The Finance Ministry has issued new guidance on transfer pricing documentation. This guidance creates three categories of documentation based on the degree of detail of the information required in relation to a taxpayer’s risk profile. The guidance therefore balances the state’s tax revenue protection interests while also attempting to relieve a potentially unreasonably high compliance burden for some taxpayers regarded as low risk from a transfer pricing viewpoint.
The new guidance on the determination of the content of transfer pricing documentation was published on 14th May 2015 and replaces the previous Guidance MF/8120/2014-721 that was issued on 20th August 2014. This new Guidance applies to the preparation of transfer pricing documentation for tax periods beginning on or after 1st January 2015. It includes definitions of types of documentation such as full documentation, major documentation, abbreviated documentation, and information requirements on cross-border transactions, domestic transactions, financial transactions, group transactions and guidance on the continuity of documentation.
