In the Asia-Pacific Region, Australia, and Japan have both been on the front foot of the BEPS action plan changes releasing legislation to introduce CbC Reporting. Other countries in the region including China, India, South Korea and New Zealand have already announced or confirmed that they are planning to do so. Countries including Malaysia, Singapore, Philippines and Indonesia have not yet issued any formal commentary or legislation around the CbC Reporting.
It is expected that all countries in the Asia-Pacific Region will introduce the CbC Reporting as it is a key element of the BEPS Action Plan agreed by all 34 OECD member countries, G20 nations, and other nations which joined the BEPS discussions at the OECD (including Malaysia, Singapore, Philippines and Indonesia).
In January 2016, a Multilateral Competent Authority Agreement (MCAA) on the Exchange of CbC reports was prepared by the OECD and opened for signature by interested parties (tax authorities via their governing Ministry).To date, it has been signed by 32 countries including Australia, Japan, and Malaysia. The MCAA will enable Competent Authorities of signature countries to exchange automatically the CbC Reporting information.
The Australian Government has already implemented CbC Reporting making its commitment to tax transparency clear. The changes were issued via the MAAL legislation in December 2015 and commenced 1 January 2016. We expect other countries in the Asia-Pacific region to follow Australia’s example.
For more information about the MAAL measures visit Transfer Pricing Solution’s blog post on the topic. http://www.transferpricingsolutions.com.au/blog/MAAL
Singapore is expected to provide guidance in the coming months about transfer pricing documentation and the implementation of CbC Reporting. Singapore did not mention the CbC Reporting in the recent update of the transfer pricing guidelines. However, the updated version of the transfer pricing guidelines released in January 2016 shows that the IRAS is focusing on transfer pricing and that documentation is key to supporting the prices agreed in international related party transactions.
Malaysia has established a BEPS action committee to discuss the implementation of the various BEPS action items in regards to their legislation. Malaysia with 31 other countries has also signed the MCAA to enable automatic sharing of the CbC information.
The fiscal budget for 2016 saw India introduce a proposal on the three-tiered transfer pricing documentation requirement and the CbC Reporting with first filling due by 30 November 2017. The CbC Reporting proposal is in line with BEPS Action 13.
If you’d like to know more about Country-by-Country reporting or any other BEPS Action Plan related requirements, please contact the team at Transfer Pricing Solutions.
For more information about the CbC Reporting and how can affect your company, please contact our offices in Australia or Singapore.
Transfer Pricing Solutions on email@example.com www.transferpricingsolutions.com.au or Transfer Pricing Solutions Asia on firstname.lastname@example.org www.transferpricingsolutions.asia
 Australia, Austria, Belgium, Chile, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, Mexico, the Netherlands, Nigeria, Norway, Poland, Portugal, Senegal, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland and the UK.
Singapore is often a preferred location for setting up headquarters as the door to conduct business in Asia. The IRAS has released its views on how Singapore HQ's should plan and implement their transfer pricing framework. Want to know more? Read our article with our views on IRAS TP Guidelines for Singapore HQs.
The Malaysian Finance Bill 2020 incorporates transfer pricing-related changes to the current Income Tax Act, 1967 (“ITA”). The changes permit significantly greater authority to the Malaysia Inland Revenue Board (“MIRB”) and re-emphasises the importance of transfer pricing compliance, with effect from 1 January 2021.
Thec Covid-19 pandemic has triggered the most severe recession and is causing enormous damage to the world economy. The economic downturn will impact a group’s transfer prices, analysis and documentation, more so with the BEPS Action Plans in place and the high level of transfer pricing scrutiny across the globe.