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Why Transfer Pricing Master Files Matter?

The Local File is essential for proving that local transactions are priced at arm’s length. It links financial data, contracts, and benchmarking analyses to the group’s global framework. A well-prepared Local File reduces audit exposure, supports compliance, and strengthens regulator trust.

Transfer Pricing Local Files For CFOs

For CFOs, the Local File provides assurance that local pricing and results align with group policy and financial performance. It reduces risks of adjustments, protects margins, and supports transparent reporting that enhances investor confidence and audit readiness.

Transfer Pricing Local Files For Tax Managers

For CFOs, the Local File provides assurance that local pricing and results align with group policy and financial performance. It reduces risks of adjustments, protects margins, and supports transparent reporting that enhances investor confidence and audit readiness.

For CEOs, maintaining accurate Local Files signals accountability and good governance. It demonstrates that the business operates transparently across markets, complies with OECD and local tax rules, and maintains a reputation for ethical and responsible global management.

Transfer Pricing Local Files For CEOs

Transfer Pricing Local File OECD Guidelines Reference

The OECD Transfer Pricing Guidelines (2022) and BEPS Action 13 require multinational enterprises to prepare a Local File for each jurisdiction with material related-party transactions. Chapter V outlines that the Local File must include detailed financial data, descriptions of controlled transactions, functional analyses, and applied transfer pricing methods. It complements the Master File by linking global policies to local implementation. Together, these documents ensure that profits are reported where value is created and that local authorities can verify compliance with the arm’s length principle.

Transfer Pricing Local File Requirements

The Local File must contain accurate, complete, and up-to-date documentation for every relevant intercompany transaction. Meeting these requirements ensures transparency, defensibility, and alignment with OECD and local regulations.

Transaction-Level Detail

The Local File must contain accurate, complete, and up-to-date documentation for every relevant intercompany transaction. Meeting these requirements ensures transparency, defensibility, and alignment with OECD and local regulations.

Functional and Risk Mapping

The Local File must include a full functional analysis covering functions performed, assets used, and risks assumed. This analysis connects local profitability to the value generated by the entity, ensuring transparency and alignment with global transfer pricing policies.

The Local File must include current benchmarking results that support the applied pricing method. Using reliable external comparables and explaining key adjustments ensures consistency with OECD requirements and strengthens audit defensibility.

Benchmarking and Comparability Studies

The Local File must align with the global Master File. Figures, narratives, and methods must match. Discrepancies between the two create audit exposure. Ensuring cross-file coherence demonstrates strong governance and a unified transfer pricing framework.

Consistency with the Master File

Timely Preparation and Submission

The Local File must be prepared and submitted within local statutory deadlines. Integrating documentation processes into the financial reporting cycle ensures timely compliance and readiness for tax authority review.

The Local File must be reviewed by tax, finance, and legal teams before submission. Coordinated oversight ensures data accuracy, consistent disclosures, and confidence that transfer pricing policies are properly implemented across business functions.

Cross-Functional Review and Approval