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OECD: Low value-adding intra-group services (BEPS Action 10)

Low value-adding intra-group services (BEPS Action 10)

The Organisation for Economic Cooperation and Development today released a discussion draft of the proposed modifications to Chapter VII of the OECD Transfer Pricing Guidelines relating to low value-adding intra-group services.


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Action 10 of the OECD’s action plan on base erosion and profit shifting (BEPS) directs the OECD to develop transfer pricing rules to provide protection against common types of base eroding payments, such as management fees and head office expenses.

The discussion draft [PDF 837 KB] was released today for comment by interested parties.

According to a related OECD release, the measures proposed in the discussion draft would reduce the scope for erosion of the tax base through excessive management fees and head office expenses by proposing an approach that identifies a broad range of common intra-group services that command a very limited profit mark-up on costs, applies a consistent allocation key for all recipients, and provides greater transparency through specific reporting requirements.

Comments are due by 14 January 2015. The OECD announced that it intends to hold a further public consultation on the discussion draft and other topics on 19-20 March 2015.

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