The OECD has published details of the comments it received following its consultation earlier this year on its new Draft Handbook on Transfer Pricing Risk Assessment.

This is intended as a practical resource that provides clear and detailed steps that both developing and developed countries can take to assess the transfer pricing risk presented by an individual taxpayer's operations.

The Draft Handbook addresses a number of issues, including the questions that a tax administration should answer in a transfer pricing risk assessment process; how the tax administration can evaluate whether a taxpayer presents a material transfer pricing risk that justifies a detailed audit; where the tax administration can get the information necessary to identify and assess transfer pricing risk; how the tax administration can organise itself to carry out an effective risk assessment; and how the tax administration can most effectively interact with the taxpayer in assessing transfer pricing risk.

In their responses, both PwC and KPMG stated they felt the Draft Handbook should encourage tax administrations to share the results of the risk assessment with taxpayers to promote a more transparent and fair process.

PwC wrote: 'As currently drafted, paragraphs 147 and 148 state that businesses would welcome sharing risk assessment reports but stop short of recommending systematic sharing of reports in all circumstances. We strongly encourage a more definitive recommendation within the Draft Handbook.'

KPMG was equally strong in arguing that tax authorities should engage in an open dialogue with taxpayers during the risk assessment process and should share their transfer pricing risk assessment scoring system with taxpayers, saying: 'This would make the process more transparent for taxpayers and would encourage them to adopt transfer pricing policies and practices that are less likely to be considered high risk.'

KPMG also commented that sometimes the Handbook seemed 'closer to a guide on how to conduct an audit rather than focusing on the risk assessment part of the exercise', and wanted it to include a section outlining how tax authorities can monitor the use of their audit resources as it relates to transfer pricing to ensure that areas of potential waste are identified and corrected.

In its response, Deloitte highlighted the OECD's treatment of service transactions within the Draft Handbook which it said 'seems to cast a negative light on intra-group service transactions, a valid transaction type between members of a multinational group'.

Around 20 organisations sent letters detailing their views, including all the Big Four firms, leading law firms, economic research groups and overseas trade councils. These will now be discussed by the steering committee of the OECD Global Forum on Transfer Pricing at its November 2013 meeting.