Organisation for Economic Co-operation and Development (OECD) and G20 countries within the framework of base erosion and profits shifting (BEPS) Action Plan continue implementing measures promoting equitable taxation and directed against abuse of benefits and unfair use of tax laws.

One of this process novelties is the implementation of country-by-country reporting (CbCR) provided by BEPS Action 13, which allows to tax authorities of different countries to correctly estimate the compliance with arm’s length principle by multinational corporations in the course of intragroup transactions. The problem to be solved by this novelty is the provision the tax authorities of the countries where the group companies actually conduct their activities with the integral data for the comprehension of the group’s business that allows making conclusion of correspondence (or lack of correspondence) between actual business activities of certain company and a share of intragroup profit gained by that company.

Besides, in addition to usual transfer pricing documentation which the companies prepare with regard to their related-party transactions one more document is to be implemented that generally shows an international group of companies’ activities and its approaches to price formation and profit allocation. Such a document known as a master file can be requested and received by the tax authorities of any country where group’s companies conduct their business.

As on June 30, 2016, the Agreement on the Exchange of CbCR was signed by 44 countries. At present the national laws on the implementation of BEPS Action 13 are under consideration in more than 30 countries. In Russia the draft law on CbCR implementation has been prepared but so far not introduced.

However, the said tax innovations can affect Russian companies even before the Russian law on CbCR takes effect. This will happen if at least one of group’s companies conducts business in a country where CbCR law has been adopted (provided that the group’s annual revenue exceeds EUR 750 mln). Then the data of Russian companies of a group shall be included in a country-by-country report and shown in a master file.

Any newly adopted law causes a lot of questions and requires the estimation of probable effects of its practical application.

So we are pleased to offer you:

  • All possible assistance to our clients in studying foreign countries’ CbCR laws provisions and their application
  • Practical and technical support in:
    • Preparing country-by-country reports (or data for them)
    • Organisation of CbCR data formation control system
    • Complex preliminary analysis of indices to be included in CbCR
  • Our short-term plans: conducting seminars and webinars on the new format of transfer pricing documentation taking into consideration BEPS Action 13

Our company works in close co-operation with the consultants of those countries where CbCR application practice is already forming, such as the Netherlands and Australia, as well as China and the UK.

The comprehension of transfer pricing law principles and BEPS Action Plan approaches guarantees optimal and immediate solution of very complicated issues.

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