Section 4 - GENERAL APPLICATION RULES AND REQUIREMENTS APPLICABLE TO MNES AND MEMBER STATES
26. WHERE DOCUMENTATION PRODUCED FOR ONE PERIOD REMAINS RELEVANT FOR SUBSEQUENT PERIODS AND CONTINUES TO PROVIDE EVIDENCE OF ARM’S LENGTH PRICING, IT MAY BE APPROPRIATE FOR THE DOCUMENTATION FOR SUBSEQUENT PERIODS TO REFER TO EARLIER DOCUMENTATION RATHER THAN TO REPEAT IT.
27. Documentation does not need to replicate the documentation that might be found in negotiations between enterprises acting at arm’s length (for example, in agreeing to a borrowing facility or a large contract) as long as it includes adequate information to assess whether arm’s length pricing has been applied.
28. The sort of documentation that needs to be produced by an enterprise that is a subsidiary enterprise in a group may be different from that needed to be produced by a parent company, i.e. a subsidiary company would not need to produce information about all of the cross-border relationships and transactions between associated enterprises within the MNE group but only about relationships and transactions relevant to the subsidiary in question.
29. It should be irrelevant for tax administrations where a taxpayer prepares and stores its documentation as long as the documentation is sufficient and made available in a timely manner to the tax administrations involved upon request. Taxpayers should, therefore, be free to keep their documentation, including their EU TPD, either in a centralized or in a decentralized manner.
30. The way that documentation is stored - whether on paper, in electronic form or in any other system - should be at the discretion of the taxpayer, provided that it can be made available to the tax administration in a reasonable way.
31. In well justified cases, e.g. where a MNE group has a decentralized organizational, legal or operational structure or consists of several large divisions with completely different product lines and transfer pricing policies or no inter-company transactions, and in the case of a recently acquired enterprise, a MNE group should be allowed to produce more than one masterfile or to exempt specific group members from the EU TPD .
