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The Inland Revenue Department (IRD) issued Departmental Interpretation and Practice Notes No. 58 (DIPN 58) on July 19, 2019 setting out its clarifications on the application of transfer pricing (TP) documentation rules stipulated in the Inland Revenue (Amendment) (No. 6) Ordinance 2018 (the BEPS and TP Ordinance). The TP documentation requirements set out in the BEPS and TP Ordinance are consistent with the Organisation for Economic Co-operation and Development's (OECD's) three-tiered standardized approach which includes the Master File, Local File and Country-by-country (CbC) Report. The DIPN 58 specifies the IRD's views and practices on the above-mentioned three-tiered TP documentation in Hong Kong such as examples on applicability of exemption thresholds, administrative procedures, required content, etc.

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