The OECD has announced a further short consultation on proposed changes to the transfer pricing rules or special measures for hard-to-value intangibles, which form part of its work on the Base Erosion and Profit Shifting (BEPS) project and relate to Action 8 on intangibles
The latest discussion draft sets out an approach to hard-to-value intangibles and proposes revisions to the guidance in Section D.3 of the 2014 BEPS report, guidance on transfer pricing aspects of intangibles.
The revised guidance explains the difficulties faced by tax administrations in verifying the arm’s length basis on which pricing was determined by taxpayers for transactions involving a specific category of intangibles.
The discussion draft also proposes an approach based on the determination of the arm’s length pricing arrangements, including any contingent pricing arrangements that would have been made between independent enterprises at the time of the transaction. This approach is applied when specific conditions are met and the OECD says it is intended to protect tax administrations against the negative effects of information asymmetry.
In April, the OECD published an earlier discussion draft on Action 8 which considered updates to the guidance on cost contribution arrangements, and says it wants to ensure all guidance on the topic is aligned.
The current consultation closes on 18 June 2015 and feedback should be sent by email to [email protected] in Word format.
A public consultation on the discussion draft and other topics will be held on 6-7 July 2015 at the OECD Conference Centre in Paris. Details of how to attend will be available on the OECD website shortly.
The OECD discussion draft on hard-to-value intangibles is available here
