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Master File: What is it and Who Must Prepare it

What is the Master File?

The Master File is one of the documents required by the Greek Tax Authorities in transfer pricing matters. The master file should provide an overview of the MNE group business, including the nature of its global business operations, its overall transfer pricing policies, and its global allocation of income and economic activity in order to assist tax administrations in evaluating the presence of significant transfer pricing risk.

What information should the Master File contain?

POL. 1097/2014, as amended by POL. 1144/2014, sets the contents that the Group TP documentation should include. The information required in the Master File provides a “blueprint” of the Multinational Entity (MNE) group and contains relevant information that can be grouped in five categories, as stated by the OECD Guidelines:

Corporate structure and information on the Group’s organization:

  • Corporate and organizational structure of the Group.
  • Identification of related entities that undertake controlled transactions affecting the taxpayer.

Activities of the Group:

  • A general description of the Group’s activities, description of the main geographic markets in which they operate, source of profit and value chain of the services and goods which represent at least 5% of the net Group’s revenue during the FY.
  • Description of the functions performed, risks assumed, and main assets owned by the different Group entities, including changes compared to the previous FY.
  • A description of the Group’s intercompany TP policy, which includes the method(s) used in order to determine the prices adopted by the Group.
  • Brief description of any service arrangements and/or cost sharing agreements entered between Group entities.
  • A description of any restructuring and acquisitions or licensing of relevant asset occurred during the fiscal year.

Intangibles:

  • A description of the Group’s strategy with respect to the development, property and exploitation of intangible assets, including the localization of the main facilities where any R&D activities are conducted, plus the management of those activities.
  • List of intangible assets relevant to TP, indicating its ownership and TP policy.
  • Amounts derived from the intragroup transactions involving the use of intangible assets, including the entities involved and their country of residence.
  • List of all agreements related to intangibles, including, the cost sharing, main R&D services or license agreements.
  • General description of any intangible transfer during the tax year, incorporating the entities, countries and amounts involved.

Financial and funding:

  • General description of the Group’s financing from third parties, including the main financing agreements signed with unrelated lenders/parties.
  • Identification of any members of the Group that provide/perform any financing functions/activities for the Group entities, including their country of incorporation, plus their place of effective management.
  • General description of the TP policy with respect to the intercompany financial agreements.

Financial and Tax position of the Group:

  • Group’s annual financial report, with consolidated financial statements.
  • List and brief description of the Group’s existing advance pricing agreements (APAs) and other tax rulings relating to the allocation of income among countries.

Who must prepare the Master File?

The Master File must be prepared by the Parent entity of the Group and be made available also to the Group entities. From a Greek TP perspective, there is no filing deadline; it should be available to the tax authorities until 30 days upon the related request.

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