Consequences of the New Transfer Pricing Documentation Requirements After Implementation of OECD Action 13 in Danish Regulation

Jesper Hovmand Carstensen & Janus Bindeballe Olsen

Student thesis: Master thesis


Due to the changes in the global business environment and the Multinational entities being more and more globalized an increase of taxation or the lack of it have been identified and several large multinational entities has been a part of claims from authorities of missing tax payments. The public focus meant that politicians around the world increased the focus and moved it onto the political agenda. OECD published the report “Base Erosion and Profit Shifting” which indicated that the global tax environment had several opportunities to optimize the tax payments. In 2015, OECD released the final BEPS report with 15 actions points. This thesis will firstly cover in general terms the background of the BEPS project and the different actions. Afterwards it will analyse the impact of action 13, which comprises the new requirements to the transfer pricing documentation. It enclosed a new 3tiered approach that requires entities to prepare a Masterfile and local file, which were in line with the previous requirements, but added the country‐by‐country report. The analysis will comprises a comparison and impact between the old and new legislations. As a part of the analysis of the action 13, the thesis will furthermore comprises analysis of the areas of action 8, which indirectly is affected by the requirements in the Masterfile as a large part of the tax opportunities were related to the intangible assets, which were placed in entities in low tax countries. The analysis shows that the new requirements still contains several of black boxes for the entities and the Danish Tax authorities as no country‐by- country reporting has been reviewed yet, and furthermore has no transfer pricing documentation been reviewed yet, with the new requirements. It is expected that the focus from the entities is that they will take part in MAP‐proceedings to efficiently avoid tax reviews by tax authorities. The new documentation are expected to have impact in countries, which currently does not have the same documents as the Danish Tax Authorities and possibly lead to an escalation in transfer‐pricing audits and subsequent adjustments from foreign authorities.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2017
Number of pages131