INTM450040 | Transfer pricing records: frequency of review

The Master File and Local File must be reviewed and updated annually to determine whether the functional and economic analyses are accurate.

Where the business description, functional analysis, and/or description of comparables have not changed significantly they may be carried forward into the following period.

Database searches for comparables to support the pricing of material controlled transactions detailed in the Local File should be updated regularly, but this does not need to be annually if the operating conditions remain unchanged.

The requisite frequency of performing a new benchmarking study in cases where the operating conditions remain unchanged will depend on a range of factors, such as those outlined at paragraph 3.82 of the 2022 Transfer Pricing Guidelines. However, a functional change will necessitate fresh benchmarking.

Financial data for the comparables should be updated annually to apply the arm’s length principle reliably.

For controlled transactions covered by an APA, there is no requirement to update the comparables (see INTM450106).