On June 15, 2016 the OECD issued a press release announcing that already on May 23, 2016 the OECD Council approved the amendments to the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations ("Transfer Pricing Guidelines"), as set out in the 2015 BEPS Report on Actions 8-10 "Aligning Transfer Pricing Outcomes with Value Creation" and the 2015 BEPS Report on Action 13 "Transfer Pricing Documentation and Country-by-Country Reporting".
The amendments approved by the Council translate these BEPS transfer pricing measures into the Transfer Pricing Guidelines, as well as into the Recommendation of the Council on the Determination of Transfer Pricing Between Associated Enterprises.
The specific changes introduced in the Transfer Pricing Guidelines by these Reports are as follows:
· The current provisions of Chapter I, Section D of the Transfer Pricing Guidelines are deleted in their entirety and replaced by new guidance.
· Paragraphs are added to Chapter II of the Transfer Pricing Guidelines, immediately following paragraph 2.16.
· A new paragraph is inserted following paragraph 2.9.
· The current provisions of Chapter V of the Transfer Pricing Guidelines are deleted in their entirety and replaced by new guidance and annexes.
· The current provisions of Chapter VI of the Transfer Pricing Guidelines and the annex to this Chapter are deleted in their entirety and replaced by new guidance and annex.
· The current provisions of Chapter VII of the Transfer Pricing Guidelines are deleted in their entirety and replaced by new guidance.
· The current provisions of Chapter VIII of the Transfer Pricing Guidelines are deleted in their entirety and replaced by new guidance.
In its press release the OECD also announced that further work is being undertaken to make conforming amendments to the remainder of the Transfer Pricing Guidelines, in particular to Chapter IX "Transfer Pricing Aspects of Business Restructurings." According to the OECD this work is well advanced and it is expected that Working Party No. 6 of the Committee on Fiscal Affairs will soon invite interested parties to review the conforming changes to Chapter IX.
According to the OECD the conforming changes are expected to be approved later in 2016. Until then, it is stipulated that the provisions of the Transfer Pricing Guidelines should be interpreted to be consistent with those provisions of the Transfer Pricing Guidelines which have been amended by the 2015 BEPS Report on Actions 8-10 and 2015 BEPS Report on Action 13 and, in case of perceived inconsistencies, the modified provisions prevail.
Click here to be forwarded to the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2010 (so prior to incorporation of the changes as approved by the OECD Council on May 23, 2016) as available on the website of the OECD, which will open in a new window.
Click here to be forwarded to our very complete BEPS Library where you can very efficiently find many BEPS related documents, including the final reports referred to above.
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