Transfer pricing

Discussion Draft of the Proposed Modifications to Chapter VII of the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services


03/11/2014 – Action 10 of the 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.

discussion draft of proposed modifications to Chapter VII of the Transfer Pricing Guidelines relating to low value-adding intra-group services was released for comment by interested parties today. This document is also available in French and Spanish.


The discussion draft reduces the scope for erosion of the tax base through excessive management fees and head office expenses by proposing an approach which identifies a wide category of common intra-group services commanding a very limited profit mark-up on costs, applies a consistent allocation key for all recipients, and provides greater transparency through specific reporting requirements.

Interested parties are invited to submit written comments by 14 January 2015 (no extension will be granted) and should be sent by email to in Word format (in order to facilitate their distribution to government officials). They should be addressed to Andrew Hickman, Head of Transfer Pricing Unit, Centre for Tax Policy and Administration. It is preferred that comments be provided in separate text containing references to paragraph numbers of the discussion draft, rather than in the form of a mark-up of the text of the Discussion Draft itself.

Please note that all comments received regarding this discussion draft will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective, or the person(s) on whose behalf the commentator(s) are acting.


Public consultation meeting

The OECD intends to hold a further public consultation on the discussion draft and other topics on 19-20 March 2015 at the OECD Conference Centre in Paris, France. Registration details for the public consultation will be published on the OECD website in due time. Speakers and other participants at the public consultation will be selected from among those providing timely written comments on the discussion draft.