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12.4.3. Documentation Requirements

Disclosure Requirements

Taxpayers exercising an activity in Mali as well as one or more other countries must file a notification with the Bamako Tax Office on an annual basis within 4 months from the closing of the tax year. The notification must outline the aggregate amount of profits realized in those other countries as well as breakdown of the income attributed to the Mali business.

In addition, where in the framework of a desk audit the tax administration suspects the existence of improper transfer prices, it may require the enterprise to produce information pertaining to:

a. The nature of the relationship between the enterprise and one or more non-resident enterprises;

b. The method used for determining the transfer prices in the industrial, commercial or financial transactions with such enterprises, including any elements in support of the method and a list of any compensation received in return;

c. The activities of the non-resident enterprises covered under (a) above to the extent relevant to the transactions covered under (b) above; and

d. The tax treatment of the operations conducted abroad whether by the enterprise or by non-resident enterprises in which it holds, directly or indirectly, the majority of capital or voting rights.

When lodging such a request, the tax authorities are required to clearly indicate for each type of activity or product, the country and entity concerned as well as, where applicable, the amounts involved. The taxpayer is required to respond within 1 month (which can be extended to a total of 3 months). Failure to supply the information entitles the tax authorities to adjust the transfer prices based on the information available to them or, failing that, by reference to free market conditions.

Standard Documentation

Enterprises which control or are controlled by non-residents (see “Definition of related parties” above) must keep a standard transfer pricing documentation substantiating their transfer pricing policy, to the extent they have had dealings with those related parties.

The documentation must include the following:

General Information on the Group of companies

This includes the following:

  • A general description of the activities of the group, including any changes that may have occurred during the audited fiscal years;
  • A general description of the group’s legal and organizational structure, including an identification of all group companies engaged in controlled transactions;
  • A description of the functions performed and risks assumed by related companies to the extent they impact the Mali enterprise;
  • A list of intangible assets held to the extent they relate to the Mali enterprise;
  • A general description of the group’s transfer pricing policy.

Specific Information on the Mali Enterprise

This includes the following:

  • A description of the activities of the enterprise including any changes that may have occurred during the fiscal years under audit;
  • A description of the transactions carried out with related parties including their nature and amounts (including royalties);
  • A list of any cost-sharing agreements as well as copies of any APAs or tax rulings related to transfer pricing to the extent they may affect the position of the enterprise;
  • A presentation of the method or methods used to determine the transfer price, including a justification of the appropriate nature of the method selected by reference to a comparative analysis; and
  • Where the method selected so requires, an analysis of the comparability elements deemed relevant in the situation.

The maintenance of the transfer pricing documentation described above does not release the enterprise from the obligation to substantiate the appropriate nature of any specific transaction.

The law does not specify whether the standard documentation must be kept contemporaneously. It only states that it must be made available at the start of a tax audit and, if not available or only partially available at that point in time, must be produced within one month.

In the absence of a standard documentation, the tax authorities are empowered to adjust the transfer prices based on the information available to them or, failing that, by reference to free market conditions. Also, the failure to produce the standard documentation following a request of the tax authorities, or the production of an incomplete documentation, entails the imposition of a penalty equal to 5% of profits deemed transferred abroad, with a minimum of CFA 5 million.

Additional Documentation for Dealings with Low-tax Jurisdictions

In case of transactions of any nature with enterprises established in low-tax or non-cooperative jurisdictions (see Sec. 6.5. for a definition), the transfer pricing documentation described above must, in addition, include copies of the financial statements, tax returns and related annexes for each involved related party. The documents required must be prepared as per the requirements and formats in force under the laws of Mali.

Country-by-Country Reporting

Mali has not yet adopted domestic legislation requiring the filing of Country-by-Country Reports. The country also has not yet adopted the OECD-council of Europe Mutual Assistance Convention.