However, large Thai multinational enterprises (MNEs) with subsidiaries operating in countries that are members of the OECD and/or Group of 20 will find that they will still have to prepare group master files and country-by-country reports, in addition to local files, for those countries.

Under Tier 1 of the procedure, each member of an MNE will separately report its respective business and tax information to the country where it operates in a "local file".

Tier 2 is a "group master file" that will give an overview of an MNE's global business, with aggregate data from all of the countries where it operates.

Tier 3, the "country-by-country report" (CbCR), will provide a detailed picture of business results for each country where the MNE operates including number of employees, revenues, pre-tax profits and taxes paid.

Currently, Thai MNEs only need to prepare a local file to meet Thailand's requirements for transfer-pricing documentation.

The new documentation framework of the OECD and G20 "Base Erosion and Profit Shifting" (BEPS) project, aimed at increasing the transparency of MNEs' tax affairs, requires not only a local file but a master file and a CbCR.

The three-level reporting requirements apply to MNEs with group consolidated revenue of 750 million euros or more. Most of the OECD and G20 countries will apply these requirements for fiscal years beginning on or after January 1, 2016.

As a result, the ultimate parent of an MNE of such a country must have |a local file, a group master file, as |well as a CbCR to satisfy its resident country's requirements.

Each of its subsidiaries operating |in countries that also adopt the| three-tiered approach must have both a local file and group master file for the country in which it operates. The tax authorities of these countries will access the CbCR through an information-exchange channel arranged with the country of the ultimate |parent.

It would be a mistake to think that the additional layers of documentation requirements introduced by the OECD and G20 countries will not affect large Thai MNEs (that is, those with group consolidated revenue of 750 million euros or more). These countries will require local files and group master files from subsidiaries |of large Thai MNEs operating in their countries. Further, they could still |force the CbCR burden on to such |subsidiaries.

Let's take a large Thai MNE having a subsidiary in the Netherlands as an example. Although Thailand hasn't adopted the three-tiered approach, the Dutch Tax Administration would instead request a CbCR directly from the subsidiary.

Therefore, the Dutch subsidiary would need to prepare its Dutch local file. In addition, it must have the group master file and CbCR. This means the Thai ultimate parent must prepare a group master file and CbCR for its Dutch subsidiary - on top of a Thai local file to comply with Thailand's requirements.

Several countries have adopted documentation-related measures and/or penalties to ensure that non-compliance would be more costly than compliance.

Time is running out quickly for large Thai MNEs to put the right people and systems in place to gather|and document the necessary data |to comply fully with these transfer-pricing rules. This is not to mention |the impending disputes that |would arise once taxpayers' information becomes visible to the tax authorities.

Peerapat Poshyanonda, PricewaterhouseCoopers partner, and Panachai Anontanut, PwC associate director, contributed this article.