TPG2022 Chapter VIII paragraph 8.9

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As indicated in paragraph 8.4, there is no difference in the analytical framework for analysing transfer prices for CCAs compared to analysing other forms of contractual relations. The guidance in Section D of Chapter I is relevant to the analysis of all transactions between associated enterprises, and applies to identify the economically relevant characteristics of the commercial or financial relations between the parties as expressed in a CCA. The contractual terms of the CCA provide the starting point for delineating the transaction between the parties and how the responsibilities, risks, and anticipated outcomes were intended to be allocated at the time of entering into the arrangements. However, as set out in that guidance, the evidence of the conduct of the parties may clarify or supplement aspects of the agreement. The framework for analysing risk in Section D. 1.2.1 of Chapter I is relevant to determining whether parties assume risks under the CCA, as discussed in Section C.2 of this chapter, and the consequences for providing funding without assuming risk or performing other functions. Chapter VI provides guidance regarding the determination of arm’s length conditions for transactions that involve the use or transfer of intangibles. Paragraphs 6.60 to 6.64 give relevant guidance on exercising control over the financial risk if the funding is used for investment in R&D projects. The guidance in Sections D.3 and D.4 of Chapter VI on hard-to-value intangibles is equally applicable to CCAs. Chapter VII provides guidance on issues that arise in determining for transfer pricing purposes whether services have been provided by a member of an MNE group to other members of that group and, if so, in establishing arm’s length prices for those intra-group services. This chapter’s objective is to provide supplementary guidance on situations where resources and skills are pooled and the consideration received is, in part or whole, the reasonable expectation of mutual benefits. Thus, the provisions of Chapters VI and VII, and indeed all the other chapters of these Guidelines, will continue to apply to the extent relevant, for instance in measuring the value of a contribution to a CCA as part of the process of determining the proportionate shares of contributions. MNEs are encouraged to observe the guidance of this chapter in order to ensure that their CCAs operate in accordance with the arm’s length principle.

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