Support for transfer pricing documentation
Based on recommendations by the Organization for Economic Cooperation and Development's (OECD) Base Erosion and Profit Shifting (BEPS) project, many countries have been reviewing regulations regarding transfer pricing documentation prepared by multinational enterprise groups.
In Japan, the 2016 tax reform required a constituent entity of a multinational enterprise group with total consolidated revenue of JPY100 billion or more in the preceding fiscal year to submit a master file (report on business overview) from the fiscal year of its ultimate parent company started on or after April 1, 2016.
Each constituent entity is required to submit a master file based on transfer pricing documentation rules in the respective countries, and the details of the master file may be slightly different according to the country. However, since the each country's details of the master file are generally in accordance with the OECD recommendations, it may be efficient for a company controlling the entire group (e.g., the ultimate parent company) to play a main role in preparing a master file.
For the above reason, member offices of BDO International use a common template and support ultimate parent company to develop a master file. In addition, we provide document review services by member offices regarding the master file developed in Japan upon requests.
With regards to a local file (documents considered as necessary to calculate arm's length price), BDO Tax Co., cooperating with BDO International member offices, support the development of local file and tax documents based on transfer pricing taxation in countries where group companies are located in addition to supporting the development of a local file based on transfer pricing taxation in Japan.
For more details about support for preparing tax return documents in Japan, please check the tax service section.