On 4 December 2017, the Austrian Finance Ministry (BMF) published information on the interpretation of doubtful questions of the Documentation Act (VPDG) and the ordinance issued thereto (VPDG-DV).
The report on BEPS Action 13, the EU Mutual Assistance Directive and the OECD Guidelines for the Implementation of CbC Reporting should be used as a supplement.
The BMF information mainly deals with questions regarding the CbCR. However, we have limited ourselves below to clarifications regarding the Master File and Local File:
- Sales revenue: The Master and Local File are to be prepared if the sales revenue of the Austrian group of companies has exceeded the amount of EUR 50 million in the two previous financial years. The term "sales revenue" is based on the definition of the Austrian Commercial Code (UGB) or comparable accounting principles.
- Other documentation requirements: For business units that do not exceed the thresholds, there is no obligation to adhere to the prescribed structure under VPDG and VPDG-DV.
- Relationship with the EU Code of Conduct: The national implementation of the Master and Local File complies with OECD and EU guidelines and should be understood as a national "minimum standard".
- Transmission of copies: In the case of a request for the transmission of the Master and Local File, the required copies are to be attached (unsolicited).
- Materiality: The characteristic of materiality can only be determined on a case-by-case basis from the overall picture of the circumstances.
- Level of detail of the information: The benchmark is the diligence of a proper and conscientious manager.
- Description of business: In the case of a presentation according to business lines, the entire Master File with all business lines must be available in each state. It is not permissible to include only those business units that have an international connection.
- Presentation of the supply and service chain: The five largest products or services offered are measured by turnover. Group turnover is decisive, which is why a consolidated result is to be assumed.
- National transactions: Purely national intra-group transactions are usually not documented in the Local File.
- Business transactions to be documented: Only material intra-group business transactions are to be documented.
- Amount of payments: The information can be delivered not only on a payment basis but also on a transaction/business transaction basis. In the case of bookkeeping according to the principle of realisation, the concept of "payments" should be understood in the same way as for the principle of realisation.
- Financial information – financial statements: With regard to the financial data used for the application of transfer pricing methods (OM data, gross profit, cost plus), it must be documented to what extent these financial data are based on the annual financial statements. When presenting the breakdown for the profit split, it must be clear at which point in the annual financial statements the financial data used for the application of the transfer pricing method can be found.