The OECD’s base erosion and profit shifting (BEPS) final reports that focus on transfer pricing are comprised of a number of updates to different parts of existing OECD transfer pricing guidance. In particular, BEPS Actions 8-10 are designed to provide that transfer pricing outcomes are aligned with value creation, and BEPS Action 13 (country-by-country reporting) will enhance transparency.
The OECD’s transfer pricing-related guidance—with its strong focus on substance versus form and its consideration of when groups engage in transactions that would not, or would only rarely occur between third parties—is catching up with (and potentially overtaking) Australia’s already strengthened approach to transfer pricing rules under the newly introduced sub-division 815-B-D. Australia has demonstrated its eagerness to adopt these measures with a bill for country-by-country reporting pending before Parliament (and possibly being swiftly enacted and incorporated into law).
The guidance provided under BEPS Actions 8-10 would allow for amendments to the OECD’s transfer pricing guidelines, including the following:
Read an October 2015 report prepared by the KPMG member firm in Australia: Transfer Pricing in a BEPS world
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