New post-BEPS three-tiered documentation requirements

In October 2015, the Organisation for Economic Cooperation and Development (“OECD”) with assistance from G20 countries published a set of final reports outlining various actions to address Base Erosion and Profit Shifting (“BEPS”). Specifically, BEPS Action Plan ¹13 proposed a concept of threetiered transfer pricing documentation, including the preparation of master files, local files and country-by-country reporting (“CbCR”) by multinational enterprises (“MNE”). The proposed concept reflects G20 and OECD country members’ intentions to introduce a unified international standard for transfer pricing reporting and subsequently implement it in the corresponding countries. The business society is expected to accept the concept, as it will help to reduce the cost of complying with local legal requirements.

Currently, more than 20 countries have adopted or prepared amendments to national legislation regarding the preparation and submission of the new documentation. For countries that have already adopted the amendments (e.g. the Netherlands, Spain and the UK), the first reporting period for the CbCR is 2016. Even though Kazakhstan is not an OECD member and there are currently no requirements to prepare or submit the CbCR and master file, under certain circumstances local companies are required to prepare it (please see later in the document).