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OECD Issues Updates To TP Guidelines For MNEs and Tax Administrations

Friday 18th August 2017

The OECD has recently issued the 2017 edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.

The OECD TP Guidelines provide guidance on the application of the “arm’s length principle”, which represents the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises. The latest Guidelines mainly reflect a consolidation of the changes resulting from the OECD/G20 BEPS Project and incorporates the following revisions of the 2010 edition into a single publication:

  • The substantial revisions introduced by the 2015 BEPS Reports on Actions 8-10 [Aligning Transfer Pricing Outcomes with Value Creation] and Action 13 [ Transfer Pricing Documentation and CbC Reporting], and these amendments, which revised the guidance in Chapters I, II, V, VI, VII and VIII, were approved by the OECD Council and incorporated into the Transfer Pricing Guidelines in May 2016;
  • The revisions to Chapter IX to conform the guidance on business restructurings to the revisions introduced by the 2015 BEPS Reports on Actions 8-10 and 13 and these conforming changes were approved by the OECD Council in April 2017;
  • The revised guidance on safe harbours in Chapter IV, which were approved by the OECD Council in May 2013; and
  • Consistency changes that were needed in the rest of the OECD Transfer Pricing Guidelines to produce this consolidated version of the Guidelines and these were approved by the OECD’s Committee on Fiscal Affairs on 19 May 2017.

The latest edition of the TP Guidelines also includes the revised Recommendation of the OECD Council on the Determination of Transfer Pricing between Associated Enterprises [C(95)126/FINAL], which  reflects the relevance to tackle BEPS and the establishments of the Inclusive Framework on BEPS. It also strengthens the impact and relevance of the Guidelines beyond the OECD by inviting non-OECD members to adhere to the Recommendation.

In addition, it includes a delegation by the OECD Council to the Committee on Fiscal Affairs of the authority to approve by consensus future amendments to the Guidelines which are essentially of a technical nature.

If you would like further information on the above, please contact Keith Rushen on 0207 486 2378.

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