Aligning transfer pricing outcomes with value creation, Actions 8-10 - 2015 final reports

Resource Information

The work Aligning transfer pricing outcomes with value creation, Actions 8-10 - 2015 final reports represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Books.

Label

Aligning transfer pricing outcomes with value creation, Actions 8-10 - 2015 final reports

Subject

• BEPS Project (OECD)
• OECD
• OECD Transfer Pricing Guidelines
• cost contribution arrangement
• developing countries
• intangibles
• risk
• transactional profit methods
• transfer pricing
• value creation

Language

eng

Summary

This work on transfer pricing under the BEPS Action Plan has focused on three key areas. Work under Action 8 looked at transfer pricing issues relating to transactions involving intangibles, since misallocation of the profits generated by valuable intangibles has contributed to base erosion and profit shifting. Work under Action 9 considered the contractual allocation of risks, and the resulting allocation of profits to those risks, which may not correspond with the activities actually carried out. Work under Action 9 also addressed the level of returns to funding provided by a capital-rich MNE group member, where those returns do not correspond to the level of activity undertaken by the funding company. Work under Action 10 focused on other high-risk areas, including the scope for addressing profit allocations resulting from transactions which are not commercially rational for the individual enterprises concerned (re-characterisation), the scope for targeting the use of transfer pricing methods in a way which results in diverting profits from the most economically important activities of the MNE group, and neutralising the use of certain types of payments between members of the MNE group (such as management fees and head office expenses) to erode the tax base in the absence of alignment with value creation. The work under Actions 8-10 of the BEPS Action Plan will ensure that transfer pricing outcomes better align with value creation of the MNE group. Moreover, the holistic nature of the BEPS Action Plan will ensure that the role of capital-rich, low-functioning entities in BEPS planning will become less relevant. As a consequence, the goals set by the BEPS Action Plan in relation to the development of transfer pricing rules have been achieved without the need to develop special measures outside the arm's length principle. Further work will be undertaken on profit splits and financial transactions. Special attention is given in the Report to the needs of developing countries. This new guidance will be supplemented with further work mandated by the G20 Development Working Group, following reports by the OECD on the impact of base erosion and profit shifting in developing countries. Finally, the interaction with Action 14 on dispute resolution will ensure that the transfer pricing measures included in this Report will not result in double taxation

Geographic coverage

International

Index

no index present

Language note

English

Literary form

non fiction

Series statement

OECD/G20 Base Erosion and Profit Shifting Project

Series volume

Action 8-10: 2015 final reports