkast til de reviderede retningslinjer i OECDs Transfer Pricing Guidelines om transfer pricing-dokumentation og land-for-land rapportering i form af et Discussion Draft (OECDs Discussion Draft on Transfer Pricing Documentation and CbC Reporting). Dette følger aktionspunkt 13 i handlingsplanen for BEPS, hvilket opfordrede til - blandt en lang række andre ting - en gennemgang af de eksisterende transfer pricing-dokumentationsregler og udviklingen af en skabelon til land-for-land rapportering af indtægter, skatter og økonomisk aktivitet for skattemyndighederne. Denne rapport tager sigte på at standardisere den tilgang til global dokumentation og øge gennemsigtigheden for virksomhedens globale land-for-land resultater. Formålet med at kræve transfer pricing-dokumentation er, som sagt, at sørge for, at skattemyndighederne har de nødvendige oplysninger til at foretage en transfer Side 64

65 pricing-risikovurdering, hvilket vil sige, at sikre, at skatteyderne har taget følgende i betragtning: transfer pricing krav i fastsætning priser og andre betingelser for transaktioner mellem associerede virksomheder og i rapporteringen af indkomsten fra sådanne transaktioner i deres selvangivelser, samt give skattemyndighederne de oplysninger, de behøver for at foretage en passende grundig revision af de enheder, der er skattepligtige i deres jurisdiktion. OECD tror at disse mål bør overvejes i udformningen af nogle passende transfer pricing-dokumentationskrav, og at discussion draft ens reviderede vejledning af kapitel V i OECDs Transfer Pricing Guidelines er et vigtigt skridt i at bringe overholdelse af kravene i overensstemmelse med de aktuelle globale forhold. Siden reglerne blev udarbejdet i midten af 90'erne, har der været en dramatisk stigning i mængden og kompleksiteten af den internationale koncerninterne samhandel og den øget kontrol af transfer pricing ved skattemyndighederne har resulteret i en betydelig stigning i udgifter til overholdelse for skatteydere. Det nye udkast til har til formål at tilføre et notat om rimelighed samt klarhed til disse krav. Vejledningen fra discussion draft en har, som sagt, til formål at erstatte den nuværende transfer pricing-dokumentationsvejledning, der er indeholdt i kapitel V i OECDs Transfer Pricing Guidelines, som blev vedtaget i I modsætning til den nuværende version af kapitel V, kræver discussion draft en en liste over dokumenter, der skal indgå i en transfer pricing-dokumentationspakke. OECDs Discussion Draft uddyber også OECDs White Paper om transfer pricingdokumentation. Som reflekteret i White Paper om transfer pricing-dokumentation, foreslår OECDs Discussion Draft en fælles tilgang til transfer pricing-dokumentation. Dvs. at den trinvise udarbejdelse af dokumentation, som vil indebære en global masterfil sammen med de landespecifikke filer. Discussion Draft en indeholder også en foreslået land-for-land rapporteringsskabelon, som vil kræve at de multinationale selskabers grupper giver detaljerede information om hver enkelt enhed i koncernen. Discussion Draft en overvejer også om den nye land-for-land rapporteringsskabelon skal indgå i masterfilen, men her har der også været snak om, hvorvidt skabelon i stedet bør gives til skattemyndighederne som et særskilt dokument. Side 65

66 Discussion Draft en noterer at oplysningerne i land-for-land rapporteringsskabelon "kan være nyttig i risikovurderingsprocesser" 91, men den konstaterer imidlertid også at oplysningerne der bliver angivet i rapporteringsskabelonen "ikke bør anvendes som en erstatning for en detaljeret transfer pricing-analyse", og at den "ikke vil udgøre afgørende bevis for, om transfer pricing er, eller ikke er passende 92. Country-by-Country template / land-for-land rapporteringsskabelon Ifølge discussion draft en skal det nye kapitel V i OECDs Transfer Pricing guidelines indeholde et bilag med en land-for-land rapporteringsskabelon. Skabelonen bliver muligvis en del af masterfilen. Land-for-land rapportering betyder, at virksomheder skal indberette detaljerede information fra hvert land, de opererer i. I dag er virksomheder kun forpligtet til at rapportere for hele gruppen som helhed, hvilket gør skatteunddragelse muligt i tillæg til, at det gør det sværere for skattemyndighederne at opdage dette. Formålet med land-for-land rapportering er således at opnå større gennemsigtighed og bedre kontrol af de finansielle strømme mellem multinationale selskaber og de involverede regeringer. Dette vil bidrage til at bekæmpe skatteunddragelse i tillæg at belyse mulighederne for dette. Udkastet til land-for-land rapporteringsskabelonen vil kræve oplysninger med hensyn til hver enkelt enhed i en MNV gruppe. De enheder, der er omfattet er moderselskabet, og alle enheder, der anses for at være " associerede virksomheder " i henhold til OECD Transfer Pricing Guidelines. Hvert fast driftssted, som har en særskilt resultatopgørelse, finansiel rapportering, intern ledelse, eller skattemæssige formål vil blive anset for at være en enhed og vil blive indberettet under det land, hvor den er beliggende. Skabelonen vil bl.a. kræve følgende oplysninger i forbindelse med hver enkelt enhed (inklusive faste driftssteder) i en MNV gruppe: 91 Se bilag 8 OECDs Discussion Draft on Transfer Pricing Documentation and CbyC Reporting, S.6, pkt Se bilag 8 - OECDs Discussion Draft on Transfer Pricing Documentation and CbyC Reporting S.6, pkt. 21 Side 66

67 Sted for effektiv ledelse Stedet for effektiv ledelse(virksomhedens hovedsæde). Stedet for en effektiv ledelse burde blive fastlagt på grundlag af artikel 4 i OECDs modeloverenskomst og dets Kommentar. Vigtige forretningsaktivitets kode(r) De forretningsmæssige aktiviteter skal informeres ved hjælp af en liste over koder, listen har til formål at identificere de vigtige forretningsmæssige aktiviteter eller enhedernes aktiviteter: For kategorien "andet", skal man give en beskrivelse af aktiviteten i den "supplerende information"-boks i skabelonen Indtjening Indtjening i virksomheden fra salg af inventar og ejendomme, tjenesteydelser, royalties, pristillæg og eventuelle andre beløb der er modtaget fra både forbundne og uafhængige parter skal indberettes. Side 67

68 For indtægter og andre finansielle oplysninger, der kræves i skabelonen, vil diskussion draft en angive, at det er hensigten, at de indberettede beløb vil blive taget direkte fra virksomhedens lovpligtige regnskab. Hvis det lovpligtige regnskab ikke er udarbejdet, skal der anvendes et revideret regnskab udarbejdet til andre formål (f.eks. finansiering, lovgivning, skat osv.). Hvis det reviderede regnskabet ikke findes, bør virksomhedens interne driftsregnskaber anvendes. Det er ikke påkrævet at beløbet af indtægter eller andre finansielle informationer skal indberettes i virksomhedens funktionelle valuta og i henhold til regnskabsstandarder, der bruges af virksomheden (f.eks. IFRS, lokal GAAP). MNV gruppen kan vælge i stedet for at indberette alle beløb, som fastsættes i henhold til konsekvente regnskabsprincipper og oversat på et ensartet grundlag for en fælles valuta. Resultat før skat Virksomhedens indtjening skal rapporteres baseret på den samme datakilde beskrevet i forbindelse med ovenstående afsnit om indtjening. Kontant indkomstskat betalt af selskabets enkelte enhed til det pågældende land Beløbet af indkomstskat der faktisk er betalt til det land, hvor selskabets enheder har fast driftssted, i det relevante regnskabsår skal rapporteres, ved hjælp af den samme valuta, som anvendes i rapporteringen af overskud før skat. Hvis skat af en kombineret gruppe betales af én enhed, bør skatten fordeles mellem medlemmer af en sådan gruppe i forhold til deres andele af EBIT (resultat før renter, skat), i den sammenlagte koncern. Kontant indkomstskat betalt til alle andre lande Beløbet af indkomstskat der er betalt af enheden til alle andre lande for det pågældende regnskabsår skal rapporteres samlet, ved hjælp af den samme valuta, som benyttes i rapportering af indtjening. Side 68

69 Samlet kildeskat 93 betalt Det samlede beløb af kildeskatter betalt med hensyn til betalinger modtaget fra andre enheder skal indberettes. Dette vil ikke inkludere beskæftigelsesrelateret kildeskat eller andre kildeskatter. Erklæret kapital og akkumuleret indtjening Enhedens angivne kapital og akkumulerede indtjening afspejlet på balancen i årsregnskabet skal rapporteres ved årets udgang. Antal medarbejdere Det samlede antal medarbejdere på lønningslisten i den enhed, på den sidste dag i det relevante regnskabsår skal rapporteres, uanset medarbejderens placering. Medarbejdere, der er udstationeret fra andre gruppemedlemmer bør medtages i forhold til den enhed, hvor de er udstationeret. Samlet medarbejderudgift Den samlede medarbejderudgift i enheden/virksomheden, herunder alle betalinger, der ikke er kontante, eller fordele såsom medarbejder aktieprogrammer skal indberettes. Materielle aktiver andet end likvider Den regnskabsmæssige værdi af materielle aktiver, bortset fra likvider, immaterielle aktiver og finansielle aktiver, der afspejles på enhedens balance ved årets udgang skal rapporteres. Koncerninterne betalinger Det samlede beløb for royalties, renter og servicegebyrer der er betalt af virksomheden til andre enheder i koncernen og modtaget af virksomheden fra andre enheder i koncernen skal rapporteres særskilt i de sidste seks kolonner af skabelonen. 93 Kildeskat er en type indkomstskat, som opkræves ved kilden typisk således, at skatten indeholdes af arbejdsgiveren i forbindelse med udbetaling af løn. Arbejdsgiveren sender så skatten til skattevæsenet. Side 69

70 Yderligere oplysninger Skabelonen indeholder også en "supplerende information"-boks, hvor man kan rapportere enhver oplysning eller hvor skatteyderen kan give en forklaring, hvor det anses at være nødvendigt, eller som ville lette forståelsen af de oplysninger, der er indberettet i skabelonen. Formålet med land-for-land rapportering og åbenhed omkring skattebetalinger er, at forebygge eller minimere muligheden for at multinationale selskaber skjuler, hvor meget af deres indtjening der ikke bliver betalt skat af, samt belyse overfor værtslandene, hvor meget de betaler i skat og dermed er rapporteringen en vigtig del af indsatsen for at øge gennemsigtigheden og forseglingen af skattemæssige huller Betydning for dansk transfer pricing-praksis Det må forventes, at OECDs discussion draft vil danne grundlag for det reviderede kapitel V i OECD Transfer Pricing Guidelines, hvilket forventes at blive gennemført i Da Danmarks transfer pricing-regler er på linje med OECDs retningslinjer, vil de danske transfer pricing-dokumentationskrav være tilbøjelige til at følge de nye OECDregler. Dette vil omfatte den to-ledende strukturs tilgang til transfer pricingdokumentation, i form af en master- og landespecifik fil, samt land-for-land rapportering, som vil indgå i fællesdokumentationen. Efter min opfattelse er det usandsynligt, at der kommer banebrydende ændringer i form af den landespecifikke-fil i den nuværende danske transfer pricing-lovgivning, da de danske dokumentationskrav allerede er langt fremme i form af SKL 3 B, samt dokumentationsbekendtgørelsen og den hertil juridiske vejledning. Det er klart at OECDs White Paper og Discussion Draft går et skridt videre i forhold til masterfilen og land-for-land skabelonen og det kommer helt sikkert til at have en konsekvens for de danske transfer pricing-dokumentationskrav i fremtiden, da de foreslåede krav til masterfilen og land-for-land rapportering går betydeligt længere end den nuværende danske praksis. Det er dog endnu uvist i hvor stor udstrækning, indvirkningen af aktionspunkt 13 i handlingsplanen for BEPS kommer til at have for dansk transfer pricing-praksis. En rapport om resultaterne for aktionspunkt 13 Side 70

71 forventes at udkomme i september Herefter vil vi kunne få et klarere billede omkring konsekvenserne og hvorvidt de bliver ændringer vil have indflydelse i dansk transfer pricing-praksis. I det omfang, at en multinational virksomhed har hovedsæde i Danmark, vil ansvaret for at forberede masterfilen og land-for-land rapporteringen falde på det danske selskab. De foreslåede krav til masterfilen og land-for-land rapportering går, som sagt, betydeligt længere end den nuværende danske praksis og dette kan øge byrden for de danske virksomheder i form af indsamling af alle de nødvendige oplysninger til de lokale skattemyndigheder. Dog tror jeg, at mange danske selskaber godt kan se idéen omkring masterfilen, da mange multinationale virksomheder oplever et stadig stigende krav til den mængde dokumentation der kræves fra forskellige lande og de krav der bliver ændret for land til land i transfer pricing-dokumentationsaflæggelsen er ressourcekrævende og her er det min opfattelse, at selv relativt små forskelle i kravene til måden, som en transfer pricing-dokumentation skal udarbejdes på, fører til betydelige compliance-omkostninger, også selv om indholdet alligevel er stort set ens. Derfor er det måske en fordel for de multinationale selskaber som har hovedsæde i Danmark, at der kommer mere ensartede krav til transfer pricingdokumentationen. Man kan dog diskutere om de nye tiltag vil lette arbejdsbyrden for de danske skattemyndigheder, i det at de nye krav til en transfer pricingdokumentation kommer til at være rimelig omfangsrig og kan betyde at der ligeledes kommer problemer for visse skatterevisorer, i forhold til overskueligheden af alle oplysningerne. Side 71

72 11. Konklusion De danske regler om transfer pricing-dokumentation fremgår hovedsageligt af SKL 3 B, og blev indført ved lov nr. 131 af 25/ Til bestemmelsen knytter sig SKL 17, stk. 3 og SKL 14, stk. 4, der indeholder hjemmel til at pålægge bøder, hvis transfer pricing-dokumentationen indsendes for sent eller ikke er fyldestgørende. Reglen i SKL 3 B indeholder to typer særlige informationspligter. For det første skal der samtidigt med selvangivelsen indsendes det såkaldte 3B-skema(SKAT blanket nr ), hvorpå de skattepligtige som supplement til selvangivelsen skal afgive summariske oplysninger om arten og omfanget af kontrollerede transaktioner. For det andet skal der udarbejdes en transfer pricing-dokumentation for, hvorledes priser og vilkår for de kontrollerede transaktioner var fastsat, men dokumentationen skal alene indsendes til SKAT på skattemyndighedernes opfordring. Dokumentation skal være af en sådan art, at den kan danne grundlag for en vurdering af, om priser og vilkår var fastsat i overensstemmelse med hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter. Ovenstående 2 informationspligter, er hhv. oplysningspligten og dokumentationspligten Dokumentationsbekendtgørelsen (BEK nr. 42 af den 24. januar 2006) specificerer reglerne til dokumentationen. Hertil kommer SKATs Juridiske Vejledning, kap. C.D. 11. Det er muligt efter dokumentationsbekendtgørelsen 10 at udarbejde dokumentation som en EU transfer pricing-dokumentation. I øvrigt er det således, at dansk transfer pricing-praksis bygger på OECDs Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Såfremt den skattepligtige ikke har udarbejdet (en fyldestgørende) skriftlig transfer pricing-dokumentation kan den skattepligtige indkomst for så vidt angår de kontrollerede transaktioner ansættes skønsmæssigt, ligeledes kan man blive pålagt en bøde for manglende eller mangelfuld transfer pricing-dokumentation. Aktionspunkt 13 i handlingsplanen for BEPS vil genbehandle reglerne for transfer pricing-dokumentation. Dette skal resultere i øget gennemsigtighed for Side 72

73 skattemyndigheder og sikre at virksomheder oplyser om deres globale indkomstallokation, økonomisk aktivitet og betalte skatter til alle relevante regeringer efter en fælles land-for-land skabelon. I det man forventer at aktionspunkt 13 vil resultere i en ændring af kapitel V i OECDs Transfer Pricing Guidelines, kan dette have en effekt på de danske transfer pricingdokumentationsregler, da disse følger OECDs Transfer Pricing Guidelines. Ændringen i dansk transfer pricing-dokumentationspraksis kan derfor komme til at omfatte den toledende tilgang til dokumentationen, i form af en master- og landespecifik-fil, samt land-for-land rapportering, som sandsynligvis vil blive implementeret i de danske transfer pricing-dokumentationsregler. Side 73

74 12. Kildekritik Igennem hele opgaven, er der forsøgt anvendelse af materiale af høj faglig kvalitet. De primære kilder der er benyttet i opgaven, er overvejende lovtekst og vejledninger fra skattemyndighederne og OECD. Opgaven er hovedsageligt udarbejdet på baggrund af disse kilder. Disse kilder anses for at værende pålidelige og kan betragtes som objektive kilder, uden nogen form for vægtning til den ene eller anden side. De anvendte internetsider anslås for at danne en høj grad af pålidelighed. Der er forsøgt at anvende internetsider, som er så vidt mulige objektive overfor deres kontekst til opgaven. Hovedsageligt er SKATs hjemmeside blevet brugt, som er beroet på fakta og vejledning. Der anses derfor ingen spekulationer, for niveauet af dette materiale. Der er ingen af de benyttede kilder, hvor der kan sættes spørgsmålstegn ved objektiviteten og kvaliteten af materialet, da materialet i høj grad er udarbejdet af faglige instanser med vægtning på objektivitet. Side 74

75 13. Litteraturliste Bøger: OECD: OECD Transfer Pricing Guidelines for Multinational Enterprices and Tax administration, OECD Publishing, 2010 Anders Oreby Hansen og Peter Andersen, Transfer Pricing i Praksis, Magnus Informatik, 2008 Birgitte Bundgaard, Jesper Wang-Holm, Lene Nielsen: Transfer Pricing Hvordan fastsættes og dokumenteres prisen, når virksomheder handler internt, Told- og Skattestyrelsen & Dansk Industri Niels Winter-Sørensen, OECDs modeloverenskomst 2010 med kommentarer, Magnus Informatik, 5. udgave 2012 Artikler og udgivelser: Ann-Charlotte Beierholm & Søren Jesper Hansen, OECDs "Base Erosion and Profit Shifting" initiative, Skat udland, 2013, nr. 9, S OECD (2013), Addressing Base Erosion and Profit Shifting, OECD Publishing OECD (2013), Action Plan on Base Erosion and Profit Shifting, OECD Publishing OECD (2014), Discussion Draft on Transfer Pricing Documentation and CbyC Reporting, OECD Publishing OECD (2013), White Paper on Transfer Pricing Documentation, OECD Publishing Philip Noes, Justeringer af bødereglerne for manglende og mangelfuld transfer pricing-dokumentation m.v., Skat udland, 2012, nr. 7, S Philip Noes, OECDs White Paper om transfer pricing-dokumentation, Skat udland, 2013, nr. 12, S. 817 Lovgivninger: Bekendtgørelse om dokumentation af prisfastsættelsen af kontrollerede transaktioner, BEK nr. 42 af 24/01/2006 Bekendtgørelse af skattekontrolloven Bekendtgørelse af lov om påligningen af indkomstskat til staten (ligningsloven) Side 75

76 Vejledninger: Den Juridiske Vejledning 2014 Internet: Andet: Generelle diskussioner og materiale fra undervisning i faget Transfer Pricing i Multinationale koncerner, Christian Plesner Rossing og Peder Reuther, Copenhagen Business School, efteråret 2013 Side 76

77 14. Bilag Bilag udgør den resterende del af opgaven Side 77

78 Bilag 1

79 Ligningsloven 2 2. Skattepligtige, 1) hvorover fysiske eller juridiske personer udøver en bestemmende indflydelse, 2) der udøver en bestemmende indflydelse over juridiske personer, 3) der er koncernforbundet med en juridisk person, 4) der har et fast driftssted beliggende i udlandet, 5) der er en udenlandsk fysisk eller juridisk person med et fast driftssted i Danmark, eller 6) der er en udenlandsk fysisk eller juridisk person med kulbrintetilknyttet virksomhed omfattet af kulbrinteskattelovens 21, stk. 1 eller 4, skal ved opgørelsen af den skatte- eller udlodningspligtige indkomst anvende priser og vilkår for handelsmæssige eller økonomiske transaktioner med ovennævnte parter i nr. 1-6 (kontrollerede transaktioner) i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter. Med juridiske personer i nr. 1 og stk. 3 sidestilles selskaber og foreninger m.v., der efter danske skatteregler ikke udgør et selvstændigt skattesubjekt, men hvis forhold er reguleret af selskabsretlige regler, en selskabsaftale eller en foreningsvedtægt. Stk. 2. Ved bestemmende indflydelse forstås ejerskab eller rådighed over stemmerettigheder, således at der direkte eller indirekte ejes mere end 50 pct. af aktiekapitalen eller rådes over mere end 50 pct. af stemmerne. Ved bedømmelsen af, om den skattepligtige anses for at have bestemmende indflydelse på en juridisk person, eller om der udøves en bestemmende indflydelse over den skattepligtige af en juridisk eller fysisk person, medregnes aktier og stemmerettigheder, som indehaves af koncernforbundne selskaber, jf. stk. 3, af personlige aktionærer og deres nærtstående, jf. ligningslovens 16 H, stk. 6, eller af en fond eller trust stiftet af moderselskabet selv eller af de nævnte koncernforbundne selskaber, nærtstående m.v. eller af fonde eller truster stiftet af disse. Tilsvarende medregnes ejerandele og stemmerettigheder, som indehaves af andre selskabsdeltagere, med hvem selskabsdeltageren har en aftale om udøvelse af fælles bestemmende indflydelse. Tilsvarende medregnes ejerandele og stemmerettigheder, som indehaves af en person omfattet af kildeskattelovens 1 eller et dødsbo omfattet af dødsboskattelovens 1, stk. 2, i fællesskab med nærtstående eller i fællesskab med en fond eller trust stiftet af den skattepligtige eller dennes nærtstående eller fonde eller truster stiftet af disse. Som nærtstående anses den skattepligtiges ægtefælle, forældre og bedsteforældre samt børn og børnebørn og disses ægtefæller eller dødsboer efter de nævnte personer. Stedbarns- og adoptivforhold sidestilles med oprindeligt slægtskabsforhold. Stk. 3. Ved koncernforbundne juridiske personer forstås juridiske personer, hvor samme kreds af selskabsdeltagere har bestemmende indflydelse, eller hvor der er fælles ledelse. Stk. 4. En juridisk eller fysisk person anses for udenlandsk, hvis personen er hjemmehørende i en fremmed stat, Færøerne eller Grønland, herunder efter bestemmelserne i en dobbeltbeskatningsoverenskomst. Stk. 5. 3) Ved ændringer i ansættelsen af den skatte- eller udlodningspligtige indkomst i henhold til stk. 1, kan den skattepligtige undgå yderligere følgeændringer (sekundære justeringer) ved at forpligte sig til betaling i overensstemmelse med de i stk. 1 anvendte priser og vilkår. Det er en forudsætning for anvendelsen af 1. pkt., at den påtagne forpligtelse også opfylder de i stk. 1 anførte betingelser. 1. pkt. gælder ikke, i det omfang den påtagne forpligtelse er omfattet af 16 E. Ved kontrollerede transaktioner med udenlandske fysiske og juridiske personer og faste driftssteder finder 1. pkt. kun anvendelse, såfremt den pågældende udenlandske skattemyndighed foretager en beskatning, der er i overensstemmelse med de priser og vilkår, der er lagt til grund ved ansættelsen af den skattepligtige indkomst i henhold til stk. 1. Stk. 6. Det er en forudsætning for at nedsætte ansættelsen af den skatte- eller udlodningspligtige indkomst i henhold til stk. 1, at der foretages en korresponderende forhøjelse af den anden part. Det er en forudsætning for forhøjelse af anskaffelsessummer, at der foretages en korresponderende ansættelse af den anden part. Ved kontrollerede transaktioner med udenlandske fysiske eller juridiske personer og faste driftssteder er det en forudsætning, at den korresponderende indkomst medregnes ved indkomstopgørelsen i det pågældende andet land.

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81 Skattekontrolloven 3 B 3 B. Skattepligtige, 1) hvorover fysiske eller juridiske personer udøver en bestemmende indflydelse, 2) der udøver en bestemmende indflydelse over juridiske personer, 3) der er koncernforbundet med en juridisk person, 4) der har et fast driftssted beliggende i udlandet, 5) der er en udenlandsk fysisk eller juridisk person med et fast driftssted i Danmark, eller 6) der er en udenlandsk fysisk eller juridisk person med kulbrintetilknyttet virksomhed omfattet af kulbrinteskattelovens 21, stk. 1 eller 4, skal i selvangivelsen afgive oplysninger om art og omfang af handelsmæssige eller økonomiske transaktioner med ovennævnte parter i nr. 1-6 (kontrollerede transaktioner). Med juridiske personer i nr. 1 og stk. 3 sidestilles selskaber og foreninger m.v., der efter danske skatteregler ikke udgør et selvstændigt skattesubjekt, men hvis forhold er reguleret af selskabsretlige regler, en selskabsaftale eller en foreningsvedtægt. 1, stk. 2, finder tilsvarende anvendelse. Stk. 2. Ved bestemmende indflydelse forstås ejerskab eller rådighed over stemmerettigheder, således at der direkte eller indirekte ejes mere end 50 pct. af aktiekapitalen eller rådes over mere end 50 pct. af stemmerne. Ved bedømmelsen af, om den skattepligtige anses for at have bestemmende indflydelse på en juridisk person, eller om der udøves en bestemmende indflydelse over den skattepligtige af en juridisk eller fysisk person, medregnes aktier og stemmerettigheder, som indehaves af koncernforbundne selskaber, jf. stk. 3, af personlige aktionærer og deres nærtstående, jf. ligningslovens 16 H, stk. 6, eller af en fond eller trust stiftet af moderselskabet selv eller af de nævnte koncernforbundne selskaber, nærtstående m.v. eller af fonde eller truster stiftet af disse. Tilsvarende medregnes ejerandele og stemmerettigheder, som indehaves af andre selskabsdeltagere, med hvem selskabsdeltageren har en aftale om udøvelse af fælles bestemmende indflydelse. Tilsvarende medregnes ejerandele og stemmerettigheder, som indehaves af en person omfattet af kildeskattelovens 1 eller et dødsbo omfattet af dødsboskattelovens 1, stk. 2, i fællesskab med nærtstående eller i fællesskab med en fond eller trust stiftet af den skattepligtige eller dennes nærtstående eller fonde eller truster stiftet af disse. Som nærtstående anses den skattepligtiges ægtefælle, forældre og bedsteforældre samt børn og børnebørn og disses ægtefæller eller dødsboer efter de nævnte personer. Stedbarns- og adoptivforhold sidestilles med oprindeligt slægtskabsforhold. Stk. 3. Ved koncernforbundne juridiske personer forstås juridiske personer, hvor samme kreds af selskabsdeltagere har bestemmende indflydelse, eller hvor der er fælles ledelse. Stk. 4. En juridisk eller fysisk person anses for udenlandsk, hvis personen er hjemmehørende i en fremmed stat, Færøerne eller Grønland, herunder efter bestemmelserne i en dobbeltbeskatningsoverenskomst. Stk. 5. De selvangivelsespligtige skal udfærdige og opbevare skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for de kontrollerede transaktioner, jf. dog stk. 6. Den skriftlige dokumentation skal på told- og skatteforvaltningens begæring forelægges denne og skal være af en sådan art, at den kan danne grundlag for en vurdering af, om priser og vilkår er fastsat i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter. Skriftlig dokumentation i form af databaseundersøgelser skal alene udarbejdes, såfremt told- og skatteforvaltningen anmoder herom, og med en frist på minimum 60 dage. Der skal ikke udarbejdes skriftlig dokumentation for kontrollerede transaktioner, der i omfang og hyppighed er uvæsentlige. Told- og skatteforvaltningen fastsætter regler for indholdet af den skriftlige dokumentation. De fastsatte regler skal godkendes af Skatterådet.

