The paper will be discussed in two parallel sessions on the last day of the Global Forum on Transfer Pricing meeting of 26–28 March 2014. 

This paper sets out and briefly discusses four possible approaches to addressing the concerns over the lack of data on comparables expressed by developing countries.

• Expanding access to data sources for comparables, including steps to improve the range of data contained in commercial databases, expand developing country access to such databases, and improve access to comparables data in developing countries with a significant number of sizeable independent companies.

• More effective use of data sources for comparables, including guidance or assistance in the effective use of commercial databases, the selection of foreign comparables, whether and how to make adjustments to foreign comparables to enhance their reliability, and alternative approaches to finding comparables.

• Approaches to identifying arm’s length prices or results without reliance on direct comparables, including guidance or assistance in making use of proxies for arm’s length outcomes, the profit split method, value chain analysis, and safe harbours, an evaluation of the impact, effectiveness and compatibility with the arm’s length principle of approaches such as the so called “sixth method”, which is increasingly prevalent particularly in developing countries in Latin America and Africa, and a review of possible anti-avoidance approaches.

• Advance pricing agreements and mutual agreement proceedings, including a review of developing country experiences with the pros and cons of advance pricing agreements and negotiations to resolve transfer pricing disputes, as well as guidance or assistance with respect to mutual agreement proceedings.

The paper is timely, relevant and addresses practical and administrative concerns addressed by developing countries, as well as discussion of the arm’s-length principle.  The items addressed should be considered in addressing Best Practices for transfer pricing documentation methodologies by taxpayers and tax authorities.