Category: OECD Transfer Pricing Guidelines (2022)

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 24

The input from the BIAC will be discussed at the regular joint meetings between the BIAC and the Working Party ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 23

The aim of this element in the monitoring process is to keep the member countries informed about developments in each others’ countries. There are usually well established ways at the national level by which the business community can make an input into any developments in the transfer pricing legislation, regulations and administrative practices of a member country. At the level of the OECD, the BIAC will have an opportunity to bring to the attention of the Working Party changes in legislation or practices in both member and non-member countries, which it considered were inconsistent with the Guidelines or which it felt could give rise to practical problems in terms of implementation without, of course, referring to individual cases ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 22

The difficult case paradigms are intended to illustrate issues and situations where the Guidelines provide no or inadequate guidance. Practical examples when complete will be inserted into the Guidelines to provide illustrations of particular principles. There is a clear role for the business community in assisting in the development of paradigms or examples by contributing the practical experience of their members. The Working Party will ask for comments on both the difficult case paradigms and the practical examples at regular stages in their development. BIAC may also initiate paradigms or examples, provided the caveats in paragraph 17 of this annex are followed so that there can be no question of the process being used to resolve a particular transfer pricing case ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 21

It is also envisaged that once an issue or a country has been selected by the Working Party for further review, the BIAC will be notified of the decision so that they have the opportunity to comment. If the issue is one originally identified by the BIAC – particularly in the context of issue reviews – they would be kept informed of the Working Party’s discussion on these issues and asked, if necessary, to provide additional clarification. However, a further role for the BIAC in the peer review process beyond that already described is not contemplated at the moment ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 20

It is felt that one of the strengths of the peer review process is that the review is conducted solely by peers i.e. in this case the other member countries. That way the process is conducted in a positive and constructive manner so that best practice can be passed on and worse practice improved. However, the general guidance to the business community encourages them to identify problematic issues which may be suitable for further analysis and the Working Party will be able to take account of this input when making its final selection of issues for the revised peer review ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 19

In contributing to the OECD role of monitoring the implementation of the Guidelines, the business community would be encouraged to take particular note of the guidance given at paragraph 17 of this annex. It should therefore focus on issues that give rise to either theoretical or practical difficulties and not on specific and unresolved transfer pricing cases. However, it may be useful to illustrate a particular issue by reference to a hypothetical example. In constructing such an example, which could draw upon features taken from a number of real cases, care should be taken to ensure it remains hypothetical and does not resemble a current case, and that the features described should be restricted to the problematic issues concerned in order to avoid an impression of setting any general precedent for the resolution of an individual case ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 18

The Business Industry Advisory Committee (“BIAC”) will be invited to present practical difficulties in monitoring the application of the Guidelines to the Working Party for its consideration of the adequacy of the guidance provided in the Guidelines in relation to such areas, respecting confidentiality of the information ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 17

It is not intended that the OECD should intervene in the resolution of transfer pricing disputes between a taxpayer and a tax administration. The monitoring process is not intended to be a form of arbitration and so taxpayers will not be able to present individual cases for resolution by the Working Party. Nevertheless, as foreseen in the Guidelines and the Council Recommendation, the business community will be encouraged to identify problematic issues (preferably illustrated with practical but hypothetical examples) which raise questions about the internationally consistent application of the Guidelines ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 16

The foregoing monitoring procedures will parallel the development of additional hypothetical examples to be added to the Guidelines. The examples are not intended to develop new principles or to cover new issues but rather to assist in interpreting principles and in addressing difficult issues already discussed in the Guidelines. To ensure that they are of practical value and avoid being overly prescriptive the examples will be short, based on stated facts and relatively straightforward so that their scope is not so confined that the guidance they provide is of narrow and limited application. The examples will fall into two broad categories. The first will consist of illustrations of the application of the methods and approaches described in the Guidelines. The second set of examples will be designed to aid in the selection of a suitable transfer pricing method or methods. Although hypothetical, the examples will ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 15

The Secretariat will solicit from member countries reports on developments in their domestic transfer pricing legislation, regulations, and administrative practices, consistent with the invitation of the Council ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 14