82 Stk. 6. Skattepligtige, der alene eller sammen med koncernforbundne virksomheder, jf. stk. 7, har under 250 beskæftigede og enten har en årlig samlet balance på under 125 mio. kr. eller en årlig omsætning på under 250 mio. kr., skal, idet stk. 5, pkt. finder tilsvarende anvendelse, alene udfærdige og opbevare skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for 1) kontrollerede transaktioner med fysiske og juridiske personer, der er hjemmehørende i en fremmed stat, der ikke har en dobbeltbeskatningsoverenskomst med Danmark, og som samtidig ikke er medlem af EU eller EØS, 2) kontrollerede transaktioner med et fast driftssted, der er beliggende i en fremmed stat, der ikke har en dobbeltbeskatningsoverenskomst med Danmark, og som samtidig ikke er medlem af EU eller EØS, og 3) kontrollerede transaktioner med et fast driftssted, der er beliggende i Danmark, forudsat at den skattepligtige, jf. stk. 1, nr. 5, er hjemmehørende i en fremmed stat, der ikke har en dobbeltbeskatningsoverenskomst med Danmark, og som samtidig ikke er medlem af EU eller EØS. Stk. 7. Ved opgørelsen af størrelsesgrænserne i stk. 6 medregnes juridiske personer, der er koncernforbundne med den skattepligtige, jf. kursgevinstlovens 4, stk. 2. Ved opgørelse af den samlede balance bortses dog fra gæld og fordringer mellem den skattepligtige og koncernforbundne juridiske personer samt kapitalandele i koncernforbundne juridiske personer ejet af den skattepligtige og omvendt. Ved opgørelse af omsætningsgrænsen bortses fra omsætning mellem den skattepligtige og koncernforbundne juridiske personer. Stk. 8. 3) Told- og skatteforvaltningen kan pålægge virksomheder omfattet af stk. 1 eller 6 at indsende en erklæring som nævnt i revisorlovens 1, stk. 2, om dokumentationen som nævnt ovenfor i stk. 5, 2. pkt. Det er en betingelse for erklæringspålægget, at virksomheden har haft kontrollerede transaktioner med fysiske eller juridiske personer i lande uden for EU eller EØS, med hvilke Danmark ikke har indgået en dobbeltbeskatningsoverenskomst, eller at virksomheden ifølge virksomhedens årsrapporter har haft gennemsnitligt driftsmæssigt underskud i 4 på hinanden følgende indkomstår, hvoraf det seneste er det indkomstår, for hvilket erklæringspålægget gives, målt som resultat af primær drift før finansiering, ekstraordinære poster og skat. Dog anvendes for forsikringsvirksomheder forsikringsteknisk resultat som driftsresultatmål. For øvrige finansielle virksomheder anvendes resultat før skat som driftsresultatmål. Det er endvidere en betingelse, at det for kontrollen af virksomhedens skattemæssige forhold er hensigtsmæssigt og relevant for told- og skatteforvaltningen at indhente erklæringen. Fristen for indsendelse af erklæringen er mindst 90 dage regnet fra pålæggets datering. Pålægget kan tidligst gives 7 dage efter modtagelsen af dokumentationen efter stk. 5, 2. pkt. Told- og skatteforvaltningens afgørelse om indhentelse af en revisorerklæring kan ikke påklages til anden administrativ myndighed. Dog kan afgørelsen påklages til Landsskatteretten, hvis told- og skatteforvaltningen henlægger sagen uden at gennemføre en ændring af virksomhedens selvangivne indkomst foretaget på baggrund af den indkaldte dokumentation, eller hvis forvaltningen gennemfører en nedsættelse af den selvangivne indkomst foretaget på baggrund af den indkaldte dokumentation. Klagefristen er i de tilfælde 3 måneder regnet fra forvaltningens underretning til virksomheden om henlæggelsen eller nedsættelsen. Endvidere kan afgørelsen prøves i forbindelse med en klage over en ændring af virksomhedens selvangivne indkomst foretaget på baggrund af den indkaldte dokumentation. Ved klage efter denne bestemmelses 9. og 11. pkt. finder skatteforvaltningslovens tilsvarende anvendelse. Told- og skatteforvaltningen kan fastsætte nærmere regler om erklæringens indhold og afgivelse samt fristen for indsendelse af erklæringen. Stk. 9. Såfremt den skattepligtige ikke har udarbejdet dokumentation efter stk. 5 eller 6 eller indsendt erklæring efter stk. 8, finder 5, stk. 3, anvendelse, for så vidt angår de kontrollerede transaktioner.

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84 SKAT: Kontrollerede transaktioner - bilag til selvangivelsen BORGER VIRKSOMHED LOG PÅ TastSelv Borger Log på med NemID Log på med TastSelv-kode Log på med autorisation Bestil kode TastSelv Erhverv Log på med NemID eller medarbejdersignatur Log på med TastSelv-kode Bestil kode Her står du: Blanketter > 05 Skat; selvangivelsesforløb - selskaber Kontrollerede transaktioner - bilag til selvangivelsen Kontrollerede transaktioner - bilag til selvangivelsen Bilag til selvangivelsen Undertitel Bilag til selvangivelsen Dokument type Blanket Blanketnummer Formål og beskrivelse for blanketten Formål og beskrivelse af blanketten Blanket : Kontrollerede transaktioner er bilag til selvangivelsen og vedrører skattepligtige (såvel fysiske, som juridiske personer), som er omfattet af oplysningspligten om kontrollerede transaktioner i Skattekontrollovens 3 B. Skattepligtige, som har haft kontrollerede transaktioner for mere end 5 mio. kr. med en eller flere udenlandske og/eller danske interesseforbundne parter i indkomståret, skal udfylde og indsende blanket til SKAT sammen med selvangivelsen. Blanketten er en del af TastSelv Erhverv-løsningen, men det er også muligt at indsende data i den udfyldte blanket pr. til SKAT eller ved almindelig postforsendelse Side 1 af 2

85 SKAT: Kontrollerede transaktioner - bilag til selvangivelsen Hvis den skattepligtige vælger at indsende blankettens data pr. , sker det på eget ansvar, da blanketten ikke indeholder nogen form for datasikring. Man kan dog altid selv sikre sine s inden afsendelsen via sit eget postsystems sikkerhedsindstillinger, ved enten at kryptere hele meddelelsen inklusiv den vedhæftede datafil eller ved at sende meddelelsen med digital signatur. For en sikkerheds skyld anbefales det også at udskrive og gemme den udfyldte blanket. Eventuelle spørgsmål bedes rettet til Store Selskaber - Kompetent Myndighed. Pdf-udgave Hent blanket Side 2 af 2

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90 BEK nr 42 af 24/01/2006 Gældende (Transfer pricing-bekendtgørelse) Bekendtgørelse om dokumentation af prisfastsættelsen af kontrollerede transaktioner I medfør af 3 B, stk. 5, 5. pkt. i skattekontrolloven, jf. lovbekendtgørelse nr af 24. november 2005, og efter bemyndigelse samt efter godkendelse af Skatterådet den 24. januar 2006, fastsættes: 1. Omfattede af bekendtgørelsen er de skattepligtige, som ved opgørelsen af den skatte- eller udlodningspligtige indkomst skal anvende priser og vilkår for handelsmæssige eller økonomiske transaktioner med forbundne parter (kontrollerede transaktioner), som er i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter, jf. ligningslovens 2, stk. 1, og som skal udfærdige og opbevare skriftlig dokumentation for, hvorledes priser og vilkår er fastsat for disse kontrollerede transaktioner, jf. skattekontrollovens 3 B, stk. 5. Stk. 2. I skattekontrollovens 3 B, stk. 6, er angivet, at skattepligtige, som falder under visse størrelsesgrænser, kun skal udarbejde dokumentation for visse kontrollerede transaktioner. Andre undtagelser for dokumentationspligten er beskrevet i skattekontrollovens 3 B, stk En dokumentation skal kunne danne grundlag for en vurdering af, om priser og vilkår er fastsat i overensstemmelse med, hvad der kunne være opnået, hvis transaktionerne var afsluttet mellem uafhængige parter og indeholde de beskrivelser og analyser, som er beskrevet i 4-8. Det er ikke en betingelse, at dokumentationen følger strukturen i 4-8. Stk. 2. Omfanget af de i 4-8 nævnte beskrivelser, analyser mv., afhænger af omfanget og kompleksiteten af virksomheden og de kontrollerede transaktioner. Stk. 3. Dokumentationen kan udarbejdes på dansk, norsk, svensk eller engelsk. Stk. 4. Dokumentationen skal på begæring fremsendes til told- og skatteforvaltningen inden 60 dage. 3. For uvæsentlige kontrollerede transaktioner skal alene angives de typer af transaktioner, som den skattepligtige har vurderet som uvæsentlige. Stk. 2. Transaktioner anses for uvæsentlige, når der er tale om enkeltstående transaktioner af et beskedent økonomisk omfang. 4. Dokumentationen skal indeholde en beskrivelse, som giver told- og skatteforvaltningen et overblik over koncernen og de forretningsmæssige aktiviteter. Stk. 2. Beskrivelsen skal indeholde: 1) En beskrivelse af koncernens juridiske struktur, herunder angivelse af koncernenhedernes geografiske placering. 2) En beskrivelse af den organisatoriske struktur, herunder angivelse af den primære forretningsmæssige aktivitet for den skattepligtige og for de forbundne parter, som den skattepligtige har haft kontrollerede transaktioner med. 3) En oversigt der viser de seneste 3 års omsætning og resultat af den primære drift for den skattepligtige og for de forbundne parter, som den skattepligtige har haft kontrollerede transaktioner med. 4) En kort historisk beskrivelse af koncernen og virksomheden, en beskrivelse af eventuelle omstruktureringer og skift i væsentlige funktioner og risici, samt en forklaring på eventuelle underskud. 5) En kort beskrivelse af branchemæssige forhold for koncernen, herunder angivelse af de væsentligste konkurrencemæssige parametre. 5. Dokumentationen skal indeholde en beskrivelse af de kontrollerede transaktioner. Stk. 2. Flere transaktioner kan beskrives under et (aggregeret). Det skal beskrives, hvilke transaktioner som er aggregeret. Stk. 3. De kontrollerede transaktioner skal identificeres med hensyn til, hvor meget der er overdraget og mellem hvilke forbundne parter. Stk. 4. De kontrollerede transaktioner skal endvidere beskrives i forhold til: 1) Produkters (varer, tjenesteydelser, aktiver, immaterielle aktiver mv.) egenskaber. 2) En funktionsanalyse (funktioner, aktiver og risici.) 3) Kontraktsvilkår. 4) Økonomiske omstændigheder. 5) Forretningsstrategier. Stk. 5. Eventuelle omkostningsfordelingsaftaler skal beskrives. Stk. 6. Eventuelle andre forhold, som konkret vurderes af betydning for en armslængdevurdering, skal beskrives.

91 6. Dokumentationen skal indeholde en sammenlignelighedsanalyse, som sammen med beskrivelserne i 4-5 kan danne grundlag for en vurdering af, om principperne for prisfastsættelse af de kontrollerede transaktioner er i overensstemmelse med armslængdeprincippet, jf. stk Stk. 2. Analysen skal indeholde en beskrivelse af prisfastsættelsen af de kontrollerede transaktioner. Analysen skal endvidere indeholde en redegørelse for, hvorfor prisfastsættelsen vurderes at være i overensstemmelse med armslængdeprincippet, herunder en redegørelse for anvendte sammenlignelige uafhængige transaktioner og begrundelse for valg af metode. Stk. 3. Ved anvendelsen af stk. 2 skal anvendes den skattepligtiges egne transaktioner med uafhængige parter, samt transaktioner mellem uafhængige parter og herunder andre forbundne parters transaktioner med uafhængige parter. Endvidere skal angives hvilke mulige sammenlignelige uafhængige transaktioner, som virksomheden har fravalgt, samt begrundelse for fravalget. Stk. 4. Den skattepligtige er ikke forpligtet til at udarbejde databaseundersøgelser, jf. dog 10. Hvis databaseundersøgelser alligevel er udarbejdet, skal disse vedlægges dokumentationen. 7. Dokumentationen skal indeholde en overordnet redegørelse for implementeringen af principperne for prisfastsættelsen. Stk. 2. Redegørelsen skal endvidere specificere, i hvilket omfang den skattepligtige eller forbundne parter har foretaget efterfølgende justeringer af priser og vilkår for de kontrollerede transaktioner i Danmark eller i udlandet. Specifikationen skal indeholde oplysninger om, i hvilket omfang disse efterfølgende reguleringer er i overensstemmelse med armslængdeprincippet. 8. Dokumentationen skal indeholde en liste over eventuelle skriftlige aftaler vedrørende de kontrollerede transaktioner. Stk. 2. Dokumentationen skal endvidere indeholde kopi af eventuelle skriftlige aftaler, som den skattepligtige eller forbundne parter har indgået med myndigheder i andre lande vedrørende kontrollerede transaktioner. Dette gælder både aftaler med bagudrettet og fremadrettet virkning. 1. og 2. pkt. finder ikke anvendelse for skriftlige aftaler som de danske skattemyndigheder er part i. 9. Told- og skatteforvaltningen kan i løbet af en skattekontrol anmode om supplerende oplysninger og materiale, herunder at der udarbejdes supplerende materiale. Der kan anmodes om oplysninger og materiale, som må anses som relevant for en armslængdevurdering, herunder oplysninger og materiale til uddybning og kontrol af de i 4-8 og 10 nævnte beskrivelser, analyser mv. 2, stk. 3, finder tilsvarende anvendelse. 10. Told- og skatteforvaltningen kan anmode den skattepligtige om at udarbejde databaseundersøgelse for en eller flere kontrollerede transaktioner. En anmodning om udarbejdelse af databaseundersøgelse kan alene fremsættes under en skattekontrol. Stk. 2. Ved en databaseundersøgelse forstås en søgning efter sammenligningsgrundlag, som kan anvendes til brug for prisfastsættelse samt vurdering af, om prisfastsættelse af kontrollerede transaktioner sker på armslængdevilkår. Søgningen sker i offentligt tilgængelige databaser, herunder eventuelt mod betaling. Stk. 3. Databaseundersøgelsen skal indeholde: 1) Identifikation af transaktion(er) der testes og anvendt prisfastsættelsesmetode. 2) Beskrivelse af udsøgningsprocessen, herunder begrundelse for kvantitative og kvalitative udsøgningskriterier. 3) Forklaring for brug af justeringer og interval. 4) Dokumentationsmateriale fra database og anvendte data i øvrigt. Stk. 4. Told- og skatteforvaltningen skal give den skattepligtige en frist på mellem 60 og 90 dage til at udarbejde databaseundersøgelsen. 11. Den skattepligtige kan vælge at udarbejde dokumentationen som en EU transfer pricing-dokumentation. De i 4-8 nævnte beskrivelser og analyser skal være indeholdt i enten fællesdokumentationen eller den landespecifikke dokumentation. 2-3 og 9-10 finder tilsvarende anvendelse. Stk. 2. Den skattepligtige kan vælge at udarbejde dokumentationen efter fælles retningslinjer om udarbejdelse af transfer pricingdokumentation, som er indgået mellem stater, som ikke er medlem af den Europæiske Union. Det bekendtgøres, hvilke fælles retningslinjer, jf. 1. pkt., der kan finde anvendelse. 12. Bekendtgørelsen træder i kraft den 4. februar 2006 og har virkning for kontrollerede transaktioner foretaget i indkomstår, der påbegyndes den 1. januar 2006 eller senere. Skattekontrollovens 17, stk. 3, anvendes først for kontrollerede transaktioner foretaget i indkomstår der påbegyndes den 2. april 2006 eller senere. Stk , stk. 1, om adgangen til at udarbejde dokumentation som en EU transfer pricing-dokumentation, får virkning fra tidspunktet for godkendelsen i EU s Ministerråd. SKAT, den 24. januar 2006 Ole Kjær

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93 Skattekontrolloven Med bøde straffes den, der undlader at opfylde pligten til at opbevare materiale efter de regler, som skatteministeren har fastsat efter 3, stk. 3, samt efter 6 A, stk. 1, 1. pkt. Stk. 2. Med bøde straffes den, der forsætligt eller groft uagtsomt undlader at efterkomme skatteministerens bestemmelser efter 3 C, stk. 2, 2. pkt. Stk. 3. Med bøde straffes den, der forsætligt eller af grov uagtsomhed undlader rettidigt at indsende den skriftlige dokumentation, som der er pligt til at udarbejde efter 3 B, stk. 5 og 6, eller indhente revisorerklæring efter 3 B, stk. 8. Stk. 4. Ved udmåling af bødestraf i henhold til stk. 1-3 skal der tages hensyn til den økonomiske fordel af overtrædelsen. Det skal anses for en skærpende omstændighed, at overtrædelsen er begået som led i en systematisk overtrædelse af skattelovgivningen.

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97 Action Plan on Base Erosion and Profit Shifting

98 This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Please cite this publication as: OECD (2013), Action Plan on Base Erosion and Profit Shifting, OECD Publishing. ISBN (print) ISBN (PDF) Photo credits: Cover istockphoto.com/apsimo1, istockphoto.com/silvrshootr, Oleksiy Mark / Shuttestock.com. Corrigenda to OECD publications may be found on line at: OECD 2013 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of the source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d'exploitation du droit de copie (CFC) at [email protected].

99 TABLE OF CONTENTS 3 Table of contents Acronyms and abbreviations 5 Chapter 1. Introduction 7 Chapter 2. Background 9 Chapter 3. Action Plan 13 A. Actions 14 (i) Establishing international coherence of corporate income taxation 15 (ii) Restoring the full effects and benefits of international standards 18 (iii) Ensuring transparency while promoting increased certainty and predictability 21 (iv) From agreed policies to tax rules: the need for a swift implementation of the measures 23 B. Timing 24 C. Methodology 25 (i) An inclusive and effective process: launching the OECD/G20 BEPS Project and involving developing countries 25 (ii) Efficient process 26 (iii) Consulting with business and civil society 26 References 27 Annex A. Overview of the actions and timelines 29 Tables Table A.1 Summary of the BEPS Action Plan by action 29 Table A.2 Summary of the BEPS Action Plan by timeline 35 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

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101 ACRONYMS AND ABBREVIATIONS 5 Acronyms and abbreviations BEPS Base erosion and profit shifting BIAC Business and Industry Advisory Committee to the OECD CFA Committee on Fiscal Affairs CFC Controlled foreign company FDI Foreign direct investment FHTP Forum on Harmful Tax Practices GDP Gross domestic product MAP Mutual agreement procedure MNE Multinational enterprise OECD Organisation for Economic Co-operation and Development PE Permanent establishment TFTD Task Force on Tax and Development TUAC Trade Union Advisory Committee to the OECD UN United Nations VAT Value added tax VAT/GST Value added tax/goods and services tax ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

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103 1. INTRODUCTION 7 Chapter 1 Introduction Globalisation has benefited our domestic economies. Globalisation is not new, but the pace of integration of national economies and markets has increased substantially in recent years. The free movement of capital and labour, the shift of manufacturing bases from high-cost to low-cost locations, the gradual removal of trade barriers, technological and telecommunication developments, and the ever-increasing importance of managing risks and of developing, protecting and exploiting intellectual property, have had an important impact on the way cross-border activities take place. Globalisation has boosted trade and increased foreign direct investments in many countries. Hence it supports growth, creates jobs, fosters innovation, and has lifted millions out of poverty. Globalisation impacts countries corporate income tax regimes. As long ago as the 1920s, the League of Nations recognised that the interaction of domestic tax systems can lead to double taxation with adverse effects on growth and global prosperity. Countries around the world agree on the need to eliminate double taxation and the need to achieve this on the basis of agreed international rules that are clear and predictable, giving certainty to both governments and businesses. International tax law is therefore a key pillar in supporting the growth of the global economy. As the economy became more globally integrated, so did corporations. Multi-national enterprises (MNE) now represent a large proportion of global GDP. Also, intra-firm trade represents a growing proportion of overall trade. Globalisation has resulted in a shift from country-specific operating models to global models based on matrix management organisations and integrated supply chains that centralise several functions at a regional or global level. Moreover, the growing importance of the service component of the economy, and of digital products that often can be delivered over the Internet, has made it much easier for businesses to locate many productive activities in geographic locations that are distant from the physical location of their customers. These developments have been exacerbated by the increasing ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

104 8 1. INTRODUCTION sophistication of tax planners in identifying and exploiting the legal arbitrage opportunities and the boundaries of acceptable tax planning, thus providing MNEs with more confidence in taking aggressive tax positions. These developments have opened up opportunities for MNEs to greatly minimise their tax burden. This has led to a tense situation in which citizens have become more sensitive to tax fairness issues. It has become a critical issue for all parties: Governments are harmed. Many governments have to cope with less revenue and a higher cost to ensure compliance. Moreover, Base Erosion and Profit Shifting (BEPS) undermines the integrity of the tax system, as the public, the media and some taxpayers deem reported low corporate taxes to be unfair. In developing countries, the lack of tax revenue leads to critical under-funding of public investment that could help promote economic growth. Overall resource allocation, affected by tax-motivated behaviour, is not optimal. Individual taxpayers are harmed. When tax rules permit businesses to reduce their tax burden by shifting their income away from jurisdictions where income producing activities are conducted, other taxpayers in that jurisdiction bear a greater share of the burden. Businesses are harmed. MNEs may face significant reputational risk if their effective tax rate is viewed as being too low. At the same time, different businesses may assess such risk differently, and failing to take advantage of legal opportunities to reduce an enterprise s tax burden can put it at a competitive disadvantage. Similarly, corporations that operate only in domestic markets, including family-owned businesses or new innovative companies, have difficulty competing with MNEs that have the ability to shift their profits across borders to avoid or reduce tax. Fair competition is harmed by the distortions induced by BEPS. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

105 2. BACKGROUND 9 Chapter 2 Background Taxation is at the core of countries sovereignty, but the interaction of domestic tax rules in some cases leads to gaps and frictions. When designing their domestic tax rules, sovereign states may not sufficiently take into account the effect of other countries rules. The interaction of independent sets of rules enforced by sovereign countries creates frictions, including potential double taxation for corporations operating in several countries. It also creates gaps, in cases where corporate income is not taxed at all, either by the country of source or the country of residence, or is only taxed at nominal rates. In the domestic context, coherence is usually achieved through a principle of matching a payment that is deductible by the payer is generally taxable in the hands of the recipient, unless explicitly exempted. There is no similar principle of coherence at the international level, which leaves plenty of room for arbitrage by taxpayers, though sovereign states have co-operated to ensure coherence in a narrow field, namely to prevent double taxation. The international standards have sought to address these frictions in a way that respects tax sovereignty, but gaps remain. Since at least the 1920s, it has been recognised that the interaction of domestic tax systems can lead to overlaps in the exercise of taxing rights that in turn can result in double taxation. Countries have long worked and are strongly committed to eliminate such double taxation in order to minimise trade distortions and impediments to sustainable economic growth, while affirming their sovereign right to establish their own tax rules. There are gaps and frictions among different countries tax systems that were not taken in account in designing the existing standards and which are not dealt with by bilateral tax treaties. The global economy requires countries to collaborate on tax matters in order to be able to protect their tax sovereignty. In many circumstances, the existing domestic law and treaty rules governing the taxation of cross-border profits produce the correct results and do not give rise to BEPS. International co-operation has resulted in ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

106 10 2. BACKGROUND shared principles and a network of thousands of bilateral tax treaties that are based on common standards and that therefore generally result in the prevention of double taxation on profits from cross-border activities. Clarity and predictability are fundamental building blocks of economic growth. It is important to retain such clarity and predictability by building on this experience. At the same time, instances where the current rules give rise to results that generate concerns from a policy perspective should be tackled. Over time, the current rules have also revealed weaknesses that create opportunities for BEPS. BEPS relates chiefly to instances where the interaction of different tax rules leads to double non-taxation or less than single taxation. It also relates to arrangements that achieve no or low taxation by shifting profits away from the jurisdictions where the activities creating those profits take place. No or low taxation is not per se a cause of concern, but it becomes so when it is associated with practices that artificially segregate taxable income from the activities that generate it. In other words, what creates tax policy concerns is that, due to gaps in the interaction of different tax systems, and in some cases because of the application of bilateral tax treaties, income from cross-border activities may go untaxed anywhere, or be only unduly lowly taxed. The spread of the digital economy also poses challenges for international taxation. The digital economy is characterised by an unparalleled reliance on intangible assets, the massive use of data (notably personal data), the widespread adoption of multi-sided business models capturing value from externalities generated by free products, and the difficulty of determining the jurisdiction in which value creation occurs. This raises fundamental questions as to how enterprises in the digital economy add value and make their profits, and how the digital economy relates to the concepts of source and residence or the characterisation of income for tax purposes. At the same time, the fact that new ways of doing business may result in a relocation of core business functions and, consequently, a different distribution of taxing rights which may lead to low taxation is not per se an indicator of defects in the existing system. It is important to examine closely how enterprises of the digital economy add value and make their profits in order to determine whether and to what extent it may be necessary to adapt the current rules in order to take into account the specific features of that industry and to prevent BEPS. These weaknesses put the existing consensus-based framework at risk, and a bold move by policy makers is necessary to prevent worsening problems. Inaction in this area would likely result in some governments losing corporate tax revenue, the emergence of competing sets of international standards, and the replacement of the current consensus-based framework by unilateral measures, which could lead to global tax chaos marked by the ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

107 2. BACKGROUND 11 massive re-emergence of double taxation. In fact, if the Action Plan fails to develop effective solutions in a timely manner, some countries may be persuaded to take unilateral action for protecting their tax base, resulting in avoidable uncertainty and unrelieved double taxation. It is therefore critical that governments achieve consensus on actions that would deal with the above weaknesses. As the G20 Leaders pointed out, Despite the challenges we all face domestically, we have agreed that multilateralism is of even greater importance in the current climate, and remains our best asset to resolve the global economy s difficulties (G20, 2012). In the changing international tax environment, a number of countries have expressed a concern about how international standards on which bilateral tax treaties are based allocate taxing rights between source and residence States. This Action Plan is focused on addressing BEPS. While actions to address BEPS will restore both source and residence taxation in a number of cases where cross-border income would otherwise go untaxed or would be taxed at very low rates, these actions are not directly aimed at changing the existing international standards on the allocation of taxing rights on cross-border income. The G20 finance ministers called on the OECD to develop an action plan to address BEPS issues in a co-ordinated and comprehensive manner. Specifically, this Action Plan should provide countries with domestic and international instruments that will better align rights to tax with economic activity. As called for in the recent OECD report on BEPS, Addressing Base Erosion and Profit Shifting (OECD, 2013a), this Action Plan (i) identifies actions needed to address BEPS, (ii) sets deadlines to implement these actions and (iii) identifies the resources needed and the methodology to implement these actions. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

