Article 17 - Local File

A. A Taxable Person shall be required to maintain at all times, and, when requested in writing provide the Authority with all or any part of, a Local File containing detailed information on all Controlled Transactions of the Taxable Person. The Local File shall include:

1. Taxable Person’s information, including:
(a) a description of the management structure of the Taxable Person, its organization chart, a description of the individuals to whom the Taxable Person’s management reports and the countries in which such individuals maintain their principal offices;
(b) a detailed description of the business and business strategy pursued by the Taxable Person including an indication whether the Taxable Person has been involved in or affected by business restructurings or transfer of intangible property, in the current Reporting Year and the Reporting Year immediately preceding it, and an elaboration on aspects of such Transactions that affect the local entity and its key competitors;

2. Documentation on material Controlled Transactions. For Controlled Transactions in which the Taxable Person is involved generally, the following information should be included:
(a) a description of the Controlled Transactions (e.g. procurement of manufacturing services, purchase of goods, provision of services, loans, financial and performance guarantees, licenses of intangibles, etc.) and the context in which such Transactions take place;
(b) the amount of intra-group payments and receipts for each category of Controlled Transactions involving the Taxable Person (e.g. payments and receipts for products, services, royalties, interest, etc.) broken down by country of tax residence the foreign payer or recipient;
(c) an identification of Related Persons involved in each category of Controlled Transactions, and the relationships amongst them;
(d) copies of all intercompany agreements concluded by the Taxable Person;
(e) a detailed comparability and functional analysis of the Taxable Person and relevant Related Persons with respect to each documented category of Controlled Transactions, including any changes compared to prior years;
(f) an indication of the most appropriate transfer pricing method with regard to the category of Transaction and the reasons for selecting that method;
(g) an indication of which related Person is selected as the tested party, if applicable, and an explanation of the reasons for this selection;
(h) a summary of the important assumptions made in applying the transfer pricing methodology;
(i) if relevant, an explanation of the reasons for performing a multi-year analysis;
(j) a list and description of selected comparable Uncontrolled Transactions (internal or external), if any, and information on relevant financial indicators for independent enterprises relied on in the transfer pricing analysis, including a description of the comparable search methodology and the source of such information;
(k) a description of any comparability adjustments performed, and an indication of whether adjustments have been made to the results of the tested party, the comparable Uncontrolled Transactions, or both;
(l) a description of the reasons for concluding the relevant Transactions were priced on an arm’s length basis based on the application of the selected transfer pricing method;
(m) a summary of financial information used in applying the transfer pricing methodology; and
(n) a copy of existing unilateral and bilateral/multilateral Advance Pricing Agreements and other tax rulings to which the Authority is not a party and that relate to Controlled Transactions;

3. Industry analysis which provides complete and thorough analysis of the Taxable Person industry, including but not limited to:
(a) major competitors;
(b) SWOT analysis;
(c) power of suppliers;
(d) power of buyers;
(e) availability of substitutes;
(f) size;
(g) demand and supply trends;
(h) entry requirements;
(i) key international target markets;
(j) market share; and
(k) modes of delivery.

4. Financial information, including:
(a) Annual financial statements for the Reporting Year concerned of the Taxable Person. If audited financial statements exist, these should be supplied and if not, existing unaudited financial statements should be supplied;
(b) Information and allocation schedules showing how the financial data used in applying the transfer pricing method may be tied to the annual financial statements; and
(c) Summary of schedules of relevant financial data for comparables used in the analysis and the sources from which that data was obtained.

B. Upon request by the Authority, a Taxable Person must provide or make available to the Authority the Local File or the requested parts thereof within the time specified by the Authority in the request, provided that such time shall be no less than Thirty (30) days from the date of the request.