Transfer pricing

OECD meets with business commentators on the scoping of its project on the transfer pricing aspects of intangibles


10 November 2010 -- Almost 50 contributions were received from the public in response to the OECD’s July 2010 call for comments on the scoping of the new project on the Transfer Pricing Aspects of Intangibles to be undertaken in 2011 by the Committee on Fiscal Affairs’ Working Party No. 6 on the Taxation of Multinational Enterprises (“WP6”).


On 9 November 2010, WP6 met with commentators from the private sector to discuss the comments received and the scoping of this project. The agenda for the day and presentation material used by commentators have now been published.


In her opening remarks, the Chair of WP6, Ms. Michelle Levac, indicated that this new OECD project would be carried out by a Special Session of WP6 on the Transfer Pricing Aspects of Intangibles, open to all interested member countries and non member country observers and set up for this particular work. This would be a process similar to the one used by WP6 for completing its business restructuring project and its review of comparability and profit methods, which resulted in 2010 changes to the OECD’s Transfer pricing (“Transfer Pricing Guidelines”). WP6 is aware of the importance of obtaining input from the business community at the early stages of this work, and further consultations with commentators will take place as the project progresses and substantive issues are discussed. In addition, WP6 is seeking further involvement of non-OECD economies, recognising that some of them have encountered significant issues in relation to the transfer pricing aspects of intangibles.


The Chair highlighted the critical importance for the OECD of carefully scoping this project to ensure that efforts are focused on the most important issues and the ones on which progress can be made towards better guidance. The overarching goal is to provide more clarity and certainty for taxpayers and governments and greater international consensus, thus minimising the risks of double taxation. Setting the scene for such an undertaking, she noted that the intention of the Working Party is not to reopen issues that were resolved in the revised and new guidance included in the Transfer Pricing Guidelines in 2010.

Mr. Chris Lenon, Chair of the Tax Committee of the Business and Industry Advisory Committee to the OECD (“BIAC”), said that BIAC was very grateful for the opportunity for the business community to discuss the scope of this very important project. BIAC believes that the best OECD work in the field of taxation is that work which comes from a partnership between governments and business in arriving at an international consensus and BIAC is willing to engage in this partnership. Highlighting the importance of avoiding double taxation arising from transfer pricing disputes, Mr. Lenon welcomed the statement of the Chair of WP6 in this respect and the participation of non-OECD economies in this project. Mr. Lenon said that BIAC would want this work to lead to a timely update of the Transfer Pricing Guidelines, ideally based on a set of principles built on consensus and illustrated with some examples. From the perspective of BIAC, this project would prove successful if principles were articulated for the transfer pricing treatment of intangibles that were understandable and agreed by the business community and the countries involved.


In her closing remarks, the Chair of WP6 thanked all the commentators for their participation in the scoping of the new OECD project and the participants in this meeting for their very open and informative discussions. She indicated that the OECD would release on the Internet, probably in January 2011, information on the decisions that will be made on the scope of the project. The Special Session on the Transfer Pricing Aspects of Intangibles will start substantive discussions of the issues included in the scope of its project at its next meeting in March 2011 and hopes to be able to release a discussion draft for public comment towards the end of 2013.


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