Country-by-country report — what part of this actually needs a professional?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: revenue, profit, tax paid and accrued, capital, earnings, employees and tangible assets are reported per jurisdiction.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Which company in the group actually files the report?
The report is a group-level filing rather than an entity-level one, so the question is which entity files it and where, not whether each subsidiary files its own. Normally that falls to the ultimate parent in the country where it is resident, with a substitute filer used where the parent's own country will not exchange the report with the countries the group operates in. Subsidiaries in other jurisdictions are generally expected to say who is filing on the group's behalf and where, which is a separate obligation from the report itself and is the one most often overlooked.
Will the countries we operate in see a report our parent files?
That is the design. The report is filed once and exchanged between authorities, so a subsidiary's local tax office can be reading a table prepared by a parent finance team on the other side of the world, that the subsidiary has never seen. Two practical consequences follow. The local team should obtain and read the group's report before it is filed, because they will be answering questions on it. And anything in the local file that cannot be reconciled to the group's figures for that jurisdiction is discoverable without anyone opening an audit.
Our profit sits where we have almost no employees — is that a problem?
It is the comparison the template is built to invite. Revenue, profit, tax paid and accrued, capital, earnings, employees and tangible assets are reported side by side for each jurisdiction, so a jurisdiction with substantial profit and very few people or assets stands out on the face of the return. That does not make the position wrong — financing, licensing and holding structures can have genuine commercial explanations with small headcounts. It does mean the explanation should exist in writing, be consistent with the functional analysis in your local file, and be ready before the question arrives rather than after.
What do we do if the report and our local file disagree?
Find out why before either is filed, because both will end up in front of the same reader. Differences are frequently mechanical rather than substantive: a different data source, a different treatment of intercompany dividends, an entity in the wrong jurisdiction column, headcount measured at a different date. Identify the cause, correct whichever document is wrong, and where a difference is genuine and defensible, record the reconciliation in the local file. An unexplained mismatch invites a question that starts from the assumption that the profit is in the wrong place.
Do the figures have to tie back to our audited accounts?
Not necessarily line for line, but the source has to be a sensible one and it has to be used consistently. Groups generally draw on consolidation packages, statutory accounts or management accounts, and each of those will give a slightly different answer for the same jurisdiction. The requirement that matters in practice is consistency from year to year, with any change of source disclosed and explained. A group that switches source without saying so produces a jump between years that looks like a change in the business rather than a change in the extraction.
Can a tax authority assess us based on the report alone?
It is a risk-assessment tool rather than a determination of any price. Nothing in the template tests a single intercompany transaction, and the arm's length position on a transaction still has to be established on that transaction's own facts. What the report does is decide who gets looked at, and in what order. Treat it accordingly: the effort belongs in making sure each jurisdiction's figures are right, consistent with the local file, and accompanied by an explanation for anything on the face of the table that a reader would otherwise want explained.
Is "fund transfer pricing" the same thing as transfer pricing?
No — and if you came here to calculate FTP, this is not it. Fund transfer pricing is a bank's internal allocation of funding costs and benefits between its own business units, a treasury and asset-liability management discipline used to measure branch or product profitability. Tax transfer pricing is about prices between legally separate related parties across borders, and about which country taxes the resulting profit. The words overlap; the fields do not. See our transfer pricing work.
What is the difference between a master file and a local file?
The master file describes the group as a whole — its structure, where value is created, how intangibles and financing are held. The local file covers one entity's own related-party transactions in detail, with the analysis supporting each price. Larger groups file both, plus country-by-country reporting above a size threshold, and the thresholds differ by country. See master file vs local file.
