The State Administration of Taxation ("SAT") has recently released the Announcement on Clarifying Matters Concerning the Provision and Management of Master Files of Contemporaneous Documentation (the "Announcement"), with effect from May 20, 2018.
According to the Announcement, for a conglomerate required under relevant rules to prepare master files, if enterprises subordinate to the conglomerate fall under jurisdiction of two or more tax authorities, it may select the competent tax authority of any enterprise to provide master files voluntarily. When another enterprise affiliated to the conglomerate is required by its competent tax authority to provide master files, it may be exempt from the provision, after it has submitted a written report to its competent tax authority to explain that the conglomerate has voluntarily provided master files. Furthermore, it is made clear in the Announcement that, when the competent tax authority receives master files voluntarily provided by a conglomerate, it shall deal with these files differently in two situations, one of which is that, where enterprises subordinate to a conglomerate fall under jurisdiction of tax authorities in two or more provinces, autonomous regions, municipalities directly under the Central Government and cities separately listed in the State plan, the competent tax authority that has received the master files shall report the same level by level to the SAT, and the SAT will be responsible for managing these master files, unify the organization and coordination, and enable competent tax authorities of other enterprises within the conglomerate to access and use the master files depending on their demands.