Many countries nowadays implement the BEPS recommendations such as the ‘master’ and ‘local’ file and the ‘Country-by-Country’ report. In general, this not only leads to an aggravation of Transfer Pricing (hereafter: TP) compliance activities, but also results in the potential discovery of errors that were previously undetectable. Indeed, TP processes are generally not (yet) automated and analysis activities regarding TP are primarily executed manually.
This situation makes it challenging to have all relevant tax data provided in time. This applies to both the collection of the required source data, as well as the TP analysis itself. Often, the supplied formats and templates are unusable or have to be ‘manually’ modified in Excel in order to be used.
The current trend is that increasingly more detailed information is necessary for specific products or services; ranging from who the order was placed by to details about the applied margins for service – and goods transactions and the conditions under which these took place. Timely access to such source data has thus become even more important.
This is also the ‘overlap’ with data required for the indirect tax function. Cross-border intercompany transactions form a risk area that will be included in the VAT risk matrix – risks that exceed the risk appetite – by every multinational and that requires efficient monitoring and checks.
All chapters
- Introduction: Relevant tax data from Transfer Pricing and VAT: explaining the ‘Why’, ‘What’ and ‘How’
- The auditor is not (yet) a risk analyst
- New tax legislation in the UK: 'Tone at the top'
- More attention for Transfer Pricing
- More attention for VAT
- Tax authorities request more, faster and more often tax data
- SAF-T rolled out in more countries
- 'The impact on in-house tax function' and 'Preaudit before submit'
- Realise a joint tax responsibility
- Read: complete article with all chapters and links to follow up articles (in depth)
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