On 28 August 2019, the Hong Kong Inland Revenue Department published a webpage explaining the requirements in relation to master file and local file, and the Department’s approach to ensure compliance with the requirements.
The webpage outlined the overview of transfer pricing documentation including master file, local file requirements. A master file should give a high-level overview of the group of enterprises, including the global business operations and transfer pricing policies. It is expected to assist in evaluating the presence of significant transfer pricing risk.
A local file should provide detailed transactional transfer pricing information specific to the enterprise in each jurisdiction, including details of material controlled transactions undertaken by the enterprise and associated enterprises involved, amounts involved in those transactions and transfer pricing analysis with respect to those transactions.
The requirements relating to master file and local file apply in relation to an accounting period beginning on or after 1 April 2018.
