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Country-by-country compliance burden could be relieved by cross-referencing says OECD public consultation

The OECD’s public consultation on transfer pricing and country-by-country reporting (CbCR) today raised the possibility of cross-referencing in a company’s master file, to help ease the compliance burden for taxpayers and authorities.

Representatives from KPMG and EY voiced their concerns over the burdensome requirements listed in the master file. Specific comments were made about the length of the document as well as the information required.

Taxpayers involved in the discussion said information is being asked for that is not necessarily relevant to certain countries, such as the reporting of global intangibles.

Ronald van den Brekel, of EY, said the master file should be limited to information relevant to transactions and that other information should be provided in the local file.

The resounding sentiment amongst taxpayers was that the master file asks for information that is already available in other documentation. Therefore, the master file duplicates the amount of work for the taxpayer.

Joe Andrus, Working Party No. 6 secretary and head of the OECD’s transfer pricing unit until Andrew Hickman formally takes over the role this month, asked whether being able to cross-reference specific documentation such as the US’s 10-K form would satisfy taxpayers’ concerns.

In answer, Benjamin Shreck, representing the TEI, said it would be useful for taxpayers to cross-reference in a way that does not send tax authorities on a “treasure hunt” for information.

While there is still much to discuss with regards to the master file, the secretary’s openness to cross-referencing signals a step in the right direction for reducing the burden put on taxpayers. 





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