Strategizing Multinational Tax Risks

The UN Committee of Experts on International Cooperation in Tax Matters published the UN Practical Manual on Transfer Pricing for Developing Countries in 2012.  A new Subcommittee was formed on Article 9, Associated Enterprises, which will draft additional chapters on intra-group services, management fees and intangibles.  The letter for assistance is referenced herein:

Click to access InputUNTPmanual.pdf

The Subcommittee invites input into the Manual for this drafting exercise, and aims to consider such comments in the update of the Manual.  Input from developing countries in particular is requested, and non-governmental organizations and academics in the policy and administration of transfer pricing, to provide clear and workable guidance.

The letter reiterates the operation of Article 9 of the UN Model Convention and the arms-length principle embodied therein.

As stated at the conclusion of the letter, “As agreed during the 2013 Annual Session of the UN Committee, wide input is sought into the next update of the Manual to ensure its effectiveness for developing countries seeking to address transfer pricing issues in accordance with Article 9.”

Written input is requested no later than 28 February 2014, with any questions addressed to Michael Lennard, Secretary of the UN Tax Committee.  

This request aids transparency, and comprehensive understanding, into the evolving issues of intra-group services, management fees and intangibles.

All multinationals should consider this important request, and follow developments of the UN Committee as it receives comments and drafts additional guidance.  It is noted that the letter sought to emphasize the arms-length principle of transfer pricing.