The Organisation for Economic Cooperation and Development (OECD) today announced that the OECD Council has approved the incorporation of certain base erosion and profit shifting (BEPS) amendments into the OECD’s Transfer Pricing Guidelines.
As explained by today’s OECD release, the BEPS amendments—specifically, BEPS Actions 8-10, “Aligning transfer pricing outcomes with value creation,” and BEPS Action 13, “Transfer pricing documentation and country-by-country reporting”—have been implemented into the Transfer Pricing Guidelines and also into the Council’s recommendation for determining transfer pricing between related (associated) enterprises.
The specific changes introduced in the Transfer Pricing Guidelines are as follows:
The OECD release states that additional work is being undertaken to make conforming amendments to the remainder of the Transfer Pricing Guidelines, in particular to Chapter IX, “Transfer pricing aspects of business restructurings." It is expected that Working Party No. 6 of the Committee on Fiscal Affairs will invite interested parties to review the conforming changes to Chapter IX to establish that inconsistencies with the revised parts have been appropriately addressed, and duplication appropriately removed.
The conforming changes are expected to be approved later in 2016. Until then, the provisions of the Transfer Pricing Guidelines are to be interpreted to be consistent with the provisions of the Transfer Pricing Guidelines that have been amended to reflect BEPS Actions 8-10 and BEPS Action 13. In instances of perceived inconsistencies, the modified provisions are to prevail.
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