Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘UN’

Webinar: Draft PCT toolkit on Tax Treaty Negotiations

The Toolkit on Tax Treaty Negotiation (the “Toolkit”), has been prepared in the framework of the Platform for Collaboration on Tax (the “PCT”) by the IMF, the OECD, the UN and the WBG (the “PCT Partners”).

Date and time:Wednesday, November 4, 2020 9:00 am 
Eastern Standard Time (New York, GMT-05:00) 
Change time zone
Duration:2 hours 30 minutes

Please join The Platform for Collaboration on Tax (PCT) for the public consultation webinar of its draft Toolkit on Tax Treaty Negotiations. The toolkit authors and expert speakers will discuss how the toolkit can help developing countries, followed by a demo of the interactive, web-based version of the toolkit and a feedback roundtable with experienced negotiators.

PCT’s draft Toolkit on Tax Treaty Negotiations is a joint effort to provide capacity-building support to developing countries on tax treaty negotiations, building on existing guidance, particularly from the UN Manual for the Negotiation of Bilateral Tax Treaties between Developed and Developing Countries (the “UN Manual”). The Toolkit provides tax officials with: 

***Information on the steps involved in tax treaty negotiations 
***Practical tips for treaty negotiators on the conduct of negotiations and negotiation styles 
***Easy access to already publicly available resources that treaty negotiators will find useful 

The design of the Toolkit also allows regular updates and improvements based on the feedback from users and experienced negotiators. 

The PCT released the draft toolkit for public feedback from June 29th to September 24th, 2020 through its website and the KSP-TA hub. In addition to written comments, this virtual workshop aims to gather further feedback from stakeholders, particularly treaty negotiating teams.

https://wbgevent.webex.com/mw3300/mywebex/default.do?nomenu=true&siteurl=wbgevent&service=6&rnd=0.2964609348962549&main_url=https%3A%2F%2Fwbgevent.webex.com%2Fec3300%2Feventcenter%2Fevent%2FeventAction.do%3FtheAction%3Ddetail%26%26%26EMK%3D4832534b00000004e753d26e18844be910684a57d2cf06cb46863f49e7e3440065bcc089bb5f018e%26siteurl%3Dwbgevent%26confViewID%3D173210721357697551%26encryptTicket%3DSDJTSwAAAAQ2PfZ9_0LQHDquM8bSPMFwOnX_BGfIOZOp41YWheqS6Q2%26

The Toolkit represents a joint effort to provide capacity-building support to developing countries on tax treaty negotiation, building on previous contributions and reducing duplication and inconsistencies.

https://www.tax-platform.org/news/event/public-consultation-workshop-draft-toolkit-tax-treaty-negotiations

https://www.tax-platform.org/sites/pct/files/publications/PCT_Toolkit_Tax_Treaty_Negotiations_Discussion_Draft.pdf?deliveryName=DM81743

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Tax Risk Management, Transfer Pricing

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UN: Digital service tax

The UN tax committee members have issued a proposal re: taxation of digital service income.  The proposal will be discussed in meetings later this year, making their way to become a part of the UN Model Tax Convention.

This will be an interesting dynamic, as the OECD is working diligently to finish their digital tax project this year.  It is hopeful that  both proposals will have a similar framework, avoiding a natural clash in methodology prone to dispute.

In summary, the UN and OECD digital tax proposals should be monitored to watch the progress, and changes prior to finalization envisioned by the end of this year.

Click to access TAX%20TREATY%20PROVISION%20ON%20PAYMENTS%20FOR%20DIGITAL%20SERVICES.pdf

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OECD / UN

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UN: Practical Manual on TP

As the OECD ventures forth in digital transactions and global minimum tax standards, it is always helpful to keep in  mind the UN Practical TP Manual for Developing Countries, which adheres to the arm’s-length principle.  Links to the Manual and the Committee of Experts on International Cooperation in Tax Matters are provided for reference.

In April 2019, a new chapter was added on Financial Transactions, Profit Splits and revised text on establishing Transfer Pricing Capability, Risk Assessment and Transfer Pricing Audits.

  • Attachment A: the proposed new Chapter B on Financial Transactions. The draft discusses the importance of corporate financing decisions within multinational groups and how those decisions could lead to tax base erosion. The Chapter discusses interaction with rules and measures against base erosion; common types of intra- group financial transactions and of group financing departments; the process of actual delineation and relevant characteristics of financial transactions; the process and system of credit rating; potential transfer pricing methods, including the use of simplification measures/safe harbours; different types of intra group loans and relevant characteristics; determining the arm’s length nature of intra-group loans; different types of intra group financial guarantees and relevant characteristics; determining the arm’s length nature of intra-group financial guarantees; and available methods. The chapter also discusses cash pooling practices and captive insurance, without getting into further detail on the delineation and arm’s length pricing of those specific transactions. Different types of intra-group loans are mentioned, and the draft identifies four steps to determine the arm’s length nature of intra-group loans: (i) analyse economically relevant characteristics; (ii) accurately delineate the entire transaction undertaken as well as (iii) selection and (iv) application, of the most appropriate transfer pricing method. 
  • Attachment B: Revision to the guidance contained in the Manual on the transactional profit-split method (Chapter B.3.3.) with the main focus being on seeking consistency of this guidance with the work done in the context of the Inclusive Framework on BEPS, while providing more practical examples.
  • Attachment C: A progress draft of the work on sