The new BEPS tax regulations are leaving many transfer tax professionals scrambling. More reporting, more data, and more deadlines necessitate a greater degree of document management and an organized approach to compliance. 

But while there’s a good deal of complexity to BEPS, there are also ways to make the compliance process more manageable. (Tweet this!) This article offers a concise overview of OECD BEPS requirements, and a work plan you can use to manage the compliance process successfully.

An Overview Of OECD BEPS Requirements

In 2013, the Organisation for Economic Co-operation and Development (OECD) introduced 15 action points to address base erosion and profit shifting (BEPS) concerns. Base erosion occurs when multinational organizations derive a financial benefit from taking advantage of discrepancies in tax rates between jurisdictions. This ultimately led to the publication of updated transfer pricing guidelines in 2017, which require businesses to comply with the actions introduced by the OECD, through adoption of the BEPS recommendations in tax regulation.

Point 13 of the OECD BEPS action plan outlines a three-tiered approach to transfer pricing documentation, and represents a change in the reporting requirements. It specifies that transfer pricing documentation for multinational enterprises must include:

• A master file outlining your company’s transfer pricing policies and business activities.
• A country-by-country report with information on your company’s business deals in every country it operates in.
• A local file with specific information on all intercompany transactions.

Developing an OECD BEPS work plan to ensure compliance with all the new reporting requirements is difficult—and the penalties for not complying can be costly. If you’re responsible for transfer pricing compliance, you need a detailed work plan to meet important deadlines and manage the compliance process successfully. That’s why we developed a scalable work plan, complete with timelines and task lists, to help guide our own clients through the OECD BEPS reporting process. The good news is that we’re sharing a free, templated version of the work plan with you now.

A BEPS Work Plan: The First 3 Weeks

By downloading our free OECD BEPS work plan, you’ll gain access to complete BEPS timelines and task lists; learn more detailed information on what should be included in your transfer pricing reports; and have a weekly plan to follow that will help ensure your transfer pricing documentation is filed correctly and on time.

The work plan breaks the process down over ten weeks—so you won’t be scrambling right before important deadlines to gather the required data and get the internal approvals you need to submit your reports. Here’s a preview of the first three weeks of the work plan: 

• Start gathering information and deciding who will be on the internal project team.
• Hold an introductory meeting with key stakeholders across tax, finance, and other relevant departments.
• Determine with whom you will be working in each of the local entities involved in the process. You need to have contacts in the countries where you do business to clarify or explain items.

• Identify country contacts in the introductory meeting. If you can identify them before the introductory meeting, consider including them in the meeting.
• Send out information requests to gather the required information for country-by-country reporting.
• Determine the sources of data in each country and entity, if not coming from consolidated financial.
• Set up the CBC reporting template using the OECD template.
• Populate the CBC template with countries, tax IDs, and companies or business units.

• Identify local stakeholders in your introductory meeting or in meetings with country contacts.
• Request local (business unit or company) files on intra-company transactions from country contacts.
• Compile a comprehensive list of necessary information for information requests—legal and financial agreements, local regulations, etc. This will reduce the amount of time you spend dealing with country contacts to gather information and will provide country contacts with the guidance they need to determine if local companies or business units have provided all the required information.
• Schedule interviews with colleagues in key roles in local companies/business units—manufacturing, sales, distribution, finance, operations, etc. Scheduling these meetings can take time, so it’s important to start this task early.
• Enter all information collected from local companies/business units.

At the end of the three-week period, review all the information you’ve gathered to see if additional information requests or interviews are required.

By following the steps in this plan—outlined in the template below—you will have all the necessary information for compliance with OECD BEPS requirements in hand while avoiding the last-minute scramble.

Master File & CBC Reporting 

Local File

Complying with transfer pricing documentation requirements is challenging—but with the right tools and the right guidance, it’s not impossible. If you need help doing this on your own, download the full version of our Templated Work Plan For OECD BEPS Requirements.

Download it today to ensure you meet all important deadlines and provide the right transfer pricing documentation to comply with OECD BEPS requirements.