In the context of increasingly stringent global tax transparency, especially with the implementation of BEPS Action 13 and the Global Minimum Tax (Pillar Two), the Master File is no longer just a formal compliance obligation. It has become the "backbone" of transfer pricing management systems, helping multinational corporations transparentize their value chains, control tax risks, and build consistent defense arguments against tax authorities in multiple countries. This article will analyze the role of the Master File in multinational corporations, from a legal and tax strategy perspective to risk management in 2025, helping businesses proactively protect profits and reputation globally.
What is a global profile?
Global Profile (international name: Master File) This is the central document in the transfer pricing dossier of a multinational corporation, used to describe the overall business operations, organizational structure, value chain, and transfer pricing policies at the group-wide level.
According to the OECD Transfer Pricing Guidelines (BEPS Action 13) and Decree 132/2020/ND-CPThe global dossier is one of the three mandatory pillars of the Transfer Pricing Dossier, which include:
- Master File (Global Profile): Provides a comprehensive overview of a multinational corporation.
- Local File (Country Profile): Detailed analysis of related-party transactions in each country.
- CbCR (Country-Based Profit and Loss Report): Shows the distribution of revenue, profits, and taxes among countries.
The core content of the Global Profile
A standard Global Profile 2025 must include five key information groups:
- Organizational structure: Legal ownership chart and geographical location of member units.
- Business operations description: Key profit-generating factors, supply chain, and internal service agreements.
- Intangible assets: How corporations develop, own, and exploit intellectual property.
- Internal finance operations: Methods of raising capital and lending policies within the corporation.
- Financial and Tax Position: Consolidated financial statements and existing tax agreements (APAs).
Understanding the concept of the Master File, which includes information on the organizational structure, business operations, intangible assets, financial activities, and tax position of a corporation, is fundamental to recognizing the strategic role of the Master File in multinational corporate governance, from value chain transparency to tax risk management and Pillar Two compliance.
The strategic role of global profiles in multinational corporations.
This is the core part that helps us understand why Master File is so important. The role of a global file in a multinational corporation is demonstrated through four main aspects:
Transparency in the Global Value Chain
Global records allow tax authorities to see the big picture of where profits are generated and where expenses are incurred. By 2025, tax authorities won't just be looking at invoices; they'll be looking at “real economic value.” Global records help corporations demonstrate that profits are allocated proportionally to the functions, risks, and assets each entity holds.
Effective tools for managing tax and transfer pricing risks.
By preparing a Master File, the corporation is forced to conduct a self-audit process. The role of the global file in a multinational corporation then acts as an early warning system. If there are unusual discrepancies in profit margins between countries with different tax rates, the corporation can adjust its pricing policy before being subject to heavy tax assessments and penalties by the tax authorities.
Develop a unified "Defense Map" for tax audits.
A major risk for corporations is conflicting information. If a subsidiary in Vietnam presents one version of events while the parent company in Japan reports something different, it's a "red flag" inviting an investigation. MasterFile ensures consistency in how the corporation tells its business story worldwide, thereby creating a strong defensive shield.
Support for compliance with the Global Minimum Tax Rate (Pillar Two).
With the global minimum tax requirement 15%, data in the Global File becomes a crucial reference source for calculating top-up tax. Synchronizing data between the Master File and Pillar Two reports is a top priority for CFOs in 2025 to avoid double taxation or reporting errors.
The detailed structure of a standard Global Profile for 2025.
To maximize the role of a global profile in a multinational corporation, the profile should be professionally structured as follows:
Chapter 1: Organizational Structure and Ownership
This chapter should not only list subsidiaries, but also clearly illustrate the flow of funds and the entities with ultimate control.
Chapter 2: Description of the Group's Business Operations
A thorough analysis of value drivers is needed. For example, in an electronics manufacturing corporation, does the value lie in R&D design or in low-cost assembly? Accurately describing the supply chain strengthens the argument for transfer pricing.
