The Organisation for Economic Cooperation and Development (OECD) today released new guidance on the application of the approach to hard-to-value intangibles and the transactional profit split method under Action 8 and Action 10, respectively, of the base erosion and profit shifting (BEPS) project.
As noted in today’s OECD release, the follow-up work of the two reports was mandated by the OECD/G20 report Aligning transfer pricing outcomes with value creation (October 2015) as part of the final BEPS package. The report contained revised guidance—such as transfer pricing issues relating to transactions involving intangibles; contractual arrangements including the contractual allocation of risks and corresponding profits that are not supported by the activities actually carried out; the level of return to funding provided by a capital-rich multinational enterprise group member when that return does not correspond to the level of activity undertaken by the funding company; and other high-risk areas.
Read Revised guidance on the application of the transactional profit split method (BEPS Action 10)
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.