The outcomes envisaged by the Working Party from the identification and analysis of difficult case paradigms could include the development of examples illustrating the application of the Guidelines in cases (identified for discussion) where the principles already contained within the Guidelines can be applied. It could also include identification of areas where the Guidelines could be amended to provide clearer guidance or where new material could be inserted into the Guidelines ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 13

Individual countries would take responsibility at meetings of Working Party No. 6 for leading discussions of the difficult case paradigms and of problematic areas that can be illustrated with practical examples ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 12

In the context of the regular meetings of tax inspectors organised by the Committee on Fiscal Affairs, the Working Party will arrange biennial meetings of tax examiners to discuss difficult case paradigms and to provide an input to any appropriate updates to the Guidelines. OECD will consider the difficult case paradigms only from the perspective of monitoring the application of the Guidelines ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 11

The first issue is the procedure to be used and the responsibility assigned for identifying the difficult case paradigms, focusing on issues and situations where the Guidelines may provide no or inadequate guidance or where member countries might be interpreting the Guidelines differently and therefore presenting obstacles to an internationally consistent application of the Guidelines. Member countries can identify areas where, in their view, the Guidelines might not address or adequately address a particular issue ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 10

A key aspect of monitoring will be to identify and then to analyse difficult fact patterns and problem areas which may be illustrated by practical examples and which present obstacles to an internationally consistent application of the transfer pricing methods set out in the Guidelines. Monitoring will also include areas where the Guidelines appear to offer no or inadequate guidance to tax authorities or taxpayers. All member countries will be actively involved in this process and recognise that resources will be required to ensure its success. The business community will also be involved in the monitoring (see Section C of this annex) ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 9

To improve the effectiveness of the peer review process it is essential that the reviews are undertaken selectively and concentrate on the areas of greatest difficulty in applying the Guidelines. The final decision to undertake any of the three types of review will be made by the full Working Party having regard both to the overall usefulness of any review to the work of the Working Party in monitoring the application of the Guidelines and to whether there are sufficient resources available to undertake the proposed review. It is important that any review, once undertaken, is completed to a high standard so that worthwhile conclusions can be drawn from it ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 8

Peer reviews will continue to be carried out but at three different levels: The first level would be an “issue review ”, which would look at the approach taken by all member countries to a particular issue of widespread significance. Ideally, the review should link up with other aspects of the monitoring process. For example, the best way to solve any problems emerging from such a review may be to analyse the issue in more detail by developing difficult case paradigms (see Section B.2 of this annex) or to develop practical examples for insertion in the Guidelines (see Section B.4 of this annex). The second level would be a “limited review” in that it would only look at the approach of a particular country or countries in relation to a specific and relatively narrow issue. The review would be carried out by two reviewers for ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 7

The peer review guidelines call for a report to be submitted to the Working Party for each reviewed country. The report covers the legal basis for dealing with transfer pricing issues, any country guidelines to direct enforcement practices, approaches commonly used to address a complex transfer pricing problem, administrative arrangements for handling transfer pricing cases, case law principles, and experience with data gathering and taxpayer documentation. The report also is to describe experiences with administrative approaches to avoiding and resolving transfer pricing disputes (e.g. mutual agreement procedure, advance pricing arrangements and safe harbours) ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 6

The Working Party No. 6 on Taxation of Multinational Enterprises (“the Working Party”) has been undertaking peer reviews of the transfer pricing practices of member countries over the course of the last few years. The peer reviews aim to gain detailed information on legislation, practices and experiences of transfer pricing in member countries. The Delegates of the Working Party jointly decide which country should be reviewed and which countries would conduct the review. The reviews follow guidelines approved by the Committee ... Continue to full case

TPG2022 Annex to OECD Transfer Pricing Guidelines paragraph 5

The monitoring process will be carried out through four related projects: 1. peer reviews of member country practices; 2. identification and analysis of difficult case paradigms; 3. review of changes in legislation, regulations, and administrative practices; and 4. development of examples. Each of these is discussed below ... Continue to full case