9 March 2011 - The OECD’s Committee on Fiscal Affairs has launched a new project on the administrative aspects of transfer pricing. This work is regarded as important to strike a balance between the development of sophisticated guidance for complex transactions and the cost-effective use of taxpayers’ and tax administrations’ resources for improved compliance and enforcement processes.
This project includes the following:
• A survey is currently being conducted of the administrative simplification measures that countries have developed in the transfer pricing area. These include safe harbours as well as other types of measures such as alleviated documentation requirements for small transactions or small and medium sized enterprises, streamlined dispute prevention processes, etc. The survey covers OECD member countries as well as regular Observers to the Committee on Fiscal Affairs.
• An Internet-based platform for transfer pricing administration was developed by the OECD to facilitate the sharing of information and experience among tax officials on the administrative aspects of transfer pricing, including issues such as the organisation of transfer pricing audits, the development of risk assessment techniques, the design of transfer pricing documentation requirements, the setting up of Advance Pricing Arrangement programmes, etc.
• The OECD is reviewing the existing guidance on safe harbours in Chapter IV of the OECD Transfer Pricing Guidelines (“TPG”) with a view to possibly updating it in order to reflect the experience acquired since 1995.
The OECD is now inviting comments from interested parties on:
• Their experience with various forms of transfer pricing administrative simplification measures and their effectiveness;
• What the different types of regimes referred to as “safe harbours” are and how best to describe them and differentiate among them;
• The advantages and disadvantages of safe harbour rules and other forms of transfer pricing administrative simplification, in practice and from a policy perspective;
• Whether the existing guidance on safe harbours which is in Section E, Chapter IV of the TPG should be revised, and if so how.
Comments should be sent before 30 June 2011 in Word format to Jeffrey Owens, Director, CTPA (email@example.com).
Unless otherwise indicated by the commentators at the time of submission, the contributions received may be posted on the OECD Internet site.