e-taxline alert

Master file and local file submission requirements finalised

Marcus Stelloh Marcus Stelloh

The South African transfer pricing submission requirements for a master file and local file have been finalised. The only change to the previous draft submission requirement is the effective date, which is now set as financial years starting on or after 1 October 2016 (instead of 1 January 2016). The master file and South African local file will have to be submitted to SARS 12 months after financial year end, meaning the first reports (files) are due to be submitted on 30 September 2018.

The overall threshold for master file and local file requirements stayed at R100 million. It’s important to keep in mind that the R100 million is the gross amount of all cross border related party inbound and outbound transactions added together and includes capital loan balances. In addition, there are also separate transfer pricing documentation retention requirements which should be considered together with the master file and local file requirements.

It may seem that there is still ample time to meet such deadlines, but a master file and local file project (and potentially additional info as per the transfer pricing documentation retention requirements) is time consuming. We recommend to start planning for such a project as soon as possible, especially, where no transfer pricing policy or previous transfer pricing report (file) is in place and this may be the first time you are undertaking such an exercise.

With the publication of the final regulations, South African multinational group companies are impacted and it is essential to understand the impact to minimise business interruptions. If you have any questions, or would like to discuss this further, please contact our Transfer Pricing team: