The Inland Revenue Department
(“IRD”) issued Departmental
Interpretation and Practice Notes No. 58 (“DIPN
58”) on July 19, 2019 explaining the transfer
pricing documentation requirements in Hong Kong. The
requirements are consistent with three-tiered standardized transfer
pricing documentation approach published in the Transfer Pricing
Documentation and Country-by-Country Reporting, Action 13 –
2015 Final Report, which requires a master file, a local file, and
a Country-by-Country Report for applicable taxpayers in Hong
Kong. The IRD subsequently set up a web page on August 27 to
summarize the requirements in relation to master file and local
file.
Background
The transfer pricing regulatory regime mandates Hong Kong
entities to prepare transfer pricing documentation, namely master
file, local file and country-by-country report. This three-tiered
standardized approach requires a Hong Kong entity to articulate and
execute a consistent transfer pricing policy and