Chapter 3: Intangible Assets – DEMPE Analysis
In 2025, the term DEMPE (Development, Enhancement, Maintenance, Protection, Exploitation) will be mandatory. Corporations must provide accountability:
- Who develops (D) intellectual property?
- Who protects (P) and exploits (E)? Legal ownership without an operating entity would be considered illegal transfer pricing.
Chapter 4: Internal Financial Operations
This section describes agreements on centralized cash pooling, internal loans, and credit ratings of members. This area is frequently scrutinized by tax authorities regarding interest rates on loans.
Chapter 5: The Group's Financial and Tax Position
Provide consolidated financial statements and a list of countries where the corporation has entered into Advance Pricing Agreements (APAs) or has specific tax rulings.
Legal regulations in Vietnam and internationally.
Regulations in Vietnam
Vietnam has incorporated OECD standards into its domestic laws. According to Decree 132/2020/ND-CP, the exemption threshold for preparing transfer pricing documentation applies to cases falling under one of the following categories:
- Small revenue and transaction scale: Revenue under VND 50 billion and total value of related-party transactions under VND 30 billion during the tax period.
- APA Agreement: An Advance Pricing Agreement (APA) has been signed and the required Annual Report has been submitted.
- Simple function, low revenue: Revenue below VND 200 billion, performing simple functions, generating no revenue or expenses from the exploitation or use of intangible assets, and achieving a net profit margin (EBIT) before interest expenses and corporate income tax (EBIT) on revenue within the prescribed threshold (Distribution: from 5% onwards; Manufacturing: from 10% onwards; Processing: from 15% onwards).
- Appendix I must still be submitted with the corporate income tax return.
Important note if you are not eligible for an exemption:
- Taxpayers with related-party transactions must create and maintain a Global Record.
- Date of preparation prior to the corporate income tax settlement date Appendix I.
See details: Instructions for declaring global tax returns on the HTKK system.
Impact of Multilateral Litigation Agreements (MLIs)
The Multilateral Agreement on the Implementation of Measures Related to Tax Agreements to Prevent BEPS (MLI) is a major breakthrough. The MLI allows countries to amend thousands of Bilateral Tariff Avoidance Agreements (DTAs) simultaneously without having to renegotiate each bilateral agreement.
For the Global File, MLI promotes the automatic exchange of information and strengthens standards on the nature of business. This means that tax authorities in MLI signatory countries will have faster access to information in the Master File to review structures that shift profits to "tax havens". Vietnam has officially joined and implemented MLI, affirming its strong commitment to combating international tax evasion.
Challenges and solutions for businesses in 2025
Managing global records in the context of global transfer pricing presents numerous challenges for businesses, ranging from massive data volumes and high security requirements to constantly changing tax policies. To effectively address these challenges, businesses need to implement technological solutions and seek professional consulting. The table below summarizes the main challenges and their corresponding solutions:
| Challenge | Solution |
| Big data: Collecting information from hundreds of global branches is an operational nightmare. | Digital transformation in tax administration: Utilizing centralized data management software to synchronize transfer pricing information. |
| Confidentiality: Master files contain core business secrets (such as R&D strategies, etc.). | AI application: Using artificial intelligence to review anomalies in the financial reports of subsidiary companies. |
| Policy shifts: Countries are constantly adjusting their tax laws to gain the right to levy taxes in the context of Pillar Two. | We collaborate with reputable tax consulting firms (such as the Big4 and MAN – Master Accountant Network) to ensure that our Global Profile meets the requirements of local tax authorities. |
Implementing technological solutions and professional consulting not only helps businesses manage Master Files effectively, reduce data risks, and ensure legal compliance, but also optimizes operational processes and guarantees compliance with tax authority requirements in each market.
Conclude
Global Master File management is not only a mandatory legal requirement but also a crucial tool for businesses to optimize tax administration, reduce risks, and improve operational efficiency. By adopting digital transformation solutions, utilizing AI, and collaborating with reputable consultants, businesses can proactively address complex challenges. Contact MAN – Master Accountant Network for expert advice and implementation of the optimal Master File management solution for your business.
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
MAN Editorial Board – Master Accountant Network