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109 3. ACTION PLAN 13 Chapter 3 Action Plan Fundamental changes are needed to effectively prevent double non-taxation, as well as cases of no or low taxation associated with practices that artificially segregate taxable income from the activities that generate it. A number of actions can be undertaken in order to address the weaknesses in the current rules in an effective and efficient manner. This Action Plan calls for fundamental changes to the current mechanisms and the adoption of new consensus-based approaches, including anti-abuse provisions, designed to prevent and counter base erosion and profit shifting: New international standards must be designed to ensure the coherence of corporate income taxation at the international level. BEPS issues may arise directly from the existence of loopholes, as well as gaps, frictions or mismatches in the interaction of countries domestic tax laws. These types of issues generally have not been dealt with by OECD standards or bilateral treaty provisions. There is a need to complement existing standards that are designed to prevent double taxation with instruments that prevent double non-taxation in areas previously not covered by international standards and that address cases of no or low taxation associated with practices that artificially segregate taxable income from the activities that generate it. Moreover, governments must continue to work together to tackle harmful tax practices and aggressive tax planning. A realignment of taxation and relevant substance is needed to restore the intended effects and benefits of international standards, which may not have kept pace with changing business models and technological developments: Whilst bilateral tax treaties have been effective in preventing double taxation, there is a concern that they often fail to prevent double nontaxation that results from interactions among more than two countries. In particular, the involvement of third countries in the bilateral framework established by treaty partners puts a strain on the existing rules, in particular when done via shell companies that have little or no substance in terms of office space, tangible assets and employees. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

110 14 3. ACTION PLAN In the area of transfer pricing, the rules should be improved in order to put more emphasis on value creation in highly integrated groups, tackling the use of intangibles, risks, capital and other high-risk transactions to shift profits. At the same time, there is consensus among governments that moving to a system of formulary apportionment of profits is not a viable way forward; it is also unclear that the behavioural changes companies might adopt in response to the use of a formula would lead to investment decisions that are more efficient and tax-neutral than under a separate entity approach. The actions implemented to counter BEPS cannot succeed without further transparency, nor without certainty and predictability for business. The availability of timely, targeted and comprehensive information is essential to enable governments to quickly identify risk areas. While audits remain a key source of relevant information, they suffer from a number of constraints and from a lack of relevant tools for the early detection of aggressive tax planning. As a result, timely, comprehensive and relevant information on tax planning strategies is often unavailable to tax administrations, and new mechanisms to obtain that information must be developed. At the same time, mechanisms should be implemented to provide businesses with the certainty and predictability they need to make investment decisions. A. Actions BEPS is a concern in the context of the digital economy. The actions will help address these concerns. However, there are specificities that need to be taken into consideration. This will require a thorough analysis of the different business models, the ever-changing business landscape and a better understanding of the generation of value in this sector. Moreover, indirect tax aspects should also be considered. Drawing on the other actions included in this plan, a dedicated task force on the digital economy will be established. ACTION 1 Address the tax challenges of the digital economy Identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation. Issues to be examined include, but are not limited to, the ability of a company to have a significant digital presence in the economy of another country without being liable to taxation due to the lack of nexus under current international rules, the attribution of value created from the generation of marketable location-relevant data through the use of digital ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

111 3. ACTION PLAN 15 products and services, the characterisation of income derived from new business models, the application of related source rules, and how to ensure the effective collection of VAT/GST with respect to the cross-border supply of digital goods and services. Such work will require a thorough analysis of the various business models in this sector. (i) Establishing international coherence of corporate income taxation Globalisation means that domestic policies, including tax policy, cannot be designed in isolation. Tax policy is at the core of countries sovereignty, and each country has the right to design its tax system in the way it considers most appropriate. At the same time, the increasing interconnectedness of domestic economies has highlighted the gaps that can be created by interactions between domestic tax laws. Therefore, there is a need to complement rules to prevent double taxation with a fundamentally new set of standards designed to establish international coherence in corporate income taxation. Four main issues have been identified: The BEPS report (OECD, 2013a) calls for the development of instruments to put an end to or neutralise the effects of hybrid mismatch arrangements and arbitrage. Hybrid mismatch arrangements can be used to achieve unintended double non-taxation or long-term tax deferral by, for instance, creating two deductions for one borrowing, generating deductions without corresponding income inclusions, or misusing foreign tax credit and participation exemption regimes. Country rules that allow taxpayers to choose the tax treatment of certain domestic and foreign entities could facilitate hybrid mismatches. While it may be difficult to determine which country has in fact lost tax revenue, because the laws of each country involved have been followed, there is a reduction of the overall tax paid by all parties involved as a whole, which harms competition, economic efficiency, transparency and fairness. ACTION 2 Neutralise the effects of hybrid mismatch arrangements Develop model treaty provisions and recommendations regarding the design of domestic rules to neutralise the effect (e.g. double non-taxation, double deduction, long-term deferral) of hybrid instruments and entities. This may include: (i) changes to the OECD Model Tax Convention to ensure that hybrid instruments and entities (as well as dual resident entities) are not used to obtain the benefits of treaties unduly; (ii) domestic law provisions that prevent exemption or non-recognition for payments that are deductible by the payor; (iii) domestic law provisions that deny a deduction for a payment ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

112 16 3. ACTION PLAN that is not includible in income by the recipient (and is not subject to taxation under controlled foreign company (CFC) or similar rules); (iv) domestic law provisions that deny a deduction for a payment that is also deductible in another jurisdiction; and (v) where necessary, guidance on co ordination or tie-breaker rules if more than one country seeks to apply such rules to a transaction or structure. Special attention should be given to the interaction between possible changes to domestic law and the provisions of the OECD Model Tax Convention. This work will be co ordinated with the work on interest expense deduction limitations, the work on CFC rules, and the work on treaty shopping. One area in which the OECD has not done significant work in the past is CFC rules. One of the sources of BEPS concerns is the possibility of creating affiliated non-resident taxpayers and routing income of a resident enterprise through the non-resident affiliate. CFC and other antideferral rules have been introduced in many countries to address this issue. However, the CFC rules of many countries do not always counter BEPS in a comprehensive manner. While CFC rules in principle lead to inclusions in the residence country of the ultimate parent, they also have positive spillover effects in source countries because taxpayers have no (or much less of an) incentive to shift profits into a third, low-tax jurisdiction. ACTION 3 Strengthen CFC rules Develop recommendations regarding the design of controlled foreign company rules. This work will be co ordinated with other work as necessary. Another issue raising BEPS concerns is excessive deductible payments such as interest and other financial payments. The deductibility of interest expense can give rise to double non-taxation in both the inbound and outbound investment scenarios. From an inbound perspective, the concern regarding interest expense deduction is primarily with lending from a related entity that benefits from a low-tax regime, to create excessive interest deductions for the issuer without a corresponding interest income inclusion by the holder. The result is that the interest payments are deducted against the taxable profits of the operating companies while the interest income is taxed favourably or not at all at the level of the recipient, and sometimes the group as a whole may have little or no external debt. From an outbound perspective, a company may use debt to finance the production of exempt or deferred income, thereby claiming a current deduction for interest expense while deferring or exempting the related income. Rules regarding the deductibility ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

113 3. ACTION PLAN 17 of interest expense therefore should take into account that the related interest income may not be fully taxed or that the underlying debt may be used to inappropriately reduce the earnings base of the issuer or finance deferred or exempt income. Related concerns are raised by deductible payments for other financial transactions, such as financial and performance guarantees, derivatives, and captive and other insurance arrangements, particularly in the context of transfer pricing. ACTION 4 Limit base erosion via interest deductions and other financial payments Develop recommendations regarding best practices in the design of rules to prevent base erosion through the use of interest expense, for example through the use of related-party and third-party debt to achieve excessive interest deductions or to finance the production of exempt or deferred income, and other financial payments that are economically equivalent to interest payments. The work will evaluate the effectiveness of different types of limitations. In connection with and in support of the foregoing work, transfer pricing guidance will also be developed regarding the pricing of related party financial transactions, including financial and performance guarantees, derivatives (including internal derivatives used in intra-bank dealings), and captive and other insurance arrangements. The work will be co-ordinated with the work on hybrids and CFC rules. Preferential regimes continue to be a key pressure area. In 1998, the OECD issued a report (OECD, 1998) on harmful tax practices in part based on the recognition that a race to the bottom would ultimately drive applicable tax rates on certain mobile sources of income to zero for all countries, whether or not this was the tax policy a country wished to pursue. Agreeing to a set of common rules may in fact help countries to make their sovereign tax policy choices. The underlying policy concerns expressed in the 1998 Report as regards the race to the bottom on the mobile income tax base are as relevant today as they were 15 years ago. However, the race to the bottom nowadays often takes less the form of traditional ringfencing and more the form of across the board corporate tax rate reductions on particular types of income (such as income from financial activities or from the provision of intangibles). The BEPS report (OECD, 2013a) calls for proposals to develop solutions to counter harmful regimes more effectively, taking into account factors such as transparency and substance. In furtherance of this goal, the work of the Forum on Harmful Tax Practices (FHTP) will be refocused to develop more effective solutions. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

114 18 3. ACTION PLAN ACTION 5 Counter harmful tax practices more effectively, taking into account transparency and substance Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It will take a holistic approach to evaluate preferential tax regimes in the BEPS context. It will engage with non-oecd members on the basis of the existing framework and consider revisions or additions to the existing framework. (ii) Restoring the full effects and benefits of international standards Current rules work well in many cases, but they need to be adapted to prevent BEPS that results from the interactions among more than two countries and to fully account for global value chains. The interposition of third countries in the bilateral framework established by treaty partners has led to the development of schemes such as low-taxed branches of a foreign company, conduit companies, and the artificial shifting of income through transfer pricing arrangements. FDI figures show the magnitude of the use of certain regimes to channel investments and intra-group financing from one country to another through conduit structures. In order to preserve the intended effects of bilateral relationships, the rules must be modified to address the use of multiple layers of legal entities inserted between the residence country and the source country. Existing domestic and international tax rules should be modified in order to more closely align the allocation of income with the economic activity that generates that income: Treaty abuse is one of the most important sources of BEPS concerns. The Commentary on Article 1 of the OECD Model Tax Convention already includes a number of examples of provisions that could be used to address treaty-shopping situations as well as other cases of treaty abuse, which may give rise to double non-taxation. Tight treaty anti-abuse clauses coupled with the exercise of taxing rights under domestic laws will contribute to restore source taxation in a number of cases. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

115 3. ACTION PLAN 19 ACTION 6 Prevent treaty abuse Develop model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances. Work will also be done to clarify that tax treaties are not intended to be used to generate double non-taxation and to identify the tax policy considerations that, in general, countries should consider before deciding to enter into a tax treaty with another country. The work will be co ordinated with the work on hybrids. The definition of permanent establishment (PE) must be updated to prevent abuses. In many countries, the interpretation of the treaty rules on agency-pe allows contracts for the sale of goods belonging to a foreign enterprise to be negotiated and concluded in a country by the sales force of a local subsidiary of that foreign enterprise without the profits from these sales being taxable to the same extent as they would be if the sales were made by a distributor. In many cases, this has led enterprises to replace arrangements under which the local subsidiary traditionally acted as a distributor by commissionnaire arrangements with a resulting shift of profits out of the country where the sales take place without a substantive change in the functions performed in that country. Similarly, MNEs may artificially fragment their operations among multiple group entities to qualify for the exceptions to PE status for preparatory and ancillary activities. ACTION 7 Prevent the artificial avoidance of PE status Develop changes to the definition of PE to prevent the artificial avoidance of PE status in relation to BEPS, including through the use of commissionaire arrangements and the specific activity exemptions. Work on these issues will also address related profit attribution issues. A major issue is transfer pricing and the enforcement of the arm s length principle. Transfer pricing rules serve to allocate income earned by a multinational enterprise among those countries in which the company does business. In many instances, the existing transfer pricing rules, based on the arm s length principle, effectively and efficiently allocate the income of multinationals among taxing jurisdictions. In other instances, however, multinationals have been able to use and/or misapply those rules to separate income from the economic activities that produce that income and to shift it into low-tax environments. This most often results from transfers of intangibles and other mobile assets for less than full value, the ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

116 20 3. ACTION PLAN over-capitalisation of lowly taxed group companies and from contractual allocations of risk to low-tax environments in transactions that would be unlikely to occur between unrelated parties. Alternative income allocation systems, including formula based systems, are sometimes suggested. However, the importance of concerted action and the practical difficulties associated with agreeing to and implementing the details of a new system consistently across all countries mean that, rather than seeking to replace the current transfer pricing system, the best course is to directly address the flaws in the current system, in particular with respect to returns related to intangible assets, risk and over-capitalisation. Nevertheless, special measures, either within or beyond the arm s length principle, may be required with respect to intangible assets, risk and over-capitalisation to address these flaws. ACTIONS 8, 9, 10 Assure that transfer pricing outcomes are in line with value creation Action 8 Intangibles Develop rules to prevent BEPS by moving intangibles among group members. This will involve: (i) adopting a broad and clearly delineated definition of intangibles; (ii) ensuring that profits associated with the transfer and use of intangibles are appropriately allocated in accordance with (rather than divorced from) value creation; (iii) developing transfer pricing rules or special measures for transfers of hard-to-value intangibles; and (iv) updating the guidance on cost contribution arrangements. Action 9 Risks and capital Develop rules to prevent BEPS by transferring risks among, or allocating excessive capital to, group members. This will involve adopting transfer pricing rules or special measures to ensure that inappropriate returns will not accrue to an entity solely because it has contractually assumed risks or has provided capital. The rules to be developed will also require alignment of returns with value creation. This work will be co-ordinated with the work on interest expense deductions and other financial payments. Action 10 Other high-risk transactions Develop rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties. This will involve adopting transfer pricing rules or special measures to: (i) clarify the circumstances ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

117 3. ACTION PLAN 21 in which transactions can be recharacterised; (ii) clarify the application of transfer pricing methods, in particular profit splits, in the context of global value chains; and (iii) provide protection against common types of base eroding payments, such as management fees and head office expenses. (iii) Ensuring transparency while promoting increased certainty and predictability Preventing BEPS implies transparency at different levels. Progress on transparency has been made by the Global Forum on Transparency and Exchange of Information for Tax Purposes, but the need for a more holistic approach has been revealed when it comes to preventing BEPS, which implies more transparency on different fronts. Data collection on BEPS should be improved. Taxpayers should disclose more targeted information about their tax planning strategies, and transfer pricing documentation requirements should be less burdensome and more targeted. Improving the availability and analysis of data on BEPS is critical, including to monitor the implementation of the Action Plan. The BEPS report (OECD, 2013a) notes that there are several studies and data indicating that there is an increased disconnect between the location where value creating activities and investment take place and the location where profits are reported for tax purposes. The report noted that further work needs to be done to evaluate such studies, to develop measures of the scale and effects of BEPS behaviours, and to monitor the impact of measures taken under the Action Plan to address BEPS. This should include outcome-based techniques, which look at measures of the allocation of income across jurisdictions relative to measures of value creating activities, as well as techniques that can be used to monitor the specific issues identified in the Action Plan. Accordingly, it is important to identify the types of data that taxpayers should provide to tax administrators, as well as the methodologies that can be used to analyse these data and to assess the likely economic implications of BEPS behaviours and actions taken to address BEPS. ACTION 11 Establish methodologies to collect and analyse data on BEPS and the actions to address it Develop recommendations regarding indicators of the scale and economic impact of BEPS and ensure that tools are available to monitor and evaluate the effectiveness and economic impact of the actions taken to address BEPS on an ongoing basis. This will involve developing an economic analysis of the scale and impact of BEPS (including spillover effects across countries) and actions ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

118 22 3. ACTION PLAN to address it. The work will also involve assessing a range of existing data sources, identifying new types of data that should be collected, and developing methodologies based on both aggregate (e.g. FDI and balance of payments data) and micro-level data (e.g. from financial statements and tax returns), taking into consideration the need to respect taxpayer confidentiality and the administrative costs for tax administrations and businesses. Transparency on certain tax planning/transactions is also needed. Comprehensive and relevant information on tax planning strategies is often unavailable to tax administrations. Yet the availability of timely, targeted and comprehensive information is essential to enable governments to quickly identify risk areas. While audits remain a key source of relevant information, they suffer from a number of constraints as tools for the early detection of aggressive tax planning techniques. Measures designed to improve information flow about tax risks to tax administrations and tax policy makers ( disclosure initiatives ) may be useful in this regard. Other potentially useful measures include co-operative compliance programmes between taxpayers and tax administrations (see OECD, 2013b). ACTION 12 Require taxpayers to disclose their aggressive tax planning arrangements Develop recommendations regarding the design of mandatory disclosure rules for aggressive or abusive transactions, arrangements, or structures, taking into consideration the administrative costs for tax administrations and businesses and drawing on experiences of the increasing number of countries that have such rules. The work will use a modular design allowing for maximum consistency but allowing for country specific needs and risks. One focus will be international tax schemes, where the work will explore using a wide definition of tax benefit in order to capture such transactions. The work will be co-ordinated with the work on co-operative compliance. It will also involve designing and putting in place enhanced models of information sharing for international tax schemes between tax administrations. Transparency also relates to transfer pricing and value-chain analyses. A key issue in the administration of transfer pricing rules is the asymmetry of information between taxpayers and tax administrations. This potentially undermines the administration of the arm s length principle and enhances opportunities for BEPS. In many countries, tax administrations have little capability of developing a big picture view of a taxpayer s global value chain. In addition, divergences between approaches to transfer pricing documentation ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

119 3. ACTION PLAN 23 requirements leads to significant administrative costs for businesses. In this respect, it is important that adequate information about the relevant functions performed by other members of the MNE group in respect of intra-group services and other transactions is made available to the tax administration. ACTION 13 Re-examine transfer pricing documentation Develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries according to a common template. The actions to counter BEPS must be complemented with actions that ensure certainty and predictability for business. Work to improve the effectiveness of the mutual agreement procedure (MAP) will be an important complement to the work on BEPS issues. The interpretation and application of novel rules resulting from the work described above could introduce elements of uncertainty that should be minimised as much as possible. Work will therefore be undertaken in order to examine and address obstacles that prevent countries from solving treaty-related disputes under the MAP. Consideration will also be given to supplementing the existing MAP provisions in tax treaties with a mandatory and binding arbitration provision. ACTION 14 Make dispute resolution mechanisms more effective Develop solutions to address obstacles that prevent countries from solving treaty-related disputes under MAP, including the absence of arbitration provisions in most treaties and the fact that access to MAP and arbitration may be denied in certain cases. (iv) From agreed policies to tax rules: the need for a swift implementation of the measures There is a need to consider innovative ways to implement the measures resulting from the work on the BEPS Action Plan. The delivery of the actions included in the Action Plan on BEPS will result in a number of outputs. Some actions will likely result in recommendations regarding domestic law ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

120 24 3. ACTION PLAN provisions, as well as in changes to the Commentary to the OECD Model Tax Convention and the Transfer Pricing Guidelines. Other actions will likely result in changes to the OECD Model Tax Convention. This is for example the case for the introduction of an anti-treaty abuse provision, changes to the definition of permanent establishment, changes to transfer pricing provisions and the introduction of treaty provisions in relation to hybrid mismatch arrangements. Changes to the OECD Model Tax Convention are not directly effective without amendments to bilateral tax treaties. If undertaken on a purely treaty-by-treaty basis, the sheer number of treaties in effect may make such a process very lengthy, the more so where countries embark on comprehensive renegotiations of their bilateral tax treaties. A multilateral instrument to amend bilateral treaties is a promising way forward in this respect. ACTION 15 Develop a multilateral instrument Analyse the tax and public international law issues related to the development of a multilateral instrument to enable jurisdictions that wish to do so to implement measures developed in the course of the work on BEPS and amend bilateral tax treaties. On the basis of this analysis, interested Parties will develop a multilateral instrument designed to provide an innovative approach to international tax matters, reflecting the rapidly evolving nature of the global economy and the need to adapt quickly to this evolution. B. Timing Addressing BEPS is critical for most countries and must be done in a timely manner, not least to prevent the existing consensus-based framework from unravelling. The pace of the project must be rapid so that concrete actions can be delivered quickly. At the same time, governments also need time to complete the necessary technical work and achieve widespread consensus. Against this background, it is expected that the Action Plan will largely be completed in a two-year period, recognising that some actions will be addressed faster as work has already been advanced, while others might require longer-term work: Amongst the actions more likely to be delivered in months are those in the areas of hybrid mismatch arrangements, treaty abuse, the transfer pricing aspects of intangibles, documentation requirements for transfer pricing purposes, a report identifying the issues raised by the digital economy and possible actions to address them, as well as part of the work on harmful tax practices. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

121 3. ACTION PLAN 25 Actions to be delivered in two years relate to CFC rules, interest deductibility, preventing the artificial avoidance of PE status, the transfer pricing aspects of intangibles, risks, capital and highrisk transactions, part of the work on harmful tax practices, data collection, mandatory disclosure rules, and dispute resolution. Actions that may require more than two years include the transfer pricing aspects of financial transactions, part of the work on harmful tax practices and the development of a multilateral instrument to swiftly implement changes to bilateral treaties. Although these actions are considered as key items of the Action Plan, it is recognised that this work will have to be developed in different stages, starting with a thorough analysis of the issues. Annex A contains tables summarising the different actions and indicating the expected timeline for completing them. C. Methodology The BEPS project marks a turning point in the history of international co-operation on taxation. As the current consensus-based framework is at risk, it is critical that a proper methodology be adopted to make sure that the work is inclusive and effective, takes into account the perspective of developing countries and benefits from the input of business and the civil society at large. (i) An inclusive and effective process: launching the OECD/G20 BEPS Project and involving developing countries Accomplishing the actions set forth in this Action Plan requires an effective and comprehensive process that involves all relevant stakeholders. To this end, and in order to facilitate greater involvement of major non-oecd economies, the BEPS Project will be launched. In light of the strong interest and support expressed on several occasions by the G20, it is proposed that interested G20 countries that are not members of the OECD will be invited to be part of the project as Associates, i.e. on an equal footing with OECD members (including at the level of the subsidiary bodies involved in the work on BEPS), and will be expected to associate themselves with the outcome of the BEPS Project. Other non-members could be invited to participate as Invitees on an ad hoc basis. Developing countries also face issues related to BEPS, though the issues may manifest differently given the specificities of their legal and administrative frameworks. The UN participates in the tax work of the OECD and will certainly provide useful insights regarding the particular ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

122 26 3. ACTION PLAN concerns of developing countries. The Task Force on Tax and Development (TFTD) and the OECD Global Relations Programme will provide a useful platform to discuss the specific BEPS concerns in the case of developing countries and explore possible solutions with all stakeholders. Finally, existing mechanisms such as the Global Fora on Tax Treaties, on Transfer Pricing, on VAT and on Transparency and Exchange of Information for Tax Purposes will all be used to involve all countries in the discussions regarding possible technical solutions. (ii) Efficient process Political expectations are very high in most countries and the results and impact of the BEPS work must be in line with these political expectations. The BEPS Project will draw on the expertise of the Committee on Fiscal Affairs (CFA) and of its subsidiary bodies. While the practices of these subsidiary bodies are well-adapted to developing consensus on routine work, they require some adaptation to deliver results within the expected timelines. There is thus a need to find ways to accomplish the work quickly while seeking consensus. Each subsidiary body will need to seek new ways to find consensus as quickly as possible. This may involve, for example, setting up focus groups for the actions for which it is responsible. Each focus group could be composed of a relatively small number of delegates, with one country taking the lead and acting as co-ordinator. The focus groups would work actively in between meetings of the relevant subsidiary body, using remote working methods and reducing physical meetings to a minimum, to prepare drafts which would be circulated to and approved by the subsidiary body. (iii) Consulting with business and civil society Consultation with non-governmental stakeholders is also key. Business and civil society representatives will be invited to comment on the different proposals developed in the course of the work. The OECD s core relationship with civil society is through the Business and Industry Advisory Committee (BIAC) and the Trade Union Advisory Committee (TUAC) to the OECD. Nongovernmental organisations, think tanks, and academia will also be consulted. The OECD s work on the different items of the Action Plan will continue to include a transparent and inclusive consultation process, and a high-level policy dialogue with all interested parties will be organised on an annual basis. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

123 REFERENCES 27 References G20 (2012), Leaders Declaration, Los Cabos, Mexico, images/stories/docs/g20/conclu/g20_leaders_declaration_2012.pdf. OECD (2013a), Addressing Base Erosion and Profit Shifting, OECD Publishing, Paris. doi: / en. OECD (2013b), Co-operative Compliance: A Framework from Enhanced Relationship to Co-operative Compliance, by the Forum on Tax Administration, OECD Publishing, Paris. doi: / en. OECD (1998), Harmful Tax Competition: An Emerging Global Issue, OECD Publishing, Paris. doi: / en. ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

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125 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES 29 Annex A Overview of the actions and timelines This annex contains summary tables indicating the timeline for the actions included in the Action Plan. Table A.1. Summary of the BEPS Action Plan by action Action Description Expected output Deadline 1 Address the tax challenges of the digital economy Identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation. Issues to be examined include, but are not limited to, the ability of a company to have a significant digital presence in the economy of another country without being liable to taxation due to the lack of nexus under current international rules, the attribution of value created from the generation of marketable locationrelevant data through the use of digital products and services, the characterisation of income derived from new business models, the application of related source rules, and how to ensure the effective collection of VAT/GST with respect to the cross-border supply of digital goods and services. Such work will require a thorough analysis of the various business models in this sector. Report identifying issues raised by the digital economy and possible actions to address them September 2014 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

126 30 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES Table A.1. Summary of the BEPS Action Plan by action (continued) Action Description Expected output Deadline 2 Neutralise the effects of hybrid mismatch arrangements 3 Strengthen CFC rules Develop model treaty provisions and recommendations regarding the design of domestic rules to neutralise the effect (e.g. double non-taxation, double deduction, long-term deferral) of hybrid instruments and entities. This may include: (i) changes to the OECD Model Tax Convention to ensure that hybrid instruments and entities (as well as dual resident entities) are not used to obtain the benefits of treaties unduly; (ii) domestic law provisions that prevent exemption or non-recognition for payments that are deductible by the payor; (iii) domestic law provisions that deny a deduction for a payment that is not includible in income by the recipient (and is not subject to taxation under controlled foreign company (CFC) or similar rules); (iv) domestic law provisions that deny a deduction for a payment that is also deductible in another jurisdiction; and (v) where necessary, guidance on co ordination or tie-breaker rules if more than one country seeks to apply such rules to a transaction or structure. Special attention should be given to the interaction between possible changes to domestic law and the provisions of the OECD Model Tax Convention. This work will be co ordinated with the work on interest expense deduction limitations, the work on CFC rules, and the work on treaty shopping. Develop recommendations regarding the design of controlled foreign company rules. This work will be co ordinated with other work as necessary. Changes to the Model Tax Convention Recommendations regarding the design of domestic rules Recommendations regarding the design of domestic rules September 2014 September 2014 September 2015 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

