Guidelines for multinational enterprises

OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2010

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Published on August 16, 2010

Also available in: German, Spanish, French, Hungarian, Italian, Slovene, Serbian, Ukrainian


The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations provide guidance on the application of the “arm’s length principle”, which is the international consensus on transfer pricing, i.e. on the valuation, for tax purposes, of cross-border transactions between associated enterprises. In a global economy where multinational enterprises (MNEs) play a prominent role, transfer pricing is high on the agenda of tax administrators and taxpayers alike. Governments need to ensure that the taxable profits of MNEs are not artificially shifted out of their jurisdictions and that the tax base reported by MNEs in their respective countries reflect the economic activity undertaken therein. For taxpayers, it is essential to limit the risks of economic double taxation that may result from a dispute between two countries on the determination of an arm’s length remuneration for their cross-border transactions with associated enterprises.

After having been originally published in 1979, the OECD Transfer Pricing Guidelines were approved by the OECD Council in their original version in 1995. A limited update was made in 2009, primarily to reflect the adoption, in the 2008 update of the Model Tax Convention, of a new paragraph 5 of Article 25 dealing with arbitration, and of changes to the Commentary on Article 25 on mutual agreement procedures to resolve cross-border tax disputes. In the 2010 edition, Chapters I-III were substantially revised, with new guidance on: the selection of the most appropriate transfer pricing method to the circumstances of the case; the practical application of transactional profit methods (transactional net margin method and profit split method); and on the performance of comparability analyses. Furthermore, a new Chapter IX, on the transfer pricing aspects of business restructurings, was added. Consistency changes were made to the rest of the Guidelines.


The Arm's Length Principle
Transfer Pricing Methods
Comparability Analysis
Administrative Approaches to Avoiding and Resolving Transfer Pricing Disputes
Special Considerations for Intangible Property
Special Considerations for Intra-Group Services
Cost Contribution Arrangements
Transfer Pricing Aspects of Business Restructurings
Annex to the OECD Transfer Pricing Guidelines
Annex I to Chapter II. Sensitivity of Gross and Net Profit Indicators
Annex II to Chapter II. Example to Illustrate the Application of the Residual Profit Split Method
Annex III to Chapter II. Illustration of Different Measures of Profits When Applying a Transactional Profit Split Method
Annex to Chapter III. Example of a Working Capital Adjustment
Annex to Chapter IV. Guidelines for Conducting Advance Pricing Arrangements under the Mutual Agreement Procedure (“MAP APAs”)
Annex to Chapter VI. Examples to Illustrate the Guidance on Intangible Property and Highly Uncertain Valuation
Appendix. Recommendation of the Council on the Determination of Transfer Pricing between Associated Enterprises [C(95)126/Final]
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