Introduction
BEPS Action 13 introduces a new three-tiered transfer pricing documentation approach consisting of a CbC report, a master file, and a local file. The new documentation requirements significantly increase the compliance burden for multinational companies. To relief smaller enterprises from the additional compliance requirements, various countries have introduced revenue thresholds in relation to the master file reporting requirements.
The table below provides an overview of countries that have implemented such a threshold:
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|
Master File Thresholds |
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|
Country |
Thres-hold (in EUR M) |
Group level (global) |
Local entity level |
Comment |
|
Australia |
650M |
● |
MNE Global Turnover >AUD 1,000M |
|
|
France |
400M |
● |
MNE Global Turnover / Gross assets in balance sheet >EUR 400M |
|
|
Germany |
100M |
● |
MNE Global Turnover >100M |
|
|
Italy |
50M |
● |
Local Entity Revenue >EUR 50M |
|
|
Japan |
800M |
● |
MNE Global Turnover > JPY 100M over the preceding fiscal year |
|
|
Korea |
75M |
● |
Local Entity Net Sales >KRW100B (USD 85M) in Korea, and Cross-Border Related-Party Transactions > KRW 50B (USD 42.5M) per year |
|
|
Mexico |
30.7M |
● |
Local Entity Revenue > MXN 644,599,005 |
|
|
Netherlands |
50M |
● |
MNE Global Turnover > EUR 50M |
|
|
Poland |
20M |
● |
Local Entity Revenue > EUR 20M |
|
|
Singapore |
9.9M |
● |
Local Entity Related Party Transactions > SGD 15M |
|
|
Spain |
45M |
● |
MNE Global Turnover > EUR 45M |
|
The different thresholds and requirements for filing the master file reflect a lack of consensus among countries regarding reporting requirements. As a result of the differences between jurisdictions, (smaller) multinational companies will have to carefully review local requirements of countries where they have tax presence, to determine whether the preparation of a master file is necessary.