127 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES 31 Table A.1. Summary of the BEPS Action Plan by action (continued) Action Description Expected output Deadline 4 Limit base erosion via interest deductions and other financial payments 5 Counter harmful tax practices more effectively, taking into account transparency and substance 6 Prevent treaty abuse Develop recommendations regarding best practices in the design of rules to prevent base erosion through the use of interest expense, for example through the use of related-party and third-party debt to achieve excessive interest deductions or to finance the production of exempt or deferred income, and other financial payments that are economically equivalent to interest payments. The work will evaluate the effectiveness of different types of limitations. In connection with and in support of the foregoing work, transfer pricing guidance will also be developed regarding the pricing of related party financial transactions, including financial and performance guarantees, derivatives (including internal derivatives used in intra-bank dealings), and captive and other insurance arrangements. The work will be co-ordinated with the work on hybrids and CFC rules. Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It will take a holistic approach to evaluate preferential tax regimes in the BEPS context. It will engage with non-oecd members on the basis of the existing framework and consider revisions or additions to the existing framework. Develop model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances. Work will also be done to clarify that tax treaties are not intended to be used to generate double non-taxation and to identify the tax policy considerations that, in general, countries should consider before deciding to enter into a tax treaty with another country. The work will be co ordinated with the work on hybrids. Recommendations regarding the design of domestic rules Changes to the Transfer Pricing Guidelines Finalise review of member country regimes Strategy to expand participation to non-oecd members Revision of existing criteria Changes to the Model Tax Convention Recommendations regarding the design of domestic rules September 2015 December 2015 September 2014 September 2015 December 2015 September 2014 September 2014 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

128 32 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES Table A.1. Summary of the BEPS Action Plan by action (continued) Action Description Expected output Deadline 7 Prevent the artificial avoidance of PE status 8 Assure that transfer pricing outcomes are in line with value creation: intangibles 9 Assure that transfer pricing outcomes are in line with value creation: risks and capital 10 Assure that transfer pricing outcomes are in line with value creation: other high-risk transactions Develop changes to the definition of PE to prevent the artificial avoidance of PE status in relation to BEPS, including through the use of commissionaire arrangements and the specific activity exemptions. Work on these issues will also address related profit attribution issues. Develop rules to prevent BEPS by moving intangibles among group members. This will involve: (i) adopting a broad and clearly delineated definition of intangibles; (ii) ensuring that profits associated with the transfer and use of intangibles are appropriately allocated in accordance with (rather than divorced from) value creation; (iii) developing transfer pricing rules or special measures for transfers of hard-to-value intangibles; and (iv) updating the guidance on cost contribution arrangements. Develop rules to prevent BEPS by transferring risks among, or allocating excessive capital to, group members. This will involve adopting transfer pricing rules or special measures to ensure that inappropriate returns will not accrue to an entity solely because it has contractually assumed risks or has provided capital. The rules to be developed will also require alignment of returns with value creation. This work will be co-ordinated with the work on interest expense deductions and other financial payments. Develop rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties. This will involve adopting transfer pricing rules or special measures to: (i) clarify the circumstances in which transactions can be recharacterised; (ii) clarify the application of transfer pricing methods, in particular profit splits, in the context of global value chains; and (iii) provide protection against common types of base eroding payments, such as management fees and head office expenses. Changes to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention September 2015 September 2014 September 2015 September 2015 September 2015 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

129 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES 33 Table A.1. Summary of the BEPS Action Plan by action (continued) Action Description Expected output Deadline 11 Establish methodologies to collect and analyse data on BEPS and the actions to address it 12 Require taxpayers to disclose their aggressive tax planning arrangements Develop recommendations regarding indicators of the scale and economic impact of BEPS and ensure that tools are available to monitor and evaluate the effectiveness and economic impact of the actions taken to address BEPS on an ongoing basis. This will involve developing an economic analysis of the scale and impact of BEPS (including spillover effects across countries) and actions to address it. The work will also involve assessing a range of existing data sources, identifying new types of data that should be collected, and developing methodologies based on both aggregate (e.g. FDI and balance of payments data) and micro-level data (e.g. from financial statements and tax returns), taking into consideration the need to respect taxpayer confidentiality and the administrative costs for tax administrations and businesses. Develop recommendations regarding the design of mandatory disclosure rules for aggressive or abusive transactions, arrangements, or structures, taking into consideration the administrative costs for tax administrations and businesses and drawing on experiences of the increasing number of countries that have such rules. The work will use a modular design allowing for maximum consistency but allowing for country specific needs and risks. One focus will be international tax schemes, where the work will explore using a wide definition of tax benefit in order to capture such transactions. The work will be co-ordinated with the work on co-operative compliance. It will also involve designing and putting in place enhanced models of information sharing for international tax schemes between tax administrations. Recommendations regarding data to be collected and methodologies to analyse them Recommendations regarding the design of domestic rules September 2015 September 2015 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

130 34 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES Table A.1. Summary of the BEPS Action Plan by action (continued) Action Description Expected output Deadline 13 Re-examine transfer pricing documentation 14 Make dispute resolution mechanisms more effective 15 Develop a multilateral instrument Develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries according to a common template. Develop solutions to address obstacles that prevent countries from solving treatyrelated disputes under MAP, including the absence of arbitration provisions in most treaties and the fact that access to MAP and arbitration may be denied in certain cases. Analyse the tax and public international law issues related to the development of a multilateral instrument to enable jurisdictions that wish to do so to implement measures developed in the course of the work on BEPS and amend bilateral tax treaties. On the basis of this analysis, interested Parties will develop a multilateral instrument designed to provide an innovative approach to international tax matters, reflecting the rapidly evolving nature of the global economy and the need to adapt quickly to this evolution. Changes to Transfer Pricing Guidelines and Recommendations regarding the design of domestic rules Changes to the Model Tax Convention Report identifying relevant public international law and tax issues Develop a multilateral instrument September 2014 September 2015 September 2014 December 2015 ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

131 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES 35 Table A.2. Summary of the BEPS Action Plan by timeline BY SEPTEMBER 2014 Action Description Expected Output Address the tax challenges of the digital economy Neutralise the effects of hybrid mismatch arrangements Identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation. Issues to be examined include, but are not limited to, the ability of a company to have a significant digital presence in the economy of another country without being liable to taxation due to the lack of nexus under current international rules, the attribution of value created from the generation of marketable location-relevant data through the use of digital products and services, the characterisation of income derived from new business models, the application of related source rules, and how to ensure the effective collection of VAT/ GST with respect to the cross-border supply of digital goods and services. Such work will require a thorough analysis of the various business models in this sector. Develop model treaty provisions and recommendations regarding the design of domestic rules to neutralise the effect (e.g. double non-taxation, double deduction, long-term deferral) of hybrid instruments and entities. This may include: (i) changes to the OECD Model Tax Convention to ensure that hybrid instruments and entities (as well as dual resident entities) are not used to obtain the benefits of treaties unduly; (ii) domestic law provisions that prevent exemption or non-recognition for payments that are deductible by the payor; (iii) domestic law provisions that deny a deduction for a payment that is not includible in income by the recipient (and is not subject to taxation under controlled foreign company (CFC) or similar rules); (iv) domestic law provisions that deny a deduction for a payment that is also deductible in another jurisdiction; and (v) where necessary, guidance on co ordination or tie-breaker rules if more than one country seeks to apply such rules to a transaction or structure. Special attention should be given to the interaction between possible changes to domestic law and the provisions of the OECD Model Tax Convention. This work will be co ordinated with the work on interest expense deduction limitations, the work on CFC rules, and the work on treaty shopping. Report identifying issues raised by the digital economy and possible actions to address them Changes to the Model Tax Convention Recommendations regarding the design of domestic rules ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

132 36 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES Table A.2. Summary of the BEPS Action Plan by timeline (continued) BY SEPTEMBER 2014 Action Description Expected Output Counter harmful tax practices more effectively, taking into account transparency and substance phase 1 Prevent treaty abuse Assure that transfer pricing outcomes are in line with value creation: intangibles phase 1 Re-examine transfer pricing documentation Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It will take a holistic approach to evaluate preferential tax regimes in the BEPS context. It will engage with non-oecd members on the basis of the existing framework and consider revisions or additions to the existing framework. Develop model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances. Work will also be done to clarify that tax treaties are not intended to be used to generate double non-taxation and to identify the tax policy considerations that, in general, countries should consider before deciding to enter into a tax treaty with another country. The work will be co ordinated with the work on hybrids. Develop rules to prevent BEPS by moving intangibles among group members. This will involve: (i) adopting a broad and clearly delineated definition of intangibles; (ii) ensuring that profits associated with the transfer and use of intangibles are appropriately allocated in accordance with (rather than divorced from) value creation; Develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries according to a common template. Finalise review of member country regimes Changes to the Model Tax Convention Recommendations regarding the design of domestic rules Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention Changes to Transfer Pricing Guidelines and Recommendations regarding the design of domestic rules ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

133 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES 37 Table A.2. Summary of the BEPS Action Plan by timeline (continued) BY SEPTEMBER 2014 Action Description Expected Output Develop a multilateral instrument phase 1 Analyse the tax and public international law issues related to the development of a multilateral instrument to enable jurisdictions that wish to do so to implement measures developed in the course of the work on BEPS and amend bilateral tax treaties. On the basis of this analysis, interested Parties will develop a multilateral instrument designed to provide an innovative approach to international tax matters, reflecting the rapidly evolving nature of the global economy and the need to adapt quickly to this evolution. Report identifying relevant public international law and tax issues BY SEPTEMBER 2015 Action Description Expected Output Strengthen CFC rules Limit base erosion via interest deductions and other financial payments Develop recommendations regarding the design of controlled foreign company rules. This work will be co ordinated with other work as necessary. Develop recommendations regarding best practices in the design of rules to prevent base erosion through the use of interest expense, for example through the use of related-party and third-party debt to achieve excessive interest deductions or to finance the production of exempt or deferred income, and other financial payments that are economically equivalent to interest payments. The work will evaluate the effectiveness of different types of limitations. In connection with and in support of the foregoing work, transfer pricing guidance will also be developed regarding the pricing of related party financial transactions, including financial and performance guarantees, derivatives (including internal derivatives used in intra-bank dealings), and captive and other insurance arrangements. The work will be co-ordinated with the work on hybrids and CFC rules. Recommendations regarding the design of domestic rules Recommendations regarding the design of domestic rules ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

134 38 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES Table A.2. Summary of the BEPS Action Plan by timeline (continued) BY SEPTEMBER 2015 Action Description Expected Output Counter harmful tax practices more effectively, taking into account transparency and substance phase 2 Prevent the artificial avoidance of PE status Assure that transfer pricing outcomes are in line with value creation: intangibles phase 2 Assure that transfer pricing outcomes are in line with value creation: risks and capital Assure that transfer pricing outcomes are in line with value creation/other highrisk transactions Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It will take a holistic approach to evaluate preferential tax regimes in the BEPS context. It will engage with non-oecd members on the basis of the existing framework and consider revisions or additions to the existing framework. Develop changes to the definition of PE to prevent the artificial avoidance of PE status in relation to BEPS, including through the use of commissionaire arrangements and the specific activity exemptions. Work on these issues will also address related profit attribution issues. Develop rules to prevent BEPS by moving intangibles among group members. This will involve: (iii) developing transfer pricing rules or special measures for transfers of hardto-value intangibles; and (iv) updating the guidance on cost contribution arrangements. Develop rules to prevent BEPS by transferring risks among, or allocating excessive capital to, group members. This will involve adopting transfer pricing rules or special measures to ensure that inappropriate returns will not accrue to an entity solely because it has contractually assumed risks or has provided capital. The rules to be developed will also require alignment of returns with value creation. This work will be co-ordinated with the work on interest expense deductions and other financial payments. Develop rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties. This will involve adopting transfer pricing rules or special measures to: (i) clarify the circumstances in which transactions can be recharacterised; (ii) clarify the application of transfer pricing methods, in particular profit splits, in the context of global value chains; and (iii) provide protection against common types of base eroding payments, such as management fees and head office expenses. Strategy to expand participation to non- OECD members Changes to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention Changes to the Transfer Pricing Guidelines and possibly to the Model Tax Convention ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

135 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES 39 Table A.2. Summary of the BEPS Action Plan by timeline (continued) BY SEPTEMBER 2015 Action Description Expected Output Establish methodologies to collect and analyse data on beps and the actions to address it Require taxpayers to disclose their aggressive tax planning arrangements Make dispute resolution mechanisms more effective Develop recommendations regarding indicators of the scale and economic impact of BEPS and ensure that tools are available to monitor and evaluate the effectiveness and economic impact of the actions taken to address BEPS on an ongoing basis. This will involve developing an economic analysis of the scale and impact of BEPS (including spillover effects across countries) and actions to address it. The work will also involve assessing a range of existing data sources, identifying new types of data that should be collected, and developing methodologies based on both aggregate (e.g. FDI and balance of payments data) and micro-level data (e.g. from financial statements and tax returns), taking into consideration the need to respect taxpayer confidentiality and the administrative costs for tax administrations and businesses. Develop recommendations regarding the design of mandatory disclosure rules for aggressive or abusive transactions, arrangements, or structures, taking into consideration the administrative costs for tax administrations and businesses and drawing on experiences of the increasing number of countries that have such rules. The work will use a modular design allowing for maximum consistency but allowing for country specific needs and risks. One focus will be international tax schemes, where the work will explore using a wide definition of tax benefit in order to capture such transactions. The work will be co-ordinated with the work on co-operative compliance. It will also involve designing and putting in place enhanced models of information sharing for international tax schemes between tax administrations. Develop solutions to address obstacles that prevent countries from solving treaty-related disputes under MAP, including the absence of arbitration provisions in most treaties and the fact that access to MAP and arbitration may be denied in certain cases. Recommendations regarding data to be collected and methodologies to analyse them Recommendations regarding the design of domestic rules Changes to the Model Tax Convention ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

136 40 ANNEX A. OVERVIEW OF THE ACTIONS AND TIMELINES Table A.2. Summary of the BEPS Action Plan by timeline (continued) BY DECEMBER 2015 Action Description Expected Output Limit base erosion via interest deductions phase 2 Counter harmful tax practices more effectively, taking into account transparency and substance phase 3 Develop a multilateral instrument phase 2 Develop recommendations regarding best practices in the design of rules to prevent base erosion through the use of interest expense, for example through the use of related-party and third-party debt to achieve excessive interest deductions or to finance the production of exempt or deferred income, and other financial payments that are economically equivalent to interest payments. The work will evaluate the effectiveness of different types of limitations. In connection with and in support of the foregoing work, transfer pricing guidance will also be developed regarding the pricing of related party financial transactions, including financial and performance guarantees, derivatives (including internal derivatives used in intra-bank dealings), and captive and other insurance arrangements. The work will be co-ordinated with the work on hybrids and CFC rules. Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime. It will take a holistic approach to evaluate preferential tax regimes in the BEPS context. It will engage with non-oecd members on the basis of the existing framework and consider revisions or additions to the existing framework. Analyse the tax and public international law issues related to the development of a multilateral instrument to enable jurisdictions that wish to do so to implement measures developed in the course of the work on BEPS and amend bilateral tax treaties. On the basis of this analysis, interested Parties will develop a multilateral instrument designed to provide an innovative approach to international tax matters, reflecting the rapidly evolving nature of the global economy and the need to adapt quickly to this evolution. Changes to the Transfer Pricing Guidelines Revision of existing criteria to identify harmful tax practices Multilateral instrument ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING OECD 2013

137 ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where governments work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Union takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. OECD PUBLISHING, 2, rue André-Pascal, PARIS CEDEX 16 ( P) ISBN No

138 Action Plan on Base Erosion and Profit Shifting Contents Chapter 1. Introduction Chapter 2. Background Chapter 3. Action Plan Annex A. Overview of the actions and timelines Consult this publication on line at This work is published on the OECD ilibrary, which gathers all OECD books, periodicals and statistical databases. Visit for more information. isbn P -:HSTCQE=WUW\UW:

139 Bilag 7

140 Public Consultation WHITE PAPER ON TRANSFER PRICING DOCUMENTATION 30 July 2013

141 WHITE PAPER ON TRANSFER PRICING DOCUMENTATION Over the last 20 years, transfer pricing documentation requirements have rapidly spread around the world. This trend continues every year with new additions to the list of countries requiring preparation of transfer pricing documentation. The proliferation of diverse local transfer pricing documentation requirements, combined with a dramatic increase in the volume and complexity of international intra-group trade and the heightened scrutiny of transfer pricing issues by tax authorities, makes transfer pricing documentation one of the top tax compliance priorities on the agendas of both tax authorities and businesses. Given this state of play, in November 2011, Working Party No. 6 of the Committee on Fiscal Affairs ( WP6 ), approved the programme of work on transfer pricing simplification, which included as one of its work streams a project on the simplification or streamlining of transfer pricing documentation requirements. This White Paper on Transfer Pricing Documentation was developed by WP6 as part of the aforementioned work stream. On 19 July 2013 the OECD published an Action Plan on Base Erosion and Profit Shifting ( BEPS Action Plan ). Action 13 in the BEPS Action Plan states that the OECD will develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries, according to a common template. The outlined BEPS action is consistent with the directive of the G8 summit meeting held on June 2013 at Lough Erne. The communique issued in connection with that meeting states as follows: Comprehensive and relevant information on the financial position of multinational enterprises aids all tax administrations effectively to identify and assess tax risks. The information would be of greatest use to tax authorities, including those of developing countries, if it were presented in a standardised format focusing on high level information on the global allocation of profits and taxes paid. We call on the OECD to develop a common template for country-by-country reporting to tax authorities by major multinational enterprises, taking account of concerns regarding non-cooperative jurisdictions. This will improve the flow of information between multinational enterprises and tax authorities in the countries in which multinationals operate to enhance transparency and improve risk assessment. This White Paper on Transfer Pricing Documentation surveys the current state of affairs regarding transfer pricing documentation, considers the purposes and objectives of transfer pricing documentation, and makes suggestions as to how transfer pricing documentation rules might be modified to make transfer pricing compliance simpler and more straightforward, while at the same time providing tax authorities with more focused and useful information for consideration in connection with transfer pricing risk assessment and transfer pricing audits. The White Paper notes that clear and accurate understanding of transfer pricing risk features will often require more information of a big picture nature than is often obtained through existing individual country focused documentation requirements and suggests a two tiered approach through which both the big picture information is made available for risk assessment purposes and detailed information on the related party transactions can be required when the arm s length character of specific transactions needs to be assessed. As Action 13 of the BEPS Action Plan and the directive of the G8 summit meeting at Lough Erne are also directed towards making big picture financial information available to tax authorities, the work reflected in this White Paper is of direct relevance for and will be integrated with the work on transfer pricing documentation identified in the BEPS Action Plan. 1

142 The CFA believes that it is essential for our work on these subjects that we obtain input from the business community and from other interested non-governmental parties. Therefore, as a first step, the CFA is inviting public comments on the White Paper on Transfer Pricing Documentation in order to launch a global conversation on how transfer pricing documentation rules can be improved, standardised and simplified. The OECD also invites comments on whether additional or other possible mechanisms can be developed for complying with the transfer pricing documentation elements of the BEPS Action Plan Interested parties are invited to send comments on the White Paper on Transfer Pricing Documentation by 1 October Comments should be sent electronically (in Word format) to [email protected]. In your submission you should clearly indicate: a) whether you have any objections with posting your comments in response to this invitation on the OECD website; and, b) in which capacity you are submitting comments in response to this invitation (e.g. as a representative of a business or professional organization or in your personal capacity). It is anticipated that a public consultation on this White Paper and other transfer pricing matters will be held at the OECD Conference Centre in Paris, France on November Registration information for the public consultation will be posted on the OECD website during September

143 TABLE OF CONTENTS WHITE PAPER ON TRANSFER PRICING DOCUMENTATION... 1 I. Introduction... 4 II. Overview of existing guidance and initiatives on transfer pricing documentation... 5 A. Local Country Documentation Regimes... 5 B. Documentation Guidance Provided by International Organisations Chapter V of the OECD Transfer Pricing Guidelines European Union Guidance on Transfer Pricing Documentation Pacific Association of Tax Administrators Documentation Package International Chamber of Commerce (ICC) Proposals C. Discussions with Selected Business Representatives D. Conclusions Regarding the Current Documentation Environment III. Purposes of transfer pricing documentation requirements A. Transfer pricing risk assessment B. Taxpayer s assessment of its compliance with the arm s length principle C. Provision of information necessary to start, conduct and complete an audit D. Conclusions regarding the purposes of transfer pricing documentation IV. A Tiered Approach to Transfer Pricing Documentation A. Information Required for a Transfer Pricing Risk Assessment B. Structure of a Global Documentation Package C. Mechanics of Preparing Transfer Pricing Documentation V. Development of a Coordinated Approach to Documentation ANNEX 1: MULTI-COUNTRY SURVEY ON TRANSFER PRICING DOCUMENTATION REQUIREMENTS ANNEX 2: MULTI-COUNTRY SURVEY ON TRANSFER PRICING DISCLOSURE REQUIREMENTS SUBMITTED WITH THE ANNUAL TAX RETURN

144 I. Introduction 1. Since first introduced by the United States in 1994, transfer pricing documentation requirements have spread around the world. While individual country approaches to documentation vary significantly, the number of countries requiring preparation of transfer pricing documentation increases every year. The proliferation of transfer pricing documentation requirements, combined with a dramatic increase in the volume and complexity of international intra-group trade and the heightened scrutiny of transfer pricing issues by tax authorities, makes transfer pricing documentation one of the top tax compliance priorities on the agendas of both tax authorities and businesses. 2. Transfer pricing documentation rules are, and will continue to be, elements of local law enacted in individual countries. However, in today s globally integrated economy, transfer pricing documentation should not be seen purely as a local country compliance tool related to enforcement of the transfer pricing rules in an individual jurisdiction. Rather, transfer pricing enforcement and compliance should be thought of as an issue with multijurisdictional ramifications and documentation rules should be developed with this in mind. 1 When viewed in this light, efficient operation of the international transfer pricing system in a global economy presents an opportunity for international coordination in order to simplify and consolidate the compliance obligations of business, while at the same time assuring that tax authorities have ready access to the information necessary to efficiently enforce their transfer pricing laws. 3. The existing guidance on documentation contained in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations ( OECD TPG ) is not sufficient to meet the transfer pricing compliance requirements of today s economy. Chapter V of the OECD TPG was drafted over 15 years ago, at a time when tax authorities and taxpayers had less experience in creating and using transfer pricing documentation. As an example of the change occurring since current Chapter V was published, one business representative reported that his company had gone from producing around ten documentation studies per year in the early 1990s to approximately two thousand separate transfer pricing studies by There have been efforts at an international level to develop a standardised description of the documentation that MNEs should provide to tax authorities to demonstrate the arm s length nature of their cross-border intra-group transactions. However, these initiatives have, for several reasons, not fully met the needs of either taxpayers or tax administrations. As a result, the current state of affairs is one in which business feels overburdened by the compliance demands of rapidly proliferating and rather divergent local documentation rules, while tax authorities often find typical transfer pricing documentation studies to be less than fully informative and not adequate for their tax enforcement needs. 5. This paper surveys the current state of affairs regarding transfer pricing documentation, considers the purposes and objectives of transfer pricing documentation rules, and makes suggestions as to how transfer pricing documentation rules might be modified in order to make transfer pricing compliance simpler and more straightforward, while at the same time providing tax authorities with more useful information for consideration in connection with transfer pricing audits. 1 ICC Says Documentation Rules Could Break Corporate Tax System, Tax Management Transfer Pricing Report, BNA (June 2010). 2 McWilliams, R., GE Counsel Details Transfer Pricing Documentation Challenges, Tax Management Transfer Pricing report, BNA (April 2007). 4

145 II. Overview of existing guidance and initiatives on transfer pricing documentation 6. Existing transfer pricing documentation rules can be divided into two groups. The first of these are the rules of individual countries. Such rules are adopted through local legislation or regulation and are enforced by local country tax administrations. In some, but not all, countries, compliance with transfer pricing documentation rules is encouraged by adoption of a complementary penalty regime. Some countries have a single set of transfer pricing documentation rules that are intended to comprehensively elicit the relevant transfer pricing information. Other countries segregate transfer pricing documentation rules from other information reporting requirements that may be relevant for transfer pricing purposes. 7. The second group of documentation rules and guidelines are those adopted by international organisations in an attempt to simplify and streamline the patchwork of local country rules. These two groups of documentation rules are described in general terms below. A. Local Country Documentation Regimes 8. As an initial step in its work on transfer pricing documentation, WP6 undertook in 2011 and 2012 an internal review of the documentation requirements of a number of individual countries. This review is summarised in Annex I. Important features of existing local country transfer pricing documentation rules and practices identified by WP6 in the survey performed, are the following: 9. Increasing number of countries with transfer pricing documentation rules: Transfer pricing documentation 3 plays a key role in the administration of transfer pricing rules for both tax authorities and taxpayers. For this reason, the number of countries introducing specific documentation requirements or guidance grows every year. The OECD survey indicated that all countries surveyed, except for one, had transfer pricing documentation requirements, articulated either through a statutory obligation or through an explicit recommendation to have transfer pricing documentation in place. 10. Transfer pricing documentation is addressed at a domestic level: Despite the international context and global scope of transfer pricing, documentation for transfer pricing purposes is most often approached from a national perspective. Documentation practices are governed by domestic legislation and regulations, and are implemented with a strong domestic tax enforcement point of view. Consequently, there can be a significant gap between transfer pricing documentation requirements, which have a national and bilateral focus, and the activity carried out by MNEs, which may have a more global focus. This approach has led to a situation in which country-specific transfer pricing documentation requirements can vary significantly from country to country. Furthermore, for a single cross-border controlled transaction, taxpayers are often required to comply with two or more sets of transfer pricing documentation requirements. The compliance burden and costs for taxpayers can sometimes be substantial. 11. Transfer pricing documentation requirements vary widely among countries: Practice amongst countries varies significantly in terms of the extent of guidance on how to prepare transfer pricing documentation. A first category of countries have a general requirement that taxpayers prepare and submit 3 It should be noted that the term transfer pricing documentation is not always used in a consistent fashion. In some countries, references to transfer pricing documentation primarily refer to internal corporate records related to specific transactions, including agreements, correspondence, and internal deliberative writings concerning a transaction. In other countries, transfer pricing documentation often refers to a stylised analysis of the transfer pricing aspects of a transaction or series of transactions. Such an analysis may refer to internal transactional records, but it will predominantly consist of specially prepared functional analyses, consideration of appropriate transfer pricing methods, and economic analyses designed to demonstrate that results of transactions conform with applicable transfer pricing requirements. These differing notions of the term documentation can lead to misunderstandings when issues related to transfer pricing documentation are discussed in international fora. 5

146 relevant documentation which can demonstrate the arm s length nature of the conditions of the controlled transactions. A second category of countries have opted to provide more detailed guidance on how to prepare transfer pricing documentation and have specified in their primary or secondary legislation either the steps in the transfer pricing analysis which need to be documented or those documents which need to be produced by the taxpayer in order to demonstrate that their controlled transactions satisfy the arm s length principle. Some country rules specifically dictate the format of documentation submissions and specify the forms to be completed. Required formats, where they exist, vary from country to country. 12. One-sided analysis of the controlled transaction (focused on domestic side) is common: The majority of countries adopt a strongly one-sided approach, focusing mainly on the domestic side of the controlled transaction, and in particular on the domestic taxpayer and the domestic tax treatment of the cross-border controlled transaction. While there are notable exceptions in some countries, the financial results of the related counterparties to those transactions are often not treated as required subjects for documentation. 13. Documentation does not always yield a complete understanding of the global business: The information requested from the taxpayer often does not provide a clear picture of the global business context of the individual transactions being documented. Except for the legal and organisational structure, very few countries ask for information on the global business of the MNE group, other cross-border controlled transactions between foreign associated enterprises belonging to the MNE group which may directly or indirectly affect the pricing of the taxpayer s controlled transactions; income or tax paid by the MNE, a comprehensive description of the global supply chain, or a comprehensive summary of the MNE s global APAs and rulings in other countries on similar issues. 14. Significant divergences exist in the nature and detail of country transfer pricing documentation requirements: Although there are certain categories of information common to all countries transfer pricing documentation rules, the type and detail of the information that the taxpayer should maintain and submit ranges from very exhaustive in some countries to more high level in others. The level of discretion accorded business in determining which information is relevant also varies from country to country. 15. Purposes served by transfer pricing documentation are not always clear: Most transfer pricing requirements do not explicitly describe the reasons for their documentation demands. Many countries rules seem to be focused on obtaining general background information on the taxpayer and a statement of its transfer pricing positions. Other countries seem to seek through documentation most or all of the information they might conceivably require to conduct a thorough transfer pricing audit. In some countries, the scope of the government s authority to obtain taxpayer information in an audit is linked to the scope of the transfer pricing documentation rules. Generally, there is little explicit emphasis on obtaining the information required for a transfer pricing risk assessment. However, an increasing number of countries have put in place additional disclosure or information reporting requirements regarding taxpayers controlled transactions to be submitted at the time of the annual tax return. A few countries also now require disclosure of the taxpayer s financial statement evaluation of material transfer pricing exposures. This information is not usually considered to be part of the transfer pricing documentation in a strict sense, but such additional information may be used by tax authorities for risk assessment purposes. 16. Divergent practices regarding timing of documentation disclosures. Many countries seek information available at the time of filing the tax return. Other countries require information as of the time of audit. There is also a variety in practice regarding the amount of time given to taxpayers to respond to specific tax authority requests for documentation and other audit related information requests. These differences in content requirements, timing of providing information, and the lack of clear focus on the 6

147 purpose of documentation add to taxpayers difficulties in setting priorities and in providing the right information to the tax authorities at the right time. B. Documentation Guidance Provided by International Organisations 17. This section of the paper presents an overview of previous international initiatives related to transfer pricing documentation. All these initiatives originated as a response to the potential difficulties that MNEs face in complying with a continuously increasing number of local law and administrative requirements for transfer pricing documentation. The original aim of these international approaches was to provide guidance in order to minimise potential adverse consequences for taxpayers derived from the multiplicity of documentation requirements, which include costly duplicative administrative and recordkeeping requirements and lack of certainty about the minimum standards that must be satisfied in each jurisdiction in order to comply with local rules and avoid penalties. 1. Chapter V of the OECD Transfer Pricing Guidelines 18. The OECD TPG adopted in 1995 included a chapter on transfer pricing documentation, which constituted the first attempt to achieve a coordinated approach following the 1994 United States 482 Regulations and associated penalty regime. Chapter V of the OECD TPG provides general guidance for tax administrations to take into account in developing rules and/or procedures on documentation to be obtained from taxpayers in connection with a transfer pricing inquiry. It also provides guidance to assist taxpayers in identifying documentation that would be most helpful in showing that their controlled transactions satisfy the arm's length principle and hence in resolving transfer pricing issues and facilitating tax examinations There is considerable emphasis in Chapter V of the 1995 TPG on the need for reasonableness in the documentation process from the perspective of both taxpayers and tax administrations, as well as on the desire for a greater level of cooperation between tax administrations and taxpayers in addressing documentation issues in order to avoid excessive documentation requirements while at the same time providing for adequate information to apply the arm's length principle reliably The current guidance in Chapter V does not provide for an exhaustive list of documents to be included in a transfer pricing documentation package, as it is not possible to define in any generalised way the precise extent and nature of information that would be reasonable for the tax administration to require and for the taxpayer to produce at the time of the examination. 6 It outlines the information that could be relevant, depending on the individual circumstances, but stipulates that the information described should not be viewed as a minimum compliance requirement and is not intended to set forth an exhaustive list of the information that a tax administration may be entitled to request. 21. The 1995 TP Guidelines do not contain any clear guidance with respect to the link between the process for documenting transfer pricing and the administration of penalties and of the burden of proof. The 1995 TP Guidelines do not differentiate between documentation that might be useful to a tax 4 See OECD TPG, paragraph 5.1. Additional comments on documentation requirements are contained in Chapter I (The Arm s Length Principle), Chapter II (Transfer Pricing Methods), Chapter III (Comparability Analysis), Chapter IV (Administrative Approaches to Avoiding and Resolving Transfer Pricing Disputes), Chapter VIII (Cost Contribution Arrangements) and Chapter IX (Transfer Pricing Aspects of Business Restructurings), as well as in the Annex to Chapter IV (Guidelines for MAP APAs). 5 See OECD TPG, paragraph See OECD TPG, paragraph

148 administration in undertaking a transfer pricing risk assessment and the information a tax administration may wish to review in the course of a full audit of a taxpayer s transfer pricing practices. 2. European Union Guidance on Transfer Pricing Documentation 22. In June 2006, the Council of the EU agreed to a Code of Conduct on Transfer Pricing Documentation for Associated Enterprises in the European Union ( EUTPD ). 7 Within the framework of the OECD TPG, the EUTPD aims at standardising the documentation that MNEs doing business in Europe must provide to tax authorities on the pricing of cross-border intra-group transactions in Europe, while achieving a balance between the tax administrations right to obtain from a taxpayer the information necessary to assess the arm s length nature of the taxpayer s transfer pricing and the compliance costs for the taxpayer. 23. For MNEs, the EUTPD is optional, 8 although a company adopting the EUTPD should do so in a way that is consistent throughout the European Union and from year to year. For European Union ( EU ) Member States, the EUTPD is a political commitment and it does not affect EU Member States' rights and obligations or the respective spheres of competence of the EU Member States and the EU. EU Member States are, however, expected to implement the EUTPD by legislating for it in the national law or through administrative guidelines, when introducing or amending legal or administrative documentation requirements. This would enable MNEs to use the same documentation in all EU Member States. 24. The EUTPD consists of two main elements: the masterfile and the country specific documentation. In addition, EU Member States retain the right to require a taxpayer to provide more information and documents than would be contained in the EUTPD, but only upon specific request or during a tax audit. 25. The key features of the masterfile, as contemplated by the EUTPD, are: It would contain common standardized information relevant for all European Union group members of an MNE. It should follow the economic reality of the enterprise and provide a blueprint of the company and its transfer pricing system for all EU Member States concerned. It would be available to all EU Member States involved in a specific controlled transaction. It would require the taxpayer to provide information on: the MNE group; the business and business strategy; the controlled transactions involving associated enterprises in the EU and their comparability analysis; the enterprise's transfer pricing policy; the ownership of intangibles; and a list of the cost contribution arrangements ( CCAs ), advance pricing arrangements ( APAs ) and rulings covering transfer pricing aspects as far as group members in the EU are affected. 26. Under the EUTPD, the country-specific documentation has the following characteristics: 7 Resolution of the Council and of the representatives of the governments of the Member States, meeting within the Council, of 27 June 2006 on a code of conduct on transfer pricing documentation for associated enterprises in the European Union (2006/C 176/01). 8 It can apply to transactions between: a) two associated enterprises resident in the EU; or b) an enterprise resident outside the EU and an associated enterprise resident in the EU. Some businesses express the view that the optional nature of the EU approach is undermined in practice by uniform requests in some countries for the masterfile in virtually every case. 8

149 It would consist of a set of standardized documentation for each of the specific EU Member States involved. It would generally be available only to the specific member state concerned. It would contain information relevant to that country only, such as: the business and business strategy; country-specific controlled transactions and their comparability analysis; particular transfer pricing methods used; information on internal and/or external comparables, if available; and, an explanation of how the group s intercompany transfer pricing policy is implemented and applied by the local associated enterprise. 27. The masterfile and the country-specific documentation would, together, constitute the documentation file for the relevant EU Member States and should provide tax authorities with greater transparency on the EU transfer pricing system of MNEs. When taxpayers comply in good faith, in a reasonable manner and within a reasonable time with standardised and consistent documentation, EU Member States are advised not to impose documentation-related penalties. 28. While there are several advantages to implementing the EUTPD (e.g. simplification of and consistent approach to transfer pricing documentation and cost savings through avoiding duplication of effort), a first survey of the European Commission launched in 2009 indicated that, at that time, numerous taxpayers had elected not to fully implement the EUTPD guidance. Some tax publications from the same period suggest the following: 9 In practice, there may be a lack of clarity as to the acceptability of the EUTPD across EU Member States. Furthermore, the flexibility given to EU Member States regarding the implementation of documentation rules could create a degree of uncertainty. The variability in local country requirements and the enforcement of local transfer pricing documentation requirements in some countries could make the masterfile less useful than it might otherwise be. The requirement to disclose all APAs and rulings as part of the masterfile, which is made available to all tax authorities in the EU, could be seen as a stumbling block for some taxpayers. The adoption of the EUTPD does not shelter MNEs from further questioning by the tax authorities or the obligation to submit more documents when requested. The adoption of the EUTPD does not always protect taxpayers against transfer pricing adjustments. According to some business representatives, the wider dissemination of European-wide information by taxpayers could lead to increased scrutiny by tax authorities and challenges on the same issues in multiple countries, as well as an increased risk of being subject to a tax audit. 29. However, with respect to the findings on the implementation of the EUTPD by taxpayers, the data available from the EU 2009 review may not be fully up date. The European Commission survey of 2009 followed shortly the adoption of the EUTPD in June 2006 and EU Member States may not have had sufficient time to fully implement the new guidance. In addition, in recent years numerous taxpayers have indicated that they follow the EUTPD in practice without officially opting for it. The Commission intends 9 See: Guðmundsson, A. K., Lost in Transfer Pricing: The Pitfalls of EU Transfer Pricing Documentation, International Transfer Pricing Journal, IBFD (January/February 2009), pages 25-28; Nichols, W. and Hughes, L., EU Transfer Pricing Documentation White Elephant or Missed Opportunity?, Transfer Pricing International Journal, BNA (February 2010). See European Companies Questioning Benefits of EU Masterfile Documentation Approach, Tax Management Transfer Pricing Report, BNA (May 2006). 9

150 to launch a new survey on the EUTPD in 2013 that should provide a full and more up to date picture on the current situation prevailing in the EU. 30. It remains to be seen whether the approach of the EUTPD would be acceptable outside the EU, e.g. the EU approach appears to be less detailed and the information it requires seems to be less extensive than the requirements in at least some non-eu countries. 3. Pacific Association of Tax Administrators Documentation Package 31. In March 2003, the Pacific Association of Tax Administrators ( PATA ), whose members include Australia, Canada, Japan and the United States, released principles under which taxpayers can create uniform transfer pricing documentation ( PATA documentation package ) so that one set of documentation would meet the respective transfer pricing documentation provisions of each of the four member countries. 32. As under the EUTPD rules, the use of the PATA documentation package by a taxpayer is voluntary and it is intended to be consistent with the general principles outlined in Chapter V of the OECD TPG. 33. The PATA documentation package provides for three operative principles. According to these, MNEs need to: make reasonable efforts to establish transfer prices in compliance with the arm's length principle; maintain contemporaneous documentation of their efforts to comply with the arm's length principle; and, produce, in a timely manner, that documentation upon request by a PATA member tax administrator. If these principles are satisfied, use of the PATA documentation package will protect the taxpayer from domestic transfer pricing penalties that might otherwise apply in each of the four jurisdictions. 34. The PATA documentation package provides for an exhaustive list of documents (organised in 10 headings and covering 48 specific document areas) that PATA tax administrations view as necessary in order to provide relief from the otherwise applicable transfer pricing penalties. It is recognized that in certain instances some of the listed documents will not be needed. Nevertheless, the tax authorities retain the possibility to request additional information not listed in the package when necessary to examine an MNE s conclusions as to the arm s length nature of its arrangements. 35. To date, the practical impact of the PATA documentation package seems to be fairly limited as it does not seem to be widely utilized by MNEs. Some of the concerns raised by business are: The PATA member countries reached a consensus on documentation requirements by demanding everything in the domestic requirements of each of the four countries. Accordingly, practitioners have noted that the list of required documents is more elaborate than any single country s requirements and contains some requirements that may not be relevant and can be burdensome. The PATA documentation package does not seem to incorporate the notions of relevance, materiality, or the cost of preparing the documentation in relation to the value of the intercompany transaction under review. The tax authorities decide whether a request for further specific items of information is reasonable and, therefore, it is unclear whether the comparatively large documentation burden faced by medium-sized companies will be eased. Satisfaction of the PATA documentation package does not preclude PATA member tax administrations from making transfer pricing adjustments, and assessing any interest due on those adjustments. 10

151 The definition of reasonable efforts is left to the local laws of the PATA member countries. The views of PATA member countries on what constitutes reasonable efforts do not converge in all cases. Some commentators suggest this undermines the goal of uniformity and certainty for taxpayers. 4. International Chamber of Commerce (ICC) Proposals In December 2003 the ICC Commission on Taxation produced a policy statement Transfer Pricing Documentation: A case for international cooperation. For the ICC, the issue of harmonising transfer pricing documentation is intrinsically linked to the administration of the burden of proof, to penalties, and to the process for eliminating double taxation. 37. This ICC policy statement proposes a set of rules allowing MNEs to prepare a single uniform package of documentation that would be considered reasonable by all involved tax authorities. This proposal would be based on three key principles: the documentation package should be based upon information that is readily available in the bookkeeping and management reports of the MNE concerned; common documentation rules should be a reasonable and balanced reflection of the various national approaches; and once an MNE fulfils the proposed documentation requirements, it should be relieved of any liability for penalties and from having any special burden of proof. 38. These ICC recommendations have not developed into a widely recognized standard. C. Discussions with Selected Business Representatives 39. As part of the preparation of this White Paper, the OECD Secretariat conducted a series of conversations with a few members of BIAC. The purpose of these conversations was to identify at a general level issues that the business community finds particularly troubling in their efforts to comply with existing transfer pricing documentation rules. This survey of business sentiment was neither comprehensive nor scientific. 11 However, the conversations reflected certain recurring themes that are worth noting in the context of this paper. 40. The following observations were made repeatedly by the business representatives with whom we spoke: Businesses perceive a fairly steady expansion in the quantity of information required by country documentation rules. The observation was regularly made that the documentation required has become detailed and massive. In a similar vein, businesses expressed the opinion that constant changes in the amount, nature and format of documentation required created a great deal of work without adding particular value. There was a general observation that relatively minor differences in the required formatting of documentation dictated by individual countries gave rise to significant commitments of time and substantial expense, even where the substance of the information requests were largely consistent. Several businesses expressed the view that some effort to standardise formatting would be very helpful. 10 For more detailed information on this initiative, please see the ICC Policy Statement Transfer Pricing Documentation: A case for international cooperation, available at 11 It is anticipated that written public comments and public consultation meetings on this White Paper will help to fill in gaps in understanding resulting from the narrow range of the initial discussions. 11

152 Several business representatives suggested that because the studies performed in response to documentation requirements may be quite massive, local tax auditors often do not seem to be able to fully digest or understand what is being said. Auditors often ask questions that are answered in the documentation. It was suggested that different views among countries regarding the acceptability of regional comparable sets create substantial burdens. Insistence of some countries on the identification of local comparables compounds the cost and difficulty of preparing documentation. Business representatives expressed mixed views regarding the savings resulting from a two tier documentation system like that permitted in the European Union. Some thought that the masterfile concept created a compliance cost saving. Others believed that the masterfile concept merely added to the number of documents that need to be prepared and made it more difficult for businesses to exercise judgment about what level of information should satisfy tax authorities in a particular case. This latter sentiment was expressed particularly by conglomerates that carry on more than one distinct line of business and find that a total corporate overview is not necessarily useful in understanding the economics of any particular autonomous business line. Although it may be a substantive point rather than a pure documentation issue, it was suggested by business representatives that requirements to perform new comparable searches every year added cost with very little added value. It was suggested that requiring only freshening of data for previously identified comparables annually, with new comparable searches being required only every three or four years, would create significant cost savings. Some businesses expressed the view that notwithstanding the quality of the work going into documentation, many governments will not accept documentation at face value and either engage in detailed fact checking or require expensive third party confirmations or audits of the relevant information. A recurring theme was that many countries documentation standards lack materiality thresholds. Most business representatives indicated that notwithstanding the lack of materiality standards in local country documentation rules, the businesses are likely to impose their own materiality screens as a cost-saving device. D. Conclusions Regarding the Current Documentation Environment 41. It is evident that existing transfer pricing documentation requirements vary significantly from country to country. That fact makes it difficult for business to consolidate and streamline compliance practices since documentation in each country must be tailored to the specific requirements of local country law. Moreover, the local country focus of many countries documentation requirements makes it difficult for tax authorities to easily get a big picture view of the MNE group s transfer pricing practices and results. This lack of a broad perspective may lead to countries pursuing matters of less importance in great detail, while missing matters of greater importance or higher transfer pricing risk. 42. International efforts to create uniformity in documentation practice have not been particularly effective. Some international efforts contain promising approaches, but because of their lack of universal application and a lack of flexibility they have not become as widely accepted or provided as important a savings in compliance burden as might be expected. Other international efforts premised on compiling every participating country s documentation demands into one omnibus set of requirements provide little in the way of simplification and have therefore not been widely used by taxpayers. 12

153 43. The result of this state of affairs is a growing compliance burden on business as more and more countries adopt transfer pricing documentation rules. This state of affairs either increases costs for MNEs in an area of activity that may be largely viewed by business as having few benefits beyond penalty avoidance, or gives rise to decisions to simply not comply in the time and manner desired by the governments promulgating the documentation rules. Ad hoc materiality and risk screens are applied by business, largely as a matter of self-preservation, given the burden of complying with the rules as written. As a result, a serious question exists as to whether documentation rules are performing their intended purposes in the most efficient possible manner. 44. Clearly, it seems that there is room for improvement. III. Purposes of transfer pricing documentation requirements 45. Any consideration of the simplification and improvement of transfer pricing documentation practices around the world should start with a consideration of the purposes for requiring transfer pricing documentation. It may be that the existing diversity of documentation requirements can be traced, at least in part, to a failure to agree on and clearly articulate the fundamental reasons for requiring transfer pricing documentation. Moreover, the development of a stronger consensus around the identification of the most important purposes served by transfer pricing documentation may provide direction with regard to the preferred form and content of the required documentation package. 46. At least three different reasons can be identified for governments to require the creation and submission of transfer pricing documentation. These are: To provide governments with the information necessary to conduct an informed transfer pricing risk assessment at the commencement of a tax audit; To assure that taxpayers have given appropriate consideration to transfer pricing requirements in establishing prices and other conditions for related party transactions and in reporting the income derived from such transactions in their tax returns; To provide governments with all of the information that they require in order to conduct an appropriately thorough audit of the transfer pricing practices of entities subject to tax in their jurisdiction. This section of the paper considers the purposes served by transfer pricing documentation requirements. A. Transfer pricing risk assessment 47. In recent years emphasis has been placed by tax administrations and taxpayers on the development and implementation of sound tax risk assessment and management systems for purposes of administering and complying with transfer pricing rules. The emphasis on transfer pricing risk assessment arises from the fundamental observation that effective risk identification and assessment are the key steps which enable tax administrations to select the right cases for transfer pricing audits or inquiries. 12 Because tax administrations operate with limited resources, it is important for them to accurately evaluate at the very outset of a possible audit, whether a taxpayer s transfer pricing arrangements warrant in depth review and a commitment of significant tax enforcement resources, or whether they do not warrant such a detailed examination. Taxpayers have also noted that where audits and enquiries are not based on 12 OECD (2012), Dealing Effectively with the Challenges of Transfer Pricing, OECD Publishing. 13

154 effective risk assessment cases last much longer, and all too often the most significant transfer pricing issues are missed. 13 Thus, particularly with regard to transfer pricing issues (which generally are complex and fact-intensive), effective risk identification becomes an essential prerequisite for more cost effective audits and enquiries that are completed in shorter timescales 48. Proper assessment of transfer pricing risk by the tax administration requires access to a sufficient amount of the right kind of information to support an appropriate evaluation of the risks involved. While there are many sources of such information, transfer pricing documentation can be one critical source of the right kind of information. 49. Individual countries have developed a variety of different approaches and tools for identifying and evaluating transfer pricing risks with regard to specific taxpayers and transactions. The information developed through these means may be utilized for case selection purposes, allowing tax administrations to allocate resources to those taxpayers which raise most concern, when certain factors are identified that might indicate that there is a significant amount of transfer pricing risk. 14 In connection with the Global Forum on Transfer Pricing, the OECD is in the process of assembling individual country experiences and designing a Risk Assessment Handbook to assist countries with this process with a particular focus on risk assessment in developing countries. Different countries use differing means to obtain from the taxpayer the information required for an effective risk assessment process, including the following: Transfer pricing forms (to be filed with the annual tax return) Some tax administrations require companies to supplement the tax return by completing a form that provides additional information on transfer pricing. Generally, most countries will require taxpayers to report whether they have entered into cross-border controlled transactions, and if so, they must provide certain additional information such as identity of the foreign related parties, the amounts of the transactions, pricing methodology applied and whether the taxpayer has produced contemporaneous transfer pricing documentation to support transfer prices (e.g. Australia, Norway). Others, however, request very detailed information that may go beyond the level of detail required for risk assessment (e.g. Argentina and China). For a more complete list and insight to the content of individual countries transfer pricing forms, please see Annex 2. Transfer pricing questionnaires 13 Id. Some countries use targeted transfer pricing questionnaires. In most cases, the completion of these is mandatory and it can be done in the framework of: a) the risk assessment of a specific taxpayer, and so the transfer pricing questionnaire is requested after an initial review of the taxpayer s tax return and account by the tax administration (e.g. South Africa, New Zealand); or, b) a general compliance program or initiative which targets certain groups of taxpayers (e.g. taxpayers operating in certain industries, such as the extractive or automobile industries) and focused on particular areas of risk (e.g. 14 For instance, the United Kingdom and Australia have publicly released their risk assessment and case selection approaches, which provides business with an insight of tax administrations areas of concern and allow them to plan how to best allocate their own resources for tax compliance purposes. See HMRC International Manual, Section INTM et seq. Transfer Pricing: Risk Assessment, available at Also, see the ATO publication Large business and tax compliance (2010) available at Business has reported that they would find it beneficial if tax administrations shared their risk assessments before committing themselves to an in depth audit of all the issues they have identified. Some tax administrations already do this. Business would welcome the systematic sharing of transfer pricing risk assessments, even in cases that are not selected for audit, as this would help them to allocate their own resources to the areas of most concern. See OECD, Dealing Effectively with the Challenges of Transfer Pricing (2012), pages

155 financing or business restructurings) as a means for selecting taxpayers for audits and/or to facilitate actual field audits. For instance, Australia issued in 2010 over 150 questionnaires to multinational companies focusing on transfer pricing risks associated with business restructurings, profitability, financing and services in the mining industry. Ad hoc questionnaires are also central to New Zealand s Inland Revenue compliance programmes. In addition, New Zealand s Inland Revenue encourages taxpayers to use the three standard questionnaires developed (foreign-owned MNEs, New Zealandowned MNEs and branches) as an effective self-assessment tool to scope their exposure to transfer pricing related risks. 15 Cooperative approaches with tax authorities A number of countries have introduced mechanisms to engage taxpayers in a dialogue with the tax administration to enhance compliance and provide greater certainty. This can be achieved by (jointly) identifying and discussing at an early stage difficult transfer pricing issues, in a transparent way, without delay and when the relevant information and business personnel are more easily accessed. Enhanced engagement relationships also provide MNEs with the opportunity to explain to tax authorities their systems, any aspects of the risk assessment that were based on partial information, or a misunderstanding of the commercial context in which the transactions in question took place and demonstrate that their risks are well managed. Australia 16, the Netherlands 17, the United Kingdom 18 and the United States 19 are some of the countries that have in place such systems. General transfer pricing documentation requirements 15 A description of New Zealand s transfer pricing compliance programme and the three standard questionnaires for transfer pricing issues can be found in Annex The Australian Tax Office has published the following reports: ATO risk assessment, ATO Large business and tax compliance and Self assessment risk product for small and medium-sized enterprises and large business taxpayers who require a level of assurance as to the ATO view of their transfer pricing risk. ATO risk assessment is available to taxpayers wishing to obtain some degree of assurance from the ATO as to its views on their transfer pricing risk particularly on a specific dealing or dealings having a limited life. Self assessment risk product is for taxpayers with less complex transfer pricing arrangements and lower levels of related party dealings and allows such taxpayers to evaluate their own level of transfer pricing risk. 17 In 2008, the Dutch Tax and Customs Administration introduced a horizontal monitoring approach, based on mutual trust, understanding and transparency between the tax administration and the taxpayer. The horizontal monitoring approach provides the possibility of concluding enforcement covenants between the tax administration and very large businesses. The benefits of this initiative are a here-and-now work approach, the openness from both sides and a reduction of tax uncertainties for businesses. For additional information, please see the publications by the Netherlands Tax and Customs Administration, both publicly available: Tax Control Framework. From a focus on risks to being in control: a different approach and Thinking differently, behaving differently and working differently. Tax Control Framework. 18 In the United Kingdom, the HMRC manual states that HMRC will seek to work transfer pricing issues in real-time as it provides earlier certainty for taxpayers and allows tax administration to examine the issues when information and relevant business personnel are more easily accessed. The manual indicates that real time working may reduce the time taken to review an issue, and discussions with a taxpayer often arise in advance of a return being made at the initiative of the taxpayer or as a result of HMRC s risk management approach. 19 In the United States, the Internal Revenue Service has the Compliance Assurance Process (CAP) which is structured to conduct real-time compliance reviews to establish the correct tax treatment of tax return positions prior to a taxpayer filing its tax return. These enhanced engagement approaches in transfer pricing risk assessment will be discussed in the paper and, along with any good practices or practical experiences, can be shared among tax administrations. 15

156 Finally, as discussed above, an increasing number of countries have introduced transfer pricing documentation rules that require all taxpayers engaging in cross-border transactions with related persons to provide information and supporting evidence to demonstrate that the conditions in a crossborder controlled transaction satisfy the arm s length principle. 20 Where such documentation is provided, it can also form a basic starting point for transfer pricing risk assessment. For instance, the EUTPD expressly states that transfer pricing documentation should contain enough details to allow the tax administration to make a risk assessment for case selection purposes or at the beginning of a tax audit Vocabulary can create confusion in this context. Some would describe special transfer pricing forms filed with the tax return and special transfer pricing questionnaires as being part of the transfer pricing documentation. Others would reserve the word documentation for more specific application to the taxpayer s description of its transfer pricing methods and its comparability analysis. Moreover, many (although not all) countries approach transfer pricing risk assessment in a staged fashion, and desire to have more detailed or more specific information at each stage of the evaluation. What is clear, however, is that each of the mechanisms described above appears to respond to the same fundamental observation: there is a need for the tax authority to have ready access to sufficient information at the early stages of an audit to conduct an accurate and informed transfer pricing risk assessment. Assuring that such a risk assessment can be carried out efficiently and with the right kinds of reliable information should be one important consideration in designing transfer pricing documentation rules. B. Taxpayer s assessment of its compliance with the arm s length principle 51. At the time the United States first adopted transfer pricing documentation rules, one concern of the tax administration had to do with the desire to have taxpayers adopt considered transfer pricing positions when completing tax returns. There was a concern that, in some instances, taxpayers would put reasonably aggressive numbers on tax returns, wait for a government challenge, and then develop a theory after the fact to rebut the government challenge and support a more favourable position. US rules related to burden of proof, which required taxpayers to demonstrate that the government position was arbitrary and capricious in order to overturn it, compounded the problem and gave rise to strategies designed to limit government access to relevant information during audits so that government positions could more easily be made to appear arbitrary and capricious. Transfer pricing documentation was thought to have the potential of breaking such patterns of behaviour by requiring the taxpayer to adopt a transfer pricing method based on a thorough functional analysis, and to demonstrate through its transfer pricing documentation that it had taken reasonable steps to comply with the arm s length principle when filing its tax return, in order to avoid penalties. 52. By requiring taxpayers to articulate solid, consistent and cogent transfer pricing positions, transfer pricing documentation can help to ensure that a culture of compliance is created. Extremely aggressive positions can often readily be identified by reviewing the documentation. Well-prepared documentation will give tax authorities some assurance that the taxpayer has analysed the positions they report on tax returns, the available comparable company data, and has reached defensible transfer pricing positions. Moreover, contemporaneous documentation requirements can restrain taxpayers from developing only after the fact justifications for their positions. 53. This objective of mindful compliance is backstopped in many countries in two important ways. First, countries often require that the documentation requirement be satisfied on a contemporaneous basis. That is, the transfer pricing documentation, and the thinking that underlies that documentation, is required 20 Some countries exempt small taxpayers and small transactions from their general documentation requirements. 21 See EUTPD, Section 1, paragraph 1. 16

157 to take place at the time of the transaction, or in any event, prior to filing the tax return for the year. While some countries follow policies allowing documentation to be prepared any time prior to the commencement of an audit, most follow some form of requirement designed to force taxpayers to evaluate their compliance with transfer pricing rules annually, before or at the time of completing and filing their tax return. 54. Second, many countries have constructed transfer pricing penalty regimes in a manner intended to reward timely preparation of transfer pricing documentation and to create monetary incentives for timely careful consideration of the taxpayer s transfer pricing positions. For example, in the United States, penalties otherwise imposed in connection with large transfer pricing adjustments will be abated if the taxpayer contemporaneously prepares and timely provides to the tax authorities adequate and reasonable documentation of its transfer pricing positions 55. While the objective of creating a culture of mindful compliance with the arm s length principle is laudable, tax authorities and taxpayers report that the preparation of documentation can sometimes become a process driven primarily by penalty avoidance and minimum compliance rather than by a desire to provide a thoughtful defence of well thought out transfer pricing policies, supported by the best available factual and financial data. Some country tax administrators report that documentation studies, particularly when prepared by consultants, or when prepared using commercial software, often have a canned or formulaic feel. Such studies sometimes appear to tax administrators to represent a cut and paste stringing together of previously drafted language from the memory of a word processing program, rather than representing a careful analysis of the real operations of a real MNE group and the transfer pricing consequences of those operations. Consultants report that because of cost considerations they sometimes do not have full access to the facts necessary for a thorough functional analysis. Individuals working in large volume documentation shops are all too familiar with mass s from colleagues near documentation deadlines urgently requesting a comparable set in the x industry supporting a y percent return on sales. And companies report that the costs and time involved with compliance with proliferating demands for documentation often make it physically impossible to satisfy all of the global requirements related to transfer pricing documentation at even a superficial level of detail. 56. Thus, while in theory taxpayers could use transfer pricing documentation as an opportunity to articulate a well thought out defence of their transfer pricing policies, thereby meeting an important objective of such requirements, costs, time constraints, and competing demands for the attention of relevant personnel can undermine these objectives. While it is desirable that documentation have as one of its objectives the encouragement of a culture of thoughtful compliance, the pragmatics of everexpanding demands from tax authorities may undermine that objective and contribute to a culture of minimal effort and commoditised economic analysis directed purely at penalty protection. C. Provision of information necessary to start, conduct and complete an audit 57. A third purpose for transfer pricing documentation is to provide tax authorities with the information they need to conduct a thorough transfer pricing audit. Transfer pricing cases under examination or audit tend to be fact-intensive. They often involve difficult evaluations of the comparability of several transactions and markets. They can require detailed consideration of financial, factual and other industry information. The availability of adequate information from a variety of sources is critical to facilitating a tax administration s orderly examination of the taxpayer s controlled transactions with associated enterprises and enforcement of the applicable transfer pricing rules. 58. Generally, most of the relevant information required for a transfer pricing audit must come from the taxpayer itself. Governments often express the view that the taxpayer s control of relevant information provides it with a significant advantage in a transfer pricing audit. A review of country legislation and 17

158 regulations on transfer pricing documentation could easily lead one to believe that country documentation rules in many jurisdictions primarily pursue an objective of levelling the audit playing field by assuring that all documents and information necessary for a full transfer pricing audit are readily available to the tax administration at the time the tax return is filed or the audit commences. 59. In some countries, transfer pricing documentation legislation provides either the exclusive or the primary legal authority permitting governments to compel submission of the information needed to perform a transfer pricing audit. 60. In situations where a proper risk assessment suggests that a thorough transfer pricing audit is warranted, it is clearly the case that the tax administration must have the ability to obtain, within a reasonable period, all of the relevant documents and information in the taxpayer s possession. This includes information regarding the taxpayer s operations and functions, information regarding potential comparables, including internal comparables, and documents regarding the operations and financial results of potentially comparable uncontrolled transactions and unrelated parties. To the extent such information is included in the transfer pricing documentation, special information and document production procedures can potentially be avoided. It must be recognised, however, that regardless of how comprehensive transfer pricing documentation requirements may be, situations will inevitably arise when tax authorities wish to obtain information not included in the documentation package. Thus, country legislation should always include powers and processes that will allow the tax authority to obtain information from the taxpayer beyond what is included in the information relied on in a risk assessment at the beginning of the audit. The time of preparation of various elements of necessary documentation will be an issue necessarily considered in designing a documentation system that meets government needs for information without imposing unnecessary compliance burdens on taxpayers. 61. It may often be the case that the required documents will be in the possession of members of the MNE group other than the local affiliate under examination. Often the necessary documents will be located outside the country whose tax administration is conducting the audit. It is therefore essential that the tax administration s power to compel production of information during the course of an audit extend beyond the country s borders. 62. An additional issue that individual countries will need to consider in devising documentation and other document production rules relates to the burden of proof with respect to transfer pricing adjustments. Country practice varies with regard to this issue. In some countries, governments must bear the burden of demonstrating that the taxpayer s reported transfer pricing arrangements are inconsistent with the arm s length principle and local transfer pricing rules. In other countries, government adjustments will be sustained unless they are clearly arbitrary. In still other situations taxpayers will bear the burden of demonstrating that their transfer pricing arrangements conform to the requirements of the country s transfer pricing rules. 22 The nature of local law requirements regarding burden of proof may influence the amount and nature of information that a government believes it needs to obtain in a transfer pricing documentation package or later in the course of a transfer pricing audit. D. Conclusions regarding the purposes of transfer pricing documentation 63. At least three different reasons for requiring taxpayers to provide transfer pricing documentation can be identified. Each of these purposes is valid in its own way and each should be considered in designing appropriate transfer pricing documentation requirements. 22 See OECD TPG, paragraph

159 64. The OECD believes that it is important that governments be able to access the information they need to conduct a risk assessment enabling an informed decision to perform an audit and that the government also be able to access, on a timely basis, additional information necessary to conduct a comprehensive audit once the decision to conduct such an audit is made. It is also important that taxpayers be required to carefully evaluate at or before the time of filing a tax return their own compliance with the applicable transfer pricing rules. Documentation rules should be designed in such a way that they support each of these objectives without undermining the others. 65. A relevant question, therefore, is whether documentation rules can be tailored to the staged information needs of the transfer pricing audit process. Would it be possible, for example, to focus initial compliance efforts on the information necessary for risk assessment, while preserving the ability of the tax administration to get the information it needs when it conducts an audit? Moreover, if initial document demands were to be simplified and focused on risk assessment, what would the consequences be for the meaningful self-assessment that documentation was originally intended to encourage? Improving the documentation process is dependent on properly weighing these competing considerations. 66. Care must be taken that efforts to simplify early stage compliance burdens on taxpayers do not limit government access to relevant information later when a full audit is deemed to be necessary. It should be recognised that in some countries, a narrower focus on risk assessment at an early stage would require other changes to information gathering powers to be sure additional relevant information can be obtained in the event the tax administration decides to conduct a full transfer pricing audit. 67. The considerations discussed above regarding the appropriate reasons for requiring transfer pricing documentation have guided the suggestions set out below. IV. A Tiered Approach to Transfer Pricing Documentation 68. This section of the paper describes in general terms the structure and requirements of possible documentation rules that would initially focus on higher level information that would be most helpful in assisting governments in undertaking a transfer pricing risk analysis and in confirming taxpayers good faith efforts to comply with the arm s length principle. Some of the identified information is typical of the demands of many existing local country transfer pricing documentation rules. Other identified information is less typical of existing individual country rules and is intended to help provide a relatively clear big picture overview of the transfer pricing policies and practices of an MNE group. Additional information submission rules would then focus on more detailed information most helpful in conducting audits. A. Information Required for a Transfer Pricing Risk Assessment 69. In its January 2012 publication entitled Dealing Effectively with the Challenges of Transfer Pricing the OECD Forum on Tax Administration identified nine features that may indicate the presence of significant transfer pricing risk. These include: Significant transactions with, and income allocated to, related parties in low tax jurisdictions; Transfers of intangibles to related parties; Business restructurings; The existence of specific types of related party payments that have the potential to erode the tax base, including payments of interest, insurance premiums and royalties; Year on year loss making; 19

160 Poor or non-existent documentation of related party transactions and their results; Excessive debt. 70. Accordingly, it would be appropriate to focus documentation requirements on obtaining clear information that would permit the tax authority to identify whether the foregoing risk factors are present. In order to permit tax authorities to quickly develop a clear understanding of these features of the transfer pricing practices of a company, documentation would need to focus on the following types of information: Identification of material cross border transactions between associated enterprises, including material payments for goods, services, intangibles, and interest flows. Identification of recent business restructuring transactions and transfers of intangibles. Information regarding the levels of corporate debt and interest expense in relevant countries. Information regarding the MNE s global transfer pricing policies and the financial results of applying those transfer pricing policies. It would especially include a description of where in the group important intangibles are held. It would also include the identification of the MNE Group s existing APA and ruling arrangements related to income allocation with various countries. The taxpayer s explanation of how its material transfer pricing arrangements comply with the arm s length principle and local transfer pricing rules. 71. It is worth noting that clear and accurate understanding of the risk features described above will often require more information of a big picture nature than is often obtained through existing individual country focused documentation requirements. Transfer pricing risk often arises in situations where taxpayers seek to shift income from jurisdictions where that income will be relatively heavily taxed to those where it will be subjected to lower levels of tax or will be altogether free from tax. While traditional documentation requirements focus to a great extent on local country entities and their functional and financial dealings, accurate risk analysis requires a broader view. 72. It seems possible for businesses to provide without undue burden individual country data based on either management accounts, consolidating income statements and balance sheets, and/or tax returns that would provide tax administrators with a general sense as to how their global income is allocated and where pressure points in the transfer pricing arrangements might lie. Such information would likely not be a sufficient basis for a detailed transfer pricing analysis of individual transactions and prices, nor would it provide a substitute for a full functional analysis. However, in a risk assessment setting, an observation that, for example, a company based in a high tax country that reports 85 percent of its income in low-tax jurisdictions while maintaining 80 percent of its employees and assets in high tax jurisdictions may warrant more tax administration attention to transfer pricing than one where shares of assets, employment and income are more consistent across countries. As long as all involved in preparing and reviewing such data understand that risk assessment is a first step and that precision may not be necessary, greater overall reporting might productively be required for risk assessment purposes. 73. It is important that the heart of transfer pricing documentation continue to be the taxpayer s description of the transfer pricing methods and analysis it uses to demonstrate its compliance with the arm s length principle. These should be built on a robust comparability analysis, analysing the functions, assets and risks relevant to the transfer pricing analysis for transactions that are material in the context of the jurisdiction receiving and reviewing the documentation package. 20

161 B. Structure of a Global Documentation Package 74. The two-tier structure laid out in the EU documentation guidance has significant potential for simplifying transfer pricing documentation compliance. Information relevant to all countries could be assembled one time on an MNE wide basis and be supplied to any country requesting documentation. Such information would include the overall business descriptions and functional analysis, and required information regarding consolidated group income, tax rates and debt structure. It could also include descriptions of recent business restructurings and transfers of intangibles. The global masterfile would not, however, include specific transfer pricing analyses related to individual transactions, which could be reserved to local country documentation. 75. Assuming local countries are given a copy of the MNE s masterfile, additional information filed in the local country could be limited to the specific identification of material cross border transactions affecting the local jurisdiction, the detailed functional analysis of the business activities in the local entity, and the taxpayers analysis and application of the most appropriate transfer pricing methodology to the described facts, including its identification of the most relevant data regarding comparables. Relevant financial data for local entities could also be supplied locally. 76. Comments of business regarding the usefulness of the masterfile in a business where more than one line of business is pursued should be kept in mind. A coordinated documentation system would have sufficient flexibility to allow the taxpayer to supply masterfile information either on a company wide basis or by line of business, depending on which would provide the most relevant transfer pricing information to tax authorities. C. Mechanics of Preparing Transfer Pricing Documentation 77. Some purely mechanical issues exist that make the process of preparing transfer pricing documentation more difficult than it needs to be for compliant businesses. Following is a summary of some of these mechanical issues and potential approaches that could have an impact on the compliance burden. Certification of documentation by an outside auditor: Some countries require that the information in a transfer pricing documentation study be certified by an outside auditor or other third party. Such a requirement may be excessive, particularly at the stage of risk assessment. Mandatory use of consulting firms to prepare documentation: In some countries, tax administrations do not accept documentation prepared by internal company employees. Provided the personnel preparing the documentation are qualified and have access to the appropriate data, there is no reason to believe that documentation prepared by consultants is more reliable than that prepared by company employees themselves. Use of local or regional comparables: Businesses suggest that permitting the use of a standard set of regional comparables in documentation prepared for countries in the same geographic region would provide substantial simplification. While the simplification benefits of limiting the number of comparable searches a company is required to undertake are obvious, the use of regional comparables in situations where appropriate local comparables are available will not, in some situations, comport with the obligation to rely on the most reliable comparable information. A desire for simplifying compliance processes should not go so far as to undermine compliance with the requirement to use the most reliable available information. 21

162 Translation: The necessity to provide documentation in local language is sometimes noted as one of the complicating factors with respect to transfer pricing compliance. While it would be convenient if all tax inspectors around the world spoke the same language, it is not practical to make such an assumption. Documentation should be useful to local country tax administrations seeking to undertake a risk assessment, and therefore at least the local documentation package should likely be translated. Where administrations believe that translation of the global masterfile is necessary, they should make specific requests for translation and provide sufficient time at the beginning of an audit to make such translation as comfortable a burden as possible. Materiality standards: Not all transactions are sufficiently material to require full documentation. Country documentation practices should reflect materiality thresholds. However, it should be recognised that such thresholds should be established taking into account the size and nature of the local economy, the importance of the MNE in that economy, and the size and nature of local operating entities, as well as the overall size and nature of the MNE group. V. Development of a Coordinated Approach to Documentation 78. In an attempt to move towards a simpler and more efficient compliance with transfer pricing documentation rules, this paper sets out a possible coordinated approach to transfer pricing documentation ( Coordinated Documentation Approach ). This approach follows a two-tier structure consisting of a masterfile and a local file. 79. As conceived, the Coordinated Documentation Approach is intended to serve the purposes for documentation discussed earlier in the paper. First, it ought to provide to tax authorities sufficient, relevant and reliable information to perform an efficient and robust risk assessment analysis. Second, it should provide a platform on which the information necessary for an audit can be developed. Third it should provide taxpayers with a means and incentive to meaningfully consider and describe their compliance with arm s length pricing in material transactions. 80. The masterfile portion of the documentation would seek to elicit a reasonably complete picture of the global business, financial reporting, debt structure and tax situation of the MNE to enable tax authorities to identify the presence of significant transfer pricing risks. In particular, the information requested in the masterfile can be grouped in five categories: a) information on the MNE group; b) description of the MNE s business or businesses; c) information on the MNE s intangibles; d) information on the MNE s intercompany financial activities; e) information on the MNE s financial and tax positions. 81. The information solicited under the local file would supplement the masterfile and help meet the objective of assuring that the taxpayer has complied with the arm s length principle in its material transfer pricing positions. It focuses on specific transfer pricing analyses related to material transactions taking place between a local country affiliate and associated enterprises in different countries. This would include relevant financial information regarding those specific transactions, a comparability analysis and application of the most appropriate transfer pricing method. 82. Tables 1 and 2 in the following pages set out in detail the items of information to be included in the masterfile and the local file. 22

163 Table 1: Coordinated Documentation Approach Masterfile Overview of Multinational Enterprise Group (MNE): Chart illustrating the MNE s legal and ownership structure and geographical location of principal operating entities. Management structure and geographical location of key management personnel. Description of MNE s business(es) For each MNE s major business line: General written description of the MNE s business including: Important drivers of business profit Chart showing supply chain for material products and services. Chart showing important related party service arrangements other than R&D services. A list of the main markets for material products and services. Key competitors. A written functional analysis showing the principal contributions to value creation by individual entities within the group. A description of important business restructuring transactions occurring during the last 5 years. Internet links to representative analyses of the industry and company prepared by rating agencies, stock analysts, or others familiar with the business. MNE s intangibles A description of the MNE s strategy for the development, ownership and exploitation of intangibles, including location of principal R&D facilities and location of R&D management. A list of material intangibles or groups of intangibles of the MNE group and details as to which companies are entitled to returns from relevant intangibles. A list of important related party agreements related to intangibles, including cost contribution arrangements, principal research service agreements and important license agreements. A description of the group s transfer pricing policies related to R&D and intangibles. A description of any material transfers of interests in intangibles during the relevant year, including the entities, geographies, and compensation involved. 23

164 Table 1: Coordinated Documentation Approach Masterfile MNE s intercompany financial activities A description of material intercompany loans and other financial arrangements (e.g. loans, hybrid financial instruments, performance guarantees, financial guarantees and similar transactions) including: Related parties involved (directly or indirectly) and geographic location Principal amounts involved in the arrangement. The MNE's inter-company transfer pricing policy or a description of the group's transfer pricing system for its financial activities. MNE s financial and tax positions MNE s consolidated accounts for the prior (x) years. A list and brief description of the MNE group s applicable unilateral or bilateral/multilateral APAs. A list and brief description of other relevant tax rulings related to the allocation of income to particular jurisdictions. A list and brief description of transfer pricing matters pending under treaty MAP processes or resolved in MAP during the last two years. A schedule showing for each country in which the MNE does business the total number of employees in the country. A copy of the company s consolidating income statement for the most recent year. 24

165 Local entity Table 2: Coordinated Documentation Approach Local file A description of the management structure of the local entity, to whom local management reports and the geographical location of senior executives. An indication whether the local entity has been involved or affected by business restructurings or intangibles transfers in the present or immediately past year and explain aspects of such transactions affecting the local entity. Controlled transactions For each material controlled transaction in which the taxpayer is involved, provide the following information: Description of the controlled transactions (e.g. manufacture, distribution of goods, provision of services) and context in which it takes place (e.g. business activity, financial activities of the MNE group, cost contribution arrangement). Aggregate amount of intercompany charges for each category of transactions. Identification of associated parties involved in each category of controlled transactions, and the relationship amongst them. A detailed functional analysis of the taxpayer with respect to each documented category of controlled transactions, i.e. functions performed, assets used (including intangibles) and risks borne, including any changes compared to prior years. Identification and description of other controlled transactions of the taxpayer that can directly or indirectly affect the pricing of the controlled transaction being documented. Indicate the most appropriate transfer pricing method with regard to the category of transaction and the reasons for selecting that method. Indicate which associated enterprise is selected as the tested party and explain why. Indicate the important assumptions made in applying the transfer pricing methodology. If relevant, explain the reasons for performing a multi-year analysis. List and description of selected comparable uncontrolled transactions (internal or external), if any, and information on relevant financial indicators for unrelated parties relied on in the transfer pricing analysis, including a description of the comparable search methodology. Describe any comparability adjustments performed, and indicate whether these have been done to the tested party, the comparable uncontrolled transactions, or both. Describe the reasons for concluding that relevant transactions were conducted on an arm s length basis based on the application of the selected transfer pricing method. A summary of financial information used in applying the transfer pricing methodology. Financial information Annual local entity financial accounts for the previous (x) years, audited if they exist. Information and allocation schedules showing how the financial data used in applying the transfer pricing method may be tied to the annual financial statements. Summary schedules of relevant financial data for comparables used in the analysis. 25

166 83. The OECD believes that this proposal for the content of documentation offers a balanced tradeoff between greater transparency requested from MNE and more streamlined country transfer pricing documentation requirements. This approach has significant advantages to both tax authorities and taxpayers. A number of details related to the proposal remain to be worked out, however. These include at least the following: Timing issues remain to be resolved. An appropriate question is which elements of the documentation packages should be provided at the time the tax return is filed such that they would be available for risk assessment purposes, and which might be deferred until after the decision is made to conduct a more detailed audit. Materiality standards are important, particularly with regard to the information contained in the local documentation package. Not every intercompany transfer requires the same level of documentation. However, materiality can depend to some extent on the specific country and the specific taxpayer. The creation of the proper incentives for complying with transfer pricing documentation can be a crucial factor. Country practices with regard to transfer pricing related penalties vary widely. The existence of different local country penalty regimes may influence the quality of taxpayers compliance. There may be some opportunity to make country practices more consistent so that taxpayers are not driven to favour one country over another in their compliance practices. An important question relates to the instruments and procedures that could be used to create greater uniformity in documentation practices. It is clear that one issue raising difficulty for business involves the differences in forms and practices among countries. Documentation rules are local country rules by their nature. One option for enhancing uniformity is for the OECD to modify its Transfer Pricing Guidelines on a non-binding basis. However, other practical steps might be possible including the publication of model legislation on documentation, adoption of international agreements, or other implementing tools. 84. This paper is not intended to provide all of the answers, but rather to begin a conversation among countries and affected taxpayers regarding ways to improve the documentation environment. The OECD welcomes written comments of interested persons on the proposals contained in this paper and on the issues outlined in the preceding paragraph. 26

167 ANNEX 1: MULTI-COUNTRY SURVEY ON TRANSFER PRICING DOCUMENTATION REQUIREMENTS EUTPD Masterfile EUTPD Country file PATA Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa Switzerland Turkey United Kingdom United States Vietnam TP documentation No statutory obligation for TP documentation n/a n/a n/a x x23 x x x? Statutory obligation for TP documentation n/a n/a n/a x x x x x x x x x x x x x x x x x x x Broad-based analysis of MNE group and taxpayer Legal and organisational structure of the group x x x 24 x x 25 x x x x x x x x x x x x x x Business and business strategy of the group (including changes compared to previous years) x x x x x x x Operational structure of the group x x x x x x x Description of any changes in the business in current or past years x x x x Economic circumstances and market analysis x x x x x x x x x x 23 Chile: According to Article 41 E of the Chilean Income Tax Law taxpayers carrying out operations with related parties abroad shall submit annually to the Internal Revenue Service a sworn statement regarding such operations, according to the information and format established by the Internal Revenue Service. Likewise, the Internal Revenue Service may request taxpayers to provide information regarding their related parties abroad. 24 Argentina: The Argentinean legislation requires that detailed information (e.g. name, place of residence, tax identification number and supporting information on the ownership relationship, stockholders and ownership percentage, place of residence of the stockholders, information on the CEO, a description of the activities performed by each group member, list of group members authorized to trade in stock exchange markets, written agreements regarding transfer of shares, capital increases and capital reductions, mergers and acquisitions, amongst other information requested) be provided for all enterprises associated to the Argentinean taxpayer, regardless of whether they entered into a controlled transaction. Argentinean legislation also requires the taxpayer to declare whether any of the members of the group has been subject to a primary transfer pricing adjustment in the last three years as well as whether any of the group members is undergoing a tax audit of their transfer prices. 25 China: The Chinese legislation requires that, in addition to the general information on the group members (such as names, legal representative, senior management, the registered addresses of associated enterprises and the actual operation places), the taxpayer provides information on each associated enterprises applicable type of tax, tax rates and possible tax incentives. 27

168 EUTPD Masterfile EUTPD Country file PATA Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa Switzerland Analysis of taxpayer and controlled transactions Turkey United Kingdom United States Vietnam Business and business strategy of the taxpayer (including changes compared to previous years) x x x x x x x x x x x x x x x x x x Identification and description of controlled transactions x 26 x x x x x x x x x x x x x x x x x x x x x Identification and information on foreign associated enterprises engaged in controlled transactions with taxpayer; relationship with taxpayer at the time of transaction Identification and description of other associated enterprises or controlled transactions that can affect directly or indirectly the pricing of the taxpayer s controlled transaction Intangible property relevant for controlled transactions purposes Overall transfer pricing policy of the group and implementation at company level x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x TP methods Explanation of selection of the most appropriate transfer pricing method x x x x x x x x x x x x x x x 27 x x x x x x Reasons for rejection of other pricing methodologies x x x x x 26 EUTPD: Identification of the controlled transactions involving associated enterprises in the EU only. 27 New Zealand: The New Zealand Inland Revenue requests the use of cross-checks for highly uncertain transactions (e.g. intangibles). If one methodology produces a result that is significantly different to another, an explanation regarding the difference is requested. For instance, for purposes of the analysis of IP, a cross check and an explanation of the relativities are requested for: a) CUP; b) split of channel profits; c) overall profit (TNMM); and, d) relative return on goodwill and sold IP over reported accounting assets 28

169 EUTPD Masterfile EUTPD Country file PATA Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa Switzerland Turkey United Kingdom Comparability analysis and selection of comparables United States Vietnam Characteristics of property and services x x x x x x x x x x x x x x x x x x x x Functional analysis (functions, risks and assets) x x x x x x x x x x x x x 28 x x x x x x x x Contractual terms x x x x x x x x x x x x x x x x x x x x Economic and market conditions circumstances x x x x x x x x x x x x x x x x x x x x Business strategies x x x x x x x x x x x x x x x Aggregation of transactions analysis and/or details of each transaction aggregated Reasons for multiple-year analysis x x Identification, analysis and selection of internal comparables Identification, analysis and selection of external comparables Financial information (e.g. profitability) of selected comparables x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x Comparability adjustments and justification x x x x x x x x x x x x x x x x Determination TP and adjustments Determination of transfer price (e.g. process, calculation tables, assumptions) Document outcomes of arm s length range and selection of the point in the range x x x x x x x x x x x x x x x x x x x x x x x x x Evidence of price negotiation position x x x x 28 Malaysia: A functional analysis is required of all associated enterprises with which the taxpayer has transacted or other group companies to the extent that they affect or are affected by the controlled transaction carried out by the taxpayer. 29

170 EUTPD Masterfile EUTPD Country file PATA Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Financial & accounting data Singapore South Africa Switzerland Turkey United Kingdom United States Vietnam Financial and/or accounting statements of current year and past years (segmented or consolidated) Financial and/or accounting relevant information of current and/or past years x x x x x x x x x x x x x x x x x x x x x Budgets, business plans and financial projections x x x x x x Country-by-country sales Country-by-country operating income Country-by-country tax paid Information on the foreign related-party TP documentation and tax reporting of controlled transaction in other country Advanced rulings or APAs obtained with foreign tax authorities Financial and accounting statements of current year/year under review (segmented or company-wide) Financial and accounting data of previous years (segmented or company-wide) x 29 x x x 30 x x 31 x x 32 x x x 33 x x x 34 x x x 29 Israel: If there is a difference in the reporting in the foreign country and in Israel, explanation of such difference. 30 Malaysia: APAs entered into by members of the group with respect to transactions to which the taxpayer is a party. 31 Argentina: Only when needed, based on the transfer pricing methodology used. 32 Ghana: This information item requires the consolidated financial statements of the group to be submitted. 33 Malaysia: The taxpayer is required to submit the group s financial report (i.e. annual report) 34 Argentina: Only when needed, based on the transfer pricing methodology used. 30

171 EUTPD Masterfile EUTPD Country file PATA Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa Switzerland Turkey United Kingdom United States Vietnam Other x 35 Specific documentation requirements Transactions involving intangible property x x Transactions involving centralised intra-group services x x x CCAs/CSAs x x x x Copies of inter-company agreements x x x x x x x x x 36 x x x x x Other information Tax audits or disputes (of any of the associated enterprises) x List of CCAs/CSAs x x List of APA/rulings obtained by taxpayer x x x Information which could affect TP obtained between end of tax year and filing of the tax return x x x Accounting standards applied by associated enterprises x x x Background documentation supporting 37 x x x x x x x x x x 38 x x x x 35 Argentina: Information on whether the foreign associated enterprises involved in controlled transactions with the taxpayer are subject to a transfer pricing regimes and, if so, if they have any undergoing transfer pricing dispute with the tax administration or at judicial level (and status). 36 Malaysia: Including all commercial agreements with third parties. 37 Including assumptions, strategies, policies and material factors that could affect prices or profits in arm s length controlled transactions. Also, information on how property was dealt with in subsequent transactions or dealings (Canada). Official publications, reports, studies and databases; reports on market research and technical publication by recognized institutions; and supporting documents for the economically significant activities and functions of the taxpayer (Malaysia). 38 New Zealand: The New Zealand Inland Revenue requests documentation on conclusions, including sanity checks to demonstrate commercial realism. 31

172 EUTPD Masterfile EUTPD Country file PATA Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa Switzerland Turkey United Kingdom United States Vietnam Tax authorities can request supplementary information x x x x x? x x x??? x? x??? x x x x? Tax return disclosure information on taxpayer s controlled transactions 39 n/a n/a n/a x x x x x x x x x x x x x x x x x x x x x 39 This information has been sourced from the PwC GDC country matrix (not publicly available). 32

173 Sources of information for Annex 1 Multi-country survey on TP documentation requirements Country/Regional organisation Source of information Available at European Union Joint Transfer Pricing Forum Pacific Association of Tax Administrations Code of conduct on transfer pricing documentation for associated enterprises in the European Union Transfer pricing documentation package Argentina Transfer Pricing Country Profile: Argentina Australia Brazil General regulation AFIP 1122/2001, Annex IV Taxation Ruling 98/11 Income tax: documentation and practical issues associated with setting and reviewing transfer pricing in international dealings IBFD, Transfer Pricing Chapter: Brazil Canada International Tax Act, Subsection 247(4) Transfer Pricing Memorandum 05 Contemporaneous documentation Chile Income Tax Law, article 41E China IBFD, Transfer Pricing Chapter: China Colombia Colombian Tax Code, articles to Decree 4349 of 2004, article 7 Transfer Pricing Country Profile: Colombia Ghana Transfer Pricing Regulations, India OED, Transfer Pricing Country Profile: India Indonesia PER-43/PJ/ Israel Income Tax Regulation no. 5767/2006 (Determination of Market Conditions), article

174 Country/Regional organisation Source of information Available at Japan National Japanese Agency Commissioner s Directive on the Operation of Transfer Pricing (Administrative Guidelines), article Korea PwC International Transfer Pricing 2011 Korea Malaysia Inland Revenue Board Malaysia Mexico OECD Mexican Transfer Pricing Profile New Zealand Norway Singapore New Zealand inland Revenue s Transfer Pricing Documentation site Regulations relating to the Documentation of Price Determination for Controlled Transactions and Transfers Inland Revenue Authority of Singapore, IRAS Circular Transfer Pricing Guidelines, Annex G (23 February 2006) Tax_Guide/etaxguides_IIT_Transfer%20Pricing%20guidelines_ pdf.pdf South Africa SARS, Practice Note No. 7 Switzerland OED, Transfer Pricing Country Profile: Switzerland Turkey IBFD, Transfer Pricing Chapter: Turkey United Kingdom International Tax Manual (INTM ) Part 4 TIOPA 2010: Self-assessment obligations: Record keeping: Transfer pricing documentation United States Treasury Regulations, Vietnam Circular No. 66/2010/TT-BTC Guiding the determination of market prices in business transactions between associated parties 34

175 ANNEX 2: MULTI-COUNTRY SURVEY ON TRANSFER PRICING DISCLOSURE REQUIREMENTS SUBMITTED WITH THE ANNUAL TAX RETURN Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa 40 Switzerland Turkey United Kingdom United States Vietnam TP disclosure requirements Formalities Transfer pricing information is included in the annual tax return (i.e. no separate form) Specific transfer pricing form needs to be filed with the annual tax return The form/information submitted needs to be certified by an external auditor/accountant or through an affidavit N x 41 x N N x N N x x x 42 x x 43 x x N x x x x x x N x N N x N x x x 44 x x x APAS and TP documentation Report existing APAs with the local tax authorities Report existing bilateral APAs Report existing APAs between foreign related party and a foreign tax administration Existence of documentation for related party transactions x x x x x x x General Information on taxpayer s business activity x x x x x x 40 South Africa: IT14 Form requires taxpayers with controlled transactions to submit upon request a copy of the agreements entered into and a copy of the transfer pricing policy document applied to the current year. 41 Kenya: The taxpayer is required to provide information on whether it has related/associated enterprises outside Kenya and, for each, to provide company name and address. 42 Brazil: Export and import transactions with related parties and with no related parties need to be reported in two different forms (29A and 29B). 43 Chile: The submission of a transfer pricing form has been introduced for 2012 onwards. The administrative ruling approving the content of such form was issued on 31 of January 2013 through resolution No. 14 ( The annual statement No should be submitted by taxpayers with transactions with related parties until the last working day of June 44 Argentina: The transfer pricing documentation report (as well as the taxpayer s financial statement), which needs to be provided with the annual return, needs to be certified independent certified public accountant, whose signature must be certified by the professional association of which he or she is a member. 35

176 Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa 40 Switzerland Turkey United Kingdom United States Vietnam information on the existence of controlled transactions Indicate whether there are or not controlled transactions with foreign associated persons Quantification total value and/or number of related party transactions Quantification total value/number (e.g. percentage) of third party transactions x x 45 x x 46 x x x x 47 x x x x x Information on related party transactions with associated parties located in countries other than low tax jurisdictions x x Identification of foreign countries Information on related party transactions with associated parties located in low tax jurisdictions List of all low tax jurisdictions in which taxpayers undertakes related party transactions List of main low tax jurisdictions in which taxpayer undertakes related party transactions x x x x x x x x x x Type of controlled Specify type of transaction involving, for instance: x x x 48 x x x 49 x x x x x x x x x 45 Norway: Form 1123E requests the taxpayer to provide the number of companies and entities with which the taxpayer or entity has conducted controlled transactions in Norway, in EEA countries and in countries outside EEA. 46 Turkey: The form requests the taxpayer to provide a list of associated persons with which the taxpayer has controlled transactions. 47 Malaysia: Part N of Form C requires total amounts for sales, purchases, expenses, loans and other inform from related companies in Malaysia and from related companies outside Malaysia. 48 Brazil: For each type of transaction, Form 29A requires taxpayers to segment the information into: a) transactions with related parties; transactions with residents in preferential tax jurisdictions; and, c) other transactions (within the specific category). 49 China: Taxpayers are required to file specific forms for the sale and purchase of merchandise (form no. 3); labour service form (form no. 4); intangible assets form (form no. 5); fixed assets form (form no. 6); financing form (form no. 7); foreign investment survey form (form no. 8); information form regarding overseas payment (form no. 9) 36

177 Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa 40 Switzerland Turkey United Kingdom United States Vietnam transactions 1. Tangible property x x x x x x x x 50 x x x x x x x x 2. Intangibles property (owned or used) x x x x x x x x x x x x x x x x 3. Intra-group services 51 x x x x x x x x x x x x x x 4. Rent and/or leasing activities x x x x x x x x 5. Financial transactions x x 52 x x x x x x x x x x x x x x 6. Derivatives and global trading x x x x x 7. Other financial dealings (other than the ones listed in 5-6) 8. Acquisition or disposal of capital tangible or intangible property x x x x x x x x x x x x x 9. Cost contribution agreements x x x x 10. Other transactions x x x x x x x 53 Information required on each type of transaction For each specific transaction, information is requested on: 1. Description of the transactions (e.g. type of transactions; volume/units; nature; currency) x x x x x 50 India: Form No. 3CEB distinguishes between controlled transactions involving a) the purchase/sale of raw material, consumables or any other supplies for assembling/processing/manufacturing of goods/articles from/to associated enterprises; b) purchase/sale of traded/finished goods; c) tangible movable/immovable property or lease of such property. 51 Australia: IDS requires the taxpayer to provide the information by type of service: treasury related services; management and administration services; insurance; reinsurance; R&D; sales and marketing services; software and IT services; technical services; logistics; asset management; other services. 52 Australia: IDS requires the taxpayer to provide detailed information on amounts borrowed/loaned, interest, guarantees, insurance, reinsurance, other financial dealings. 53 Norway: Form 1123E requests information on changes in the legal or operation (functions performed, risks assumed, assets employed) structure during the income year being reported. 37

178 Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa 40 Switzerland Turkey United Kingdom United States Vietnam 2. Amount of expense/income or price x x x x x x x x x x x x x x x x x 3. Identification of foreign related parties with which the taxpayer has entered into controlled transactions (including country where it is located) 4. Information on foreign related party s business activity 5. Business activity for the transaction (NACE/SIC code or other) x x x x x x x x x x x 54 x x x x x x x 6. Tested party x x 7. Main pricing methodology x x x x x x x x x 55 x x 56 x x x 8. Profitability indicator used x x x 9. Comparable value used (if only one) x x x x 10. Arm s length price obtained x x x x x x 11. Type of comparability adjustment performed x 12. Self-adjustment x x x x Other information 13. Existence of documentation x Specific information required on non-monetary consideration paid or received from foreign related x x x x 54 United States: For each person, form 5472 requires information on the country of citizenship, organization or incorporation and the countries under whose laws the related party files an income tax return as a resident. 55 Indonesia: In addition to reporting the transfer pricing method used, it also requires the reason for using such method. 56 Korea: In addition to reporting the transfer pricing methods used, it also requires the reason for using such method as well as submission of an official report explaining how the price has been calculated. 38

179 Argentina Australia Brazil Canada Chile China Colombia Ghana India Indonesia Israel Japan Kenya Korea Malaysia Mexico New Zealand Norway Singapore South Africa 40 Switzerland Turkey United Kingdom United States Vietnam required parties Specific information required on employee share based remuneration Specific information required on disclosure of branch operations x x Specific information required on thin capitalisation x Other information required x 57 x 58 x 59 x Chile: Statement No requires provision of information on trading accounts among related parties. 58 Japan: For each associated person with whom the taxpayer carries on controlled transactions, the following information needs to be submitted: number of employees, sales/operating revenues, operating costs, income before taxes, retained earnings. 59 Korea: Under Korean transfer pricing disclosure requirements, the taxpayer has to complete and submit a form containing information on the income statement of foreign related parties. 60 United States: Form 5472 requires under Part VI information on customs values reported for imported goods. 39

180 Sources of information for Annex 2 Multi-country survey on transfer pricing disclosure requirements submitted with the annual tax return Country Form Argentina Form 742 (semi-annual) for related party transactions Australia Form 743 (annual) for related party transactions, available at Form 969 for international transactions with related companies located abroad or in countries of low or no taxation. International Dealings Schedule, available at Brazil Ficha 29A Operações com o exterior pessoa vinculada/interposta pessoa/país com tributação favorecida Ficha 29B Operações com o exterior pessoa não vinculada/ não interposta pessoa/país sem tributação favorecida Ficha 30 - Operações com o exterior Exportações (entrada de divisas) Ficha 31 - Operações com o exterior Contratantes das exportações Ficha 32 - Operações com o exterior Importações (saída de divisas) Ficha 33 - Operações com o exterior Contratantes das Importações All available at %20Ajustado.pdf (pages 57 to 63) Canada China Colombia India Indonesia Israel Japan Information return of non-arm s length transactions with non-residents - T106 Summary form, available at Annual report form for associated business transaction of enterprise Information return for transfer pricing, available in Spanish at Form No. 3CEB Report from an accountant to be furnished under section 92E relating to international transactions, available at Special attachments 3A, 3A-1 and 3A-2 (for related party transactions; and, 3B, 3B-1 and 3B-2 (for transactions with residents of tax haven countries) Form 1385 Declaration on International Transactions Schedule 17(4) Statement on foreign affiliated persons Korea Report on transfer pricing methods Summary of cross border transactions with foreign related parties. Summary of income statements for overseas related parties having cross border transactions with the Korean entity. Malaysia Mexico Norway South Africa Turkey Form C 2012 (part N), available at Form 55 Transactions with foreign related parties, available in Spanish at ftp://ftp2.sat.gob.mx/asistencia_servicio_ftp/publicaciones/ff_2010/forma_55_y_ana.pdf Form RF-1123E Controlled transactions and accounts outstanding IT14 Form Income Tax Return ( International Related ), available at Form related to Transfer Pricing, Controlled Foreign Corporation and Thin Capitalisation 40

181 Country United States Vietnam Form Form 5472 Information return of a 25% foreign-owned US corporation or a foreign corporation engaged in a US trade or business, available at Owned-U.S.-Corporation-or-a-Foreign-Corporation-Engaged-in-a-U.S.-Trade-or-Business Form GCN-01/QLT (Appendix to Circular 66/2010/TT-BTC 41

182 Bilag 8

183 Public Consultation 201

184 PROPOSED DISCUSSION DRAFT In the 19 July 2013 BEPS Action Plan, the OECD was directed to [d]evelop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into account the compliance costs for business. The rules to be developed will include a requirement that MNE s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries according to a common template. This paper contains an initial draft of revised guidance on transfer pricing documentation and country-bycountry reporting. It is submitted for comment by interested parties. This document does not necessarily reflect consensus views of either the Committee on Fiscal Affairs (CFA) or of Working Party n 6 (WP6) regarding the issues it addresses. Rather, it reflects limited consideration of the issues in the short time since the publication of the Action Plan and seeks to identify issues for public comment. It is considered that stakeholder comments are essential to advancing this work. Specific issues on which comments would be appreciated are noted in the draft. Commentators should be aware that this paper was prepared by the OECD in the context of revisions to Chapter V of the Transfer Pricing Guidelines, concerning transfer pricing documentation. As the call to develop a common template for country-by-country reporting to tax authorities did not specifically limit the application of country-by-country reporting to transfer pricing administration, the OECD will be giving further consideration to whether information relevant to other aspects of tax administration and the BEPS Action Plan should also be included in the common template. Comments should be submitted in writing to [email protected] on or before 23 February It is proposed that the text of Chapter V of the Transfer Pricing Guidelines be deleted in its entirety and replaced with the following language and annexes. Chapter V Documentation A. Introduction 1. This chapter provides guidance for tax administrations to take into account in developing rules and/or procedures on documentation to be obtained from taxpayers in connection with a transfer pricing inquiry or risk assessment. It also provides guidance to assist taxpayers in identifying documentation that would be most helpful in showing that their transactions satisfy the arm s length principle and hence in resolving transfer pricing issues and facilitating tax examinations. 2. When Chapter V of these Guidelines was adopted in 1995, tax administrations and taxpayers had less experience in creating and using transfer pricing documentation. The previous language in Chapter V of the Guidelines put an emphasis on the need for reasonableness in the documentation process from the 1

185 perspective of both taxpayers and tax administrations, as well as on the desire for a greater level of cooperation between tax administrations and taxpayers in addressing documentation issues in order to avoid excessive documentation compliance burdens while at the same time providing for adequate information to apply the arm's length principle reliably. The previous language of Chapter V did not provide for a list of documents to be included in a transfer pricing documentation package nor did it provide clear guidance with respect to the link between the process for documenting transfer pricing, the administration of penalties and the burden of proof. 3. Since then, many countries have adopted transfer pricing documentation rules and the proliferation of these requirements, combined with a dramatic increase in the volume and complexity of international intra-group trade and the heightened scrutiny of transfer pricing issues by tax administrations has resulted in a significant increase in compliance costs for taxpayers. Nevertheless tax administrations often find transfer pricing documentation to be less than fully informative and not adequate for their tax enforcement and risk assessment needs. 4. The following discussion identifies three objectives of transfer pricing documentation rules. The discussion also provides guidance for the development of such rules so that transfer pricing compliance is more straight-forward and more consistent among countries, while at the same time providing tax administrations with more focused and useful information for transfer pricing risk assessments and audits. An important overarching consideration in developing such rules is to balance the usefulness of the data to tax administrations for risk assessment and other purposes with any increased compliance burdens placed on taxpayers. In this respect it is noted that clear and widely adopted documentation rules can reduce compliance costs which could otherwise arise in a transfer pricing dispute. B. Objectives of transfer pricing documentation requirements 5. Three objectives for requiring transfer pricing documentation are: 1. to provide tax administrations with the information necessary to conduct an informed transfer pricing risk assessment ; 2. to ensure that taxpayers give appropriate consideration to transfer pricing requirements in establishing prices and other conditions for transactions between associated enterprises and in reporting the income derived from such transactions in their tax returns; and 3. to provide tax administrations with the information that they require in order to conduct an appropriately thorough audit of the transfer pricing practices of entities subject to tax in their jurisdiction. 6. Each of these objectives should be considered in designing appropriate transfer pricing documentation requirements. It is important that tax administrations be able to access the information they need to conduct a risk assessment. This will enable tax administrations to make an informed decision to perform an audit. It is also important that tax administrations be able to access, on a timely basis, all additional information necessary to conduct a comprehensive audit once the decision to conduct such an audit is made. It is also important that taxpayers be required to carefully evaluate, at or before the time of filing a tax return, their own compliance with the applicable transfer pricing rules. B.1. Transfer pricing risk assessment 7. Effective risk identification and assessment constitute a crucial early stage in the process of selecting appropriate cases for transfer pricing audits or inquiries and in focusing such audits on the most important issues. Because tax administrations operate with limited resources, it is important for them to 2

186 accurately evaluate, at the very outset of a possible audit, whether a taxpayer s transfer pricing arrangements warrant in-depth review and a commitment of significant tax enforcement resources. Particularly with regard to transfer pricing issues (which generally are complex and fact-intensive), effective risk assessment becomes an essential prerequisite for a focused and resource-efficient audit. The OECD Handbook on Transfer Pricing Risk Assessment is a useful tool to consider in conducting such risk assessment. 8. Proper assessment of transfer pricing risk by the tax administration requires access to sufficient, relevant and reliable information at an early stage. While there are many sources of relevant information, transfer pricing documentation is one critical source of such information. 9. There are a variety of tools and sources of information used for identifying and evaluating transfer pricing risks of taxpayers and transactions, including transfer pricing forms (to be filed with the annual tax return), transfer pricing mandatory questionnaires focusing on particular areas of risk, general transfer pricing documentation requirements identifying the supporting evidence necessary to demonstrate the taxpayer s compliance with the arm s length principle, and cooperative discussions between tax administrations and taxpayers. Each of the tools and sources of information appears to respond to the same fundamental observation: there is a need for the tax administration to have ready access to relevant information at an early stage to enable an accurate and informed transfer pricing risk assessment. Some countries have also found that sharing risk assessment results with taxpayers can help improve compliance and enhance the effectiveness and the quality of an audit. Assuring that a high quality risk assessment can be carried out efficiently and with the right kinds of reliable information should be one important consideration in designing transfer pricing documentation rules. Comments are requested as to whether work on BEPS Action 13 should include development of additional standard forms and questionnaires beyond the country-by-country reporting template. Comments are also requested regarding the circumstances in which it might be appropriate for tax authorities to share their risk assessment with taxpayers. B.2. Taxpayer s assessment of its compliance with the arm s length principle 10. By requiring taxpayers to articulate solid, consistent and cogent transfer pricing positions, transfer pricing documentation can help to ensure that a culture of compliance is created. Well-prepared documentation will give tax administrations some assurance that the taxpayer has analysed the positions it reports on tax returns, has considered the available comparable data, and has reached consistent transfer pricing positions. Moreover, contemporaneous documentation requirements can restrain taxpayers from developing justifications for their positions after the fact. 11. This compliance objective may be supported in two important ways. First, tax administrations can require that transfer pricing documentation requirements be satisfied on a contemporaneous basis. This would mean that the documentation would be prepared at the time of the transaction, or in any event, no later than the time of completing and filing the tax return for the fiscal year in which the transaction takes place. The second way to encourage compliance is to establish transfer pricing penalty regimes in a manner intended to reward timely preparation of transfer pricing documentation and to create incentives for timely, careful consideration of the taxpayer s transfer pricing positions. Filing requirements and penalty provisions related to documentation are discussed in greater detail in Section D., below. 12. While ideally taxpayers will use transfer pricing documentation as an opportunity to articulate a well thought out basis for their transfer pricing policies, thereby meeting an important objective of such requirements, issues such as costs, time constraints, and competing demands for the attention of relevant personnel can sometimes undermine these objectives. It is therefore important for countries to keep 3

187 documentation requirements reasonable and focused on material transactions in order to ensure mindful compliance on the most important matters. B.3. Transfer pricing audit 13. A third objective for transfer pricing documentation is to provide tax administrations with information they need to conduct a thorough transfer pricing audit. Transfer pricing audit cases tend to be fact-intensive. They often involve difficult evaluations of the comparability of several transactions and markets. They can require detailed consideration of financial, factual and other industry information. The availability of adequate information from a variety of sources during the audit is critical to facilitating a tax administration s orderly examination of the taxpayer s controlled transactions with associated enterprises and enforcement of the applicable transfer pricing rules. 14. In situations where a proper risk assessment suggests that a thorough transfer pricing audit is warranted with regard to one or more issues, it is clearly the case that the tax administration must have the ability to obtain, within a reasonable period, all of the relevant documents and information in the taxpayer s possession. This includes information regarding the taxpayer s operations and functions, relevant information on the operations, functions and financial results of associated enterprises with which the taxpayer has entered into controlled transactions, information regarding potential comparables, including internal comparables, and documents regarding the operations and financial results of potentially comparable uncontrolled transactions and unrelated parties. To the extent such information is included in the transfer pricing documentation, special information and document production procedures can potentially be avoided. It must be recognised, however, that regardless of how comprehensive transfer pricing documentation requirements may be, situations will inevitably arise when tax administrations wish to obtain information not included in the documentation package. Thus, a tax administration s access to information should not be limited to, or by, the documentation package relied on in a risk assessment. Where a jurisdiction requires particular information to be kept for transfer pricing audit purposes, such requirements should balance the administration s need for information and the compliance burdens on taxpayers. 15. It may often be the case that the documents and other information required for a transfer pricing audit will be in the possession of members of the MNE group other than the local affiliate under examination. Often the necessary documents will be located outside the country whose tax administration is conducting the audit. It is therefore important that the tax administration is able to obtain directly or through information sharing, such as exchange of information mechanisms, information that extends beyond the country s borders. Comments are specifically requested on the appropriate scope and nature of possible rules relating to the production of information and documents in the possession of associated enterprises outside the jurisdiction requesting the information. C. A two-tiered approach to transfer pricing documentation 16. In order to achieve the objectives described in Section B, countries should adopt a standardised approach to transfer pricing documentation. This section describes a two-tier structure consisting of (i) a master file containing standardised information relevant for all MNE group members, and (ii) a local file referring specifically to material transactions of the local taxpayer. 17. This approach to transfer pricing documentation will provide tax administrations with relevant and reliable information to perform an efficient and robust risk assessment analysis. It will also provide a platform on which the information necessary for an audit can be developed and provide taxpayers with a 4

188 means and an incentive to meaningfully consider and describe their compliance with the arm s length principle in material transactions. C.1. Master file 18. The master file should contain common standardised information relevant for all MNE group members. Its purpose is to elicit a reasonably complete picture of the global business, financial reporting, debt structure, tax situation and the allocation of the MNE s income, economic activity and tax payments so as to assist tax administrations in evaluating the presence of significant transfer pricing risks. Taxpayers should be able to prepare the master file either for the MNE group as a whole or by line of business, depending on which would provide the most relevant transfer pricing information to tax administrations. Comments are requested as to whether preparation of the master file should be undertaken on a line of business or entity wide basis. Consideration should be given to the level of flexibility that can be accommodated in terms of sharing different business line information among relevant countries. Consideration should also be given to how governments could ensure that the master file covers all MNE income and activities if line of business reporting is permitted. 19. The information required in the master file provides a blueprint of the MNE group and contains relevant information that can be grouped in five categories: a) the MNE group s organisational structure; b) a description of the MNE s business or businesses; c) the MNE s intangibles; d) the MNE s intercompany financial activities; and (e) the MNE s financial and tax positions. 20. The section of the master file on financial and tax positions includes country-by-country reporting of certain information relating to the global allocation of profits, the taxes paid, and certain indicators of the location of economic activity (tangible assets, number of employees and total employee expense) among countries in which the MNE group operates. It also requires reporting of the capital and accumulated earnings as well as aggregate amounts of certain categories of payments and receipts between associated enterprises. A number of difficult technical questions arise in designing the country-by-country template on which there were a wide variety of views expressed by countries at the meeting of Working Party n 6 held in November Specific comments are requested on the following issues, as well on any other issues commentators may identify: Should the country-by-country report be part of the master file or should it be a completely separate document? Should the country-by-country template be compiled using bottom-up reporting from local statutory accounts as in the current draft, or should it require (or permit) a top-down allocation of the MNE group s consolidated income among countries? What are the additional systems requirements and compliance costs, if any, that would need to be taken into account for either the bottom-up or topdown approach? Should the country-by-country template be prepared on an entity by entity basis as in the current draft or should it require separate individual country consolidations reporting one aggregate revenue and income number per country if the bottom-up approach is used? Those suggesting top-down reporting usually suggest reporting one aggregate revenue and income number per country. In responding, commenters should understand that it is the tentative view of WP6 that to be useful, top-down reporting would need to reflect revenue and earnings attributable to cross-border transactions between associated enterprises but eliminate revenue and transactions between group entities within the same country. Would a requirement for separate individual country consolidations impose significant 5

189 additional burdens on taxpayers? What additional guidance would be required regarding source and characterization of income and allocation of costs to permit consistent country-by-country reporting under a top-down model? Should the country-by-country template require one aggregate number for corporate income tax paid on a cash or due basis per country? Should the country-by-country template require the reporting of withholding tax paid? Would a requirement for reporting withholding tax paid impose significant additional burdens on taxpayers? Should reporting of aggregate cross-border payments between associated enterprises be required? If so at what level of detail? Would a requirement for reporting intra-group payments of royalties, interest and service fees impose significant additional burdens on taxpayers? Should the country-by-country template require reporting the nature of the business activities carried out in a jurisdiction? Are there any features of specialist sectors that would need to be accommodated in such an approach? Would a requirement for reporting the nature of the business activities carried out in a jurisdiction impose significant additional burdens on taxpayers? What other measures of economic activity should be reported? 21. The country-by-country data required in the master file may be helpful in risk assessment processes. However, such information should not be used as a substitute for a detailed transfer pricing analysis of individual transactions and prices, a full functional analysis or a full comparability analysis. The information in the country-by-country reporting template would not constitute conclusive evidence that transfer prices are or are not appropriate. 22. Annex I to Chapter V of these Guidelines sets out the information to be included in the master file. Annex III to Chapter V contains the country-by-country reporting template to be provided as part of the master file. C.2. Local file 23. The information required in the local file supplements the master file and helps to meet the objective of assuring that the taxpayer has complied with the arm s length principle in its material transfer pricing positions affecting a specific jurisdiction. The local file focuses on information relevant to the transfer pricing analysis related to transactions taking place between a local country affiliate and associated enterprises in different countries and which are material in the context of the local country s tax system. Such information would include relevant financial information regarding those specific transactions, a comparability analysis and the selection and application of the most appropriate transfer pricing method for the fiscal year in question. 24. Annex II to Chapter V of these Guidelines sets out in detail the items of information to be included in the local file. D. Compliance issues D.1. Contemporaneous documentation 25. Each taxpayer should endeavour to determine transfer pricing for tax purposes in accordance with the arm s length principle, based upon information reasonably available at the time of the determination. Thus, a taxpayer ordinarily should give consideration to whether its transfer pricing is appropriate for tax purposes before the pricing is established and should confirm the arm s length nature of its financial results at the time of filing its tax return. 6

190 26. Taxpayers should not be expected to incur disproportionately high costs and burdens in producing documentation. Therefore, tax administrations should balance requests for documentation against the expected cost and administrative burden to the taxpayer of creating it. Where a taxpayer reasonably demonstrates, having regard to the principles of these Guidelines, that either no comparable data exists or that the cost of locating the comparable data would be disproportionately high relative to the amounts at issue, the taxpayer should not be required to incur costs in searching for such data. D.2. Time frame 27. Practices regarding the timing of the preparation of the documentation differ among countries. Some countries require information to be prepared by the time the tax return is filed. Others require documentation to be in place by the time the audit commences. There is also a variety in practice regarding the amount of time given to taxpayers to respond to specific tax administration requests for documentation and other audit related information requests. These differences in the time requirements for providing information can add to taxpayers difficulties in setting priorities and in providing the right information to the tax administrations at the right time. The best practice is to require that both the master file and the local file be prepared no later than the due date for the filing of the tax return for the fiscal year in question. In countries pursuing policies of auditing transactions as they occur under co-operative compliance programmes, it may be necessary for certain information to be provided in advance of the filing of the tax return. 28. It is recognised, however, that in some instances final statutory financial statements and other financial information relevant for the country-by-country data described in Annex III may not be finalised until after the due date for tax returns in some countries for a given fiscal year. Accordingly, best practice would extend the date for completion of the Annex III template to one year following the last day of the fiscal year of the ultimate parent entity of the MNE group. D.3. Materiality 29. Not all transactions that occur between associated enterprises are sufficiently material to require full documentation. Obviously, tax administrations have an interest in seeing the most important information while at the same time they also have an interest in seeing that MNEs are not so overwhelmed with compliance demands that they fail to consider and document the most important items. Thus, transfer pricing documentation requirements should include specific materiality thresholds that take into account the size and the nature of the local economy, the importance of the MNE group in that economy, and the size and nature of local operating entities, in addition to the overall size and nature of the MNE group. Comments are requested as to whether any more specific guideline on materiality could be provided and what form such materiality standards could take. 30. A number of countries have introduced in their transfer pricing documentation rules simplification measures which exempt small and medium-sized enterprises (SMEs) from transfer pricing documentation requirements or limit the information required to be provided by such enterprises. In order not to impose on taxpayers costs and burdens disproportionate to the circumstances, it is recommended to not require SMEs to produce the amount of documentation that might be expected from larger enterprises. However, SMEs should be obliged to provide information and documents about their material cross-border transactions with foreign associated parties upon a specific request of the tax administration in the course of a tax examination or for risk assessment purposes, and should be required to provide the country-bycountry reporting template set out in Annex III. 7

191 D.4. Retention of documents 31. Taxpayers should not be obliged to retain documents beyond a reasonable period consistent with the requirements of domestic law at either the parent company or local entity level. However, at times materials and information required in the documentation package (master file and local file) may be relevant to a transfer pricing inquiry for a subsequent year that is not time barred, for example where taxpayers voluntarily keep such records in relation to long-term contracts, or to determine whether comparability standards relating to the application of a transfer pricing method in that subsequent year are satisfied. Tax administrations should bear in mind the difficulties in locating documents for prior years and should restrict such requests to instances where they have good reason in connection with the transaction under examination for reviewing the documents in question. 32. Because the tax administration s ultimate interest would be satisfied if the necessary documents were submitted in a timely manner when requested by the tax administration in the course of an examination, the way that documentation is stored whether in paper, electronic form or in any other system - should be at the discretion of the taxpayer provided that relevant information can promptly be made available to the tax administration in a useful form. D.5. Frequency of documentation updates 33. It is recommended that transfer pricing documentation be periodically reviewed in order to determine whether functional and economic analyses are still accurate and relevant and to confirm the validity of the applied transfer pricing methodology. In general, both the master file and local file should be reviewed and updated annually. It is recognised, however, that in many situations business descriptions, functional analyses, and descriptions of comparables may not change significantly from year to year. 34. In order to simplify compliance burdens on taxpayers, tax administrations may determine, as long as the operating conditions remain unchanged, that the searches in databases for comparables supporting part of the local file be updated every 3 years rather than annually. Financial data for the comparables should nonetheless be updated every year in order to apply the arm s length principle reliably. Comments are requested regarding reasonable measures that could be taken to simplify the documentation process. Is the suggestion in paragraph 34 helpful? Does it raise issues regarding consistent application of the most appropriate transfer pricing method? D.6. Language 35. The necessity of providing documentation in local language may constitute a complicating factor with respect to transfer pricing compliance to the extent that substantial time and cost may be involved in translating documents. As a general matter the master file should be prepared and submitted to all tax administrations in English. However, transfer pricing documentation should be useful to local country tax administrations seeking to undertake a risk assessment, and therefore at least the local file should likely be prepared in the relevant local language. Where tax administrations believe that translation of relevant parts of the master file is necessary, they should make specific requests for translation and provide sufficient time to make such translation as comfortable a burden as possible. Comments are requested regarding the most appropriate approach to translation requirements, considering the need of both taxpayers and governments. 8

192 D.7. Penalties 36. Many countries have adopted documentation-related penalties to ensure efficient operation of transfer pricing documentation requirements. They are designed to make non-compliance more costly than compliance. 37. Documentation-related penalties imposed for failure to comply with transfer pricing documentation requirements or failure to timely submit required information are usually civil (or administrative) monetary penalties. These documentation-related civil (or administrative) monetary penalties are based on a fixed amount that may be assessed for each document missing or for each fiscal year under review or calculated as a percentage of the related tax understatement ultimately determined or as a percentage of the related adjustment to the income. 38. It would be unfair to impose sizable documentation-related penalties on taxpayers that make a reasonable effort, in good faith, to demonstrate through reliable documentation that their controlled transactions satisfy the arm s length principle. In particular, care should be taken not to impose a documentation-related penalty on a taxpayer for failing to submit data to which the MNE did not have access. However, a decision not to impose documentation-related penalty does not mean that adjustments cannot be made to income where prices are not consistent with the arm s length principle. The fact that positions are fully documented does not necessarily mean that the taxpayer s positions are correct. Moreover, an assertion by a local entity that other group members are responsible for transfer pricing compliance is not a sufficient reason for that entity to fail to provide required documentation, nor should such an assertion prevent the imposition of documentation-related penalties for failure to comply with documentation rules where the necessary information is not forthcoming. 39. Country practices with regard to transfer pricing documentation-related penalties vary widely. The existence of different local country penalty regimes may influence the quality of taxpayers compliance so that taxpayers could be driven to favour one country to another in their compliance practices. 40. Another way for countries to encourage taxpayers to fulfil transfer pricing documentation requirements is by designing compliance incentives such as penalty protection or a shift in the burden of proof. Where the documentation meets the requirements and is timely submitted, the taxpayer could be exempted from tax penalties or subject to a lower penalty rate if a transfer pricing adjustment is made and sustained, notwithstanding the provision of documentation. In jurisdictions where tax administration bears the burden of proof, a shift of the burden of proof to the taxpayer s side is another measure to secure transfer pricing documentation compliance when the documentation meets the requirements and is timely submitted. D.8 Confidentiality 41. Tax administrations should ensure that there is no public disclosure of trade secrets, scientific secrets, or other confidential information. Tax administrations therefore should use discretion in requesting this type of information and assure taxpayers that the information presented in documentation will remain confidential. In cases where disclosure is required in public court proceedings or judicial decisions, every effort should be made to ensure that confidentiality is maintained and that information is disclosed only to the extent needed. Comments are requested as to measures that can be taken to safeguard the confidentiality of sensitive information without limiting tax administration access to relevant information. 9

193 D.9. Other issues 42. The requirement to use the most reliable information will usually require the use of local comparables over the use of regional comparables where such local comparables are reasonably available. The use of regional comparables in transfer pricing documentation prepared for countries in the same geographic region in situations where appropriate local comparables are available will not, in some cases, comport with the obligation to rely on the most reliable information. While the simplification benefits of limiting the number of comparable searches a company is required to undertake are obvious, and materiality and compliance costs are relevant factors to consider, a desire for simplifying compliance processes should not go so far as to undermine compliance with the requirement to use the most reliable available information. See paragraphs on market differences and multi-country analyses for further detail of when local comparables are to be preferred. 43. It is not recommended, particularly at the stage of risk assessment, to require that the transfer pricing documentation should be certified by an outside auditor or other third party. Similarly, mandatory use of consulting firms to prepare transfer pricing documentation is not recommended provided the internal personnel preparing the documentation are qualified and have access to the appropriate data. E. Implementation 44. Transfer pricing documentation requirements are and should continue to be features of local law. The implementation of the two-tiered transfer pricing documentation consisting of a master file and a local file, therefore, requires that local countries modify their domestic transfer pricing documentation and reporting rules to require any locally based affiliate of an MNE group to produce the information contained in Annexes I-III. 45. In this respect, consistent and uniform formats are essential. To ensure that the master file information is consistent from country to country, local transfer pricing documentation requirements should include master file information conforming to Annexes I and III. It is recommended that the master file portion of the proposed documentation (including the country by country reporting template) be completed under the direction of the parent company of the MNE group and be shared with each country in which the MNE has an affiliate subject to tax. The master file could then be obtained by local taxing authorities directly from local affiliates. Absent prompt compliance at the local country level, such information could be obtained by tax administrations under treaty exchange of information mechanisms. Comments are requested regarding the most appropriate mechanism for making the master file and country-by-country reporting template available to relevant tax administrations. Possibilities include: The direct local filing of the information by MNE group members subject to tax in the jurisdiction; Filing of information in the parent company s jurisdiction and sharing it under treaty information exchange provisions; Some combination of the above. 10

194 Annex I to Chapter V: Transfer pricing documentation - Master file The following information should be included in the master file: Organisational structure Chart illustrating the MNE s legal and ownership structure and geographical location of operating entities. Description of MNE s business(es) For each of the MNE s major business lines: General written description of the MNE s business including: o Important drivers of business profit o Chart showing supply chain for material products and services o Chart showing important service arrangements between members of the MNE group other than R&D services o A description of the main geographic markets for material products and services o A written functional analysis describing the principal contributions to value creation by individual entities within the group, i.e. key functions performed, important risks assumed, and important assets used o A description of important business restructuring transactions, acquisitions and divestitures occurring during the fiscal year. o The title and country of the principal office of each of the 25 most highly compensated employees in the business line (note: names of such individuals should not be included) MNE s intangibles A description of the MNE s overall strategy for the development, ownership and exploitation of intangibles, including location of principal R&D facilities and location of R&D management. A list of material intangibles or groups of intangibles of the MNE group and which entities own them. A list of important related party agreements related to intangibles, including cost contribution arrangements, principal research service agreements and license agreements. A description of the group s transfer pricing policies related to R&D and intangibles. A description of any material transfers of interests in intangibles among associated enterprises during the fiscal year concerned, including the entities, countries, and compensation involved. MNE s intercompany financial activities A description of how the group is financed, including identification of important financing 11

195 arrangements with unrelated lenders. The identification of any members of the MNE group that provide a central financing function for the group, including the country under whose laws the entity is organised and place of effective management of such entities. A description of the MNE's general transfer pricing policies related to financing arrangements between associated enterprises. MNE s financial and tax positions MNE s annual consolidated financial statement for the fiscal year concerned. A list and brief description of the MNE group s applicable unilateral and bilateral/multilateral APAs and Advance rulings. A list and brief description of other relevant tax rulings related to the allocation of income to particular jurisdictions. A list and brief description of transfer pricing matters pending under treaty MAP or resolved in MAP during the last two years. Country-by-country reporting template according to Annex III. Comments are specifically requested as to whether reporting of APAs, other rulings and MAP cases should be required as part of the master file. 12

196 Annex II to Chapter V: Transfer pricing documentation - Local file The following information should be included in the local file: Local entity A description of the management structure of the local entity, a local organization chart and a description of the individuals to whom local management reports and the country(ies) in which such individuals maintain their principal offices. An indication whether the local entity has been involved in or affected by business restructurings or intangibles transfers in the present or immediately past year and an explanation of those aspects of such transactions affecting the local entity. Controlled transactions For each material category of controlled transactions in which the entity is involved, provide the following information: Description of the controlled transactions (e.g. procurement of manufacturing services, purchase of goods, provision of services, loans, licenses of intangibles, etc.) and the context in which it takes place (e.g. business activity, financial activities of the MNE group, cost contribution arrangement). Aggregate amount of intercompany charges for each category of transactions. Identification of associated enterprises involved in each category of controlled transactions, and the relationship amongst them. A detailed functional analysis of the taxpayer and relevant associated enterprises with respect to each documented category of controlled transactions, i.e. functions performed, assets used and/or contributed (including intangibles) and risks borne, including any changes compared to prior years. 1 Identification and description of other controlled transactions of the taxpayer that can directly or indirectly affect the pricing of the controlled transaction being documented. Indicate the most appropriate transfer pricing method with regard to the category of transaction and the reasons for selecting that method. Indicate which associated enterprise is selected as the tested party, if applicable, and explain why. Summarise the important assumptions made in applying the transfer pricing methodology. If relevant, explain the reasons for performing a multi-year analysis. List and description of selected comparable uncontrolled transactions (internal or external), if any, and information on relevant financial indicators for independent enterprises relied on in the transfer pricing analysis, including a description of the comparable search methodology and the source of such information. Describe any comparability adjustments performed, and indicate whether adjustments have been made to the results of the tested party, the comparable uncontrolled transactions, or both. Describe the reasons for concluding that relevant transactions were conducted on an arm s length basis based on the application of the selected transfer pricing method. 1 To the extent this functional analysis duplicates information in the master file, a cross reference to the master file is sufficient. 13

197 Annex II to Chapter V: Transfer pricing documentation - Local file A summary of financial information used in applying the transfer pricing methodology. Financial information Annual local entity financial accounts for the fiscal year concerned. If audited statements exist they should be supplied and if they do not existing unaudited statements should be supplied. Information and allocation schedules showing how the financial data used in applying the transfer pricing method may be tied to the annual financial statements. Summary schedules of relevant financial data for comparables used in the analysis and the sources from which that data was obtained. 14

198 Country Constituent Entities Organised in the Country CONFIDENTIAL CTPA/CFA/NOE2(2014)4/REV1/CONF Annex III to Chapter V: A Model Template of Country-by-Country Reporting Overview of allocation of income, taxes and business activities on a country-by-country basis Place of Effective Management Important business activity code(s) Revenues Earnings Before Income Tax (a) To Country of Organisation Income Tax Paid (on Cash Basis) (b) To All Other Countries Total Withholding Tax Paid Stated capital and accumulated earnings Number of Employees Total Employee Expense Tangible Assets other than Cash and Cash Equivalents Royalties Paid to Constituent Entities Royalties Received from Constituent Entities Interest Paid to Constituent Entities Interest Received from Constituent Entities Service Fees Paid to Constituent Entities Service Fees Received from Constituent Entities Total: Total: Total: Total: 15

199 CONFIDENTIAL CTPA/CFA/NOE2(2014)4/REV1/CONF Additional information: Please include any further brief information or explanation you consider necessary or that would facilitate the understanding of the compulsory information provided in the country by country template. 16

200 CONFIDENTIAL CTPA/CFA/NOE2(2014)4/REV1/CONF GENERAL INSTRUCTIONS FOR ANNEX III TO CHAPTER V Purpose This Annex III to Chapter V contains a template for reporting a multinational enterprise s ( MNE ) allocation of income, taxes and business activities on a country by country basis. The template is to be provided to tax administrations as part of the global transfer pricing documentation master file described in Annex I to Chapter V. These instructions form an integral part of the country-by-country template. Definitions Reporting MNE A Reporting MNE is the ultimate parent entity of an MNE group. Constituent Entity For purposes of completing Annex III, a Constituent Entity of the MNE group is any separate business unit of the MNE group that is an associated enterprise to the reporting MNE within the meaning set out in the glossary of the OECD Transfer Pricing Guidelines. Treatment of Branches and Permanent Establishments The term Constituent Entity also includes permanent establishments of a member of the MNE group conducting business in a country, provided such permanent establishment prepares a separate income statement for regulatory, financial reporting, internal management or tax purposes. Period Covered by the Annual Template The template should cover the fiscal year of the Reporting MNE. For each Constituent Entity, the template should reflect information for the fiscal year of such Constituent Entity that ends on the same date as the fiscal year of the Reporting MNE, or that ends within the 12 month period ending on such date. Alternatively, at the option of the Reporting MNE, information for all Constituent Entities may instead be reported for the fiscal year of the Reporting MNE. 17

201 CONFIDENTIAL CTPA/CFA/NOE2(2014)4/REV1/CONF SPECIFIC INSTRUCTIONS Country In the first column of the template, the Reporting MNE should list all of the countries under whose laws Constituent Entities of the MNE group are organised. Constituent Entities Organised in the Country In the second column of the template, the Reporting MNE should list, on a country by country basis, all of the Constituent Entities of the MNE group (company, corporation, trust, partnership, permanent establishment etc.) organised under the laws of the relevant country. With regard to permanent establishments, however, the permanent establishment should be listed by reference to the country in which the permanent establishment is situated. The legal entity of which it is a permanent establishment should be noted (e.g. XYZ Corp Country A PE). Place of Effective Management In the third column of the template, enter the country of the Constituent Entity s place of effective management. The place of effective management should be determined in accordance with the provisions of Article 4 of the OECD Model Tax Convention and its accompanying Commentary. Important business activity code(s) In the fourth column of the template, determine the important business activity(ies) of the Constituent Entity, using the codes of the list below. One or more codes may be indicated, as appropriate. Code Business activities A R & D B Holding intellectual property C Purchasing and Procurement D Manufacturing and Production E Sales, Marketing and Distribution F Administrative and Support Service G Finance H Insurance I Holding company J Other 2 Revenues In the fifth column of the template, the total revenues of the Constituent Entity should be reported. Total revenues include revenues from sales of inventory and properties, services, royalties, premiums and any other amounts received, regardless of whether they were generated from transactions with associated 2 Please specify the nature of the activity of the Constituent Entity in the «Additional information» section 18

202 CONFIDENTIAL CTPA/CFA/NOE2(2014)4/REV1/CONF enterprises or independent enterprises. The intention is that the amounts reported should be the revenue numbers taken directly from (i) the Constituent Entity s statutory financial statement if one exists, (ii) if a statutory statement is not prepared, the revenue number from the Constituent Entity s audited financial statement prepared for any other purpose (e.g. financing, regulatory, tax etc.) or (iii) if audited statements do not exist, annual revenues as reflected in the Constituent Entity s internal management accounts. Amounts should generally be reported in the Constituent Entity s functional currency and the relevant currency should be identified in the statement. It is not required that the amounts of revenue or other financial information be reported using the same accounting standards for all Constituent Entities. Thus, revenue of a Constituent Entity organised in one country may be reported in IFRS if it uses IFRS in its accounts, and revenue of a Constituent Entity organised in another country may be reported in local GAAP if it uses local GAAP in its accounts. Taxpayers wishing to do so, however, may elect to report all amounts under consistent accounting principles and translated on a consistent basis to a single currency. Income Earnings Before Income Tax In the sixth column of the template, enter the total amount of earnings before income tax for the Constituent Entity. This number should be taken from the same financial statement as the revenue numbers and should generally be reflected in the functional currency of the Constituent Entity. Income Tax Paid (on Cash Basis) (a) To Country of organisation In the seventh column of the template, enter the amount of income tax actually paid to the country of organisation by each Constituent Entity during the relevant year. Cash payments of tax and not tax accruals should be reported. Tax payments should be reported in the same currency used to report earnings before income tax in column 6. (b) To All Other Countries In the eighth column of the template, enter the amount of income tax paid by the Constituent Entity to all countries other than the country of its organisation for the relevant fiscal year. Cash payments of tax and not tax accruals should be reported. Tax payments should be reported in the same currency used to report earnings before income tax in column 6. In some cases tax will be paid by one entity on behalf of a combined group of associated enterprises operating in a country. Where that is the case, tax should be allocated among members of the relevant combined group in proportion to their shares of the EBIT of the combined group. Total withholding Tax Paid In the ninth column of the template, enter the total amount of withholding tax paid with respect to payments received from other entities. This amount should not include withholding of taxes on employee salaries, withholding of social welfare taxes, withholding on payments of pensions, or any other amount other than withholding in lieu of income tax on payments such as dividends, royalties, interest, service fees and similar items received. 19

203 CONFIDENTIAL CTPA/CFA/NOE2(2014)4/REV1/CONF Stated capital and accumulated earnings In the tenth column of the template, enter the stated capital and accumulated earnings of the Constituent Entity as reflected in the year-end balance sheet of the Constituent Entity. Number of Employees In the eleventh column of the template, enter the total number of employees of the Constituent Entity as of the last day of the entity s relevant fiscal year. All employees on the payroll of the Constituent Entity should be included, regardless of their location. However, employees seconded to other members of the MNE group need not be included. Employees seconded from other members of the MNE group should be included. Total Employee Expense In the twelfth column of the template, provide total employee expense including all non-cash payments or benefits such as employee option schemes. Tangible Assets other than Cash and Cash Equivalents In the thirteenth column of the template, enter the book value of tangible assets reflected on the balance sheet of the Constituent Entity as of the last day of the relevant fiscal year. Tangible assets for this purpose do not include cash or cash equivalents, intangibles, or financial assets. Intercompany Payments In columns fourteen and fifteen of the template, report total royalties paid to and received from other Constituent Entities. In columns sixteen and seventeen, report total interest paid to and received from other Constituent Entities. In columns eighteen and nineteen, report total service fees paid to and received from other Constituent Entities. 20

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205 OECD s prisfastsættelsesmetoder Der eksisterer 5 transfer pricing-metoder, der kan benyttes til at fastslå prisen på en koncernintern transaktion. Metoderne er officielle OECD metoder, og det er således disse metoder OECD anbefaler skatteydere og skattemyndigheder at benytte. De 5 metoder er som følger: Den frie markedsprismetode (CUP) Her søges der, at foretage en direkte sammenligning til et produkt der er direkte sammenligneligt som handles mellem to eksterne parter (ekstern CUP), eller mellem en koncern og en ekstern part (intern CUP). Videresalgsmetoden (Resale minus) Her fastsættes priser ud fra bruttoavance niveau, hvor man foretager en sammenligning til den bruttoavance, der opnås i sammenlignelige virksomheder. Kostpris plus avancemetoden (Cost plus) Prisen fastsættes på bruttoavance niveau, ud fra den mark-up der opnås på kostpriser i sammenlignelige virksomheder. Avancefordelingsmetoden (Profit split) Nettoavancen for et givent produkt splittes mellem de værdiskabende parter, med den procentdel, som de hver har bidraget med i produktskabelsen. Den transaktionsbestemte nettoavancemetode (TNMM) Nettoavancen fastsættes ud fra den avance sammenlignelige virksomheder opnår på bundlinjen. På denne måde vil priserne vil fastsat så denne avance opnås.

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207 Skattekontrolloven 5 5. Har den selvangivelsespligtige ikke selvangivet rettidigt, betales et skattetillæg på 200 kr., for hver dag selvangivelsesfristen overskrides, dog højst på kr. i alt. Fra skattetillægget efter 1. pkt. gøres der følgende undtagelser: 1) For fysiske personer, der har fået tilsendt en årsopgørelse efter regler fastsat af skatteministeren i medfør af 1, stk. 5, eller oplysninger om indberettede tal til brug for årsopgørelsen, jf. 1, stk. 6, og som ikke efter 4, stk. 1, nr. 2, har anmodet om i stedet at modtage en selvangivelse, beregnes ikke noget skattetillæg. Tilsvarende gælder personer, som alene har fået tilsendt oplysninger om indberettede tal til brug for årsopgørelsen. 2) For fysiske personer, hvis skattepligtige indkomst for det pågældende indkomstår ikke overstiger bundfradraget for topskatten efter 7 i personskatteloven, udgør skattetillægget 100 kr., for hver dag fristen overskrides, dog højst kr. i alt. 3) For fonde og foreninger, der efter 15 i fondsbeskatningsloven kan opfylde selvangivelsespligten ved afgivelse af en særlig erklæring, betales et skattetillæg på 500 kr. for ikke at selvangive rettidigt. Skattetillægget tilfalder staten. Told- og skatteforvaltningen kan efter ansøgning fritage helt eller delvis for skattetillægget, hvis særlige omstændigheder taler herfor. Stk. 2. Uanset bestemmelsen i stk. 1, 1. pkt., kan told- og skatteforvaltningen fremtvinge en selvangivelse ved pålæg af daglige bøder. Bøden tilfalder staten. Stk. 3. Hvis den selvangivelsespligtige ikke har selvangivet fyldestgørende på ansættelsestidspunktet, kan skatteansættelsen foretages skønsmæssigt.