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Why Documentation is So Expensive

Preparing global documentation is expensive. Understanding why it is so expensive is the first step in trying to determine how to lower costs while improving quality. Let's start with some simple arithmetic. The OECD local file template has 20 information requests, 4 asking for legal entity information and 16 asking for information by transaction. For [...]

By | 2017-11-13T01:11:46+00:00 March 27th, 2017|

Transfer Pricing Documentation – Comparing Costs and Benefits

Documentation is expensive, and tax department budgets are finite. Therefore, tax departments face the very common economic problem of how to allocate resources more effectively, a process that starts with the determination of which legal entities need documentation and an evaluation of the type of documentation that is needed. Some tax departments approach this issue with [...]

By | 2017-11-13T20:54:19+00:00 March 27th, 2017|

Building a Risk Scorecard

Over the past decade, the number of countries that require (or at least expect) transfer pricing documentation has increased dramatically. However, the nature of the regulatory requirements and the benefits/cost of providing documentation varies substantially by country. Given the cost of preparing documentation, many MNEs prioritize different countries, designating some as ones where documentation is [...]

By | 2017-11-13T01:10:19+00:00 July 2nd, 2015|

Local Documentation – Not Necessarily New, But Certainly Costly

While the CbC report and the master file have attracted the most attention among the OECD's recommendations for transfer pricing documentation as they are new, as a practical matter local documentation requirements will impose a much greater burden upon MNEs because of the sheer volume of information required. Local files, which are customized for each [...]

By | 2017-11-13T01:09:34+00:00 July 2nd, 2015|

New Documentation Basics: Master File

The master file as described in the new OECD Guidance is a single document that is to be provided to all tax authorities, and as such is a new requirement. Unlike the CbC Report, which is generally limited to MNEs with $750 million or more in sales, a number of countries are requiring master files [...]

By | 2017-11-13T01:09:27+00:00 July 2nd, 2015|