The OECD guidelines are a valuable source for Luxembourg taxpayers, since the Luxembourg transfer pricing rules are inspired by the OECD guidelines
The updated version of the “OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations” was released on 10 July 2017 (available here). They provide guidance on the application of the “arm’s length principle”—that is, the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises. The OECD guidelines provide a valuable source for Luxembourg taxpayers, since the Luxembourg transfer pricing rules are largely inspired by these OECD guidelines.
The 2017 edition of the transfer pricing guidelines mainly
reflects a consolidation of the changes resulting from the OECD/G20 base
erosion and profit shifting (BEPS) project, and incorporates the following
revisions of the 2010 edition into a single publication:
There is no new substantive content in the published version of the guidelines beyond what was already announced in the OECD BEPS Actions 8-10 and Action 13 final reports.
The formal publication of the guidelines should, however, enhance the legal standing of the OECD guidelines in Luxembourg, since the Luxembourg transfer pricing rules are largely inspired by and based on these OECD guidelines (see Article 56 and 56bis of the Luxembourg Income Tax Law). Therefore, Chapter I on “The Arm´s Length Principle” and Chapter III on the “Comparability Analysis” are of particular importance for multinational enterprises operating in Luxembourg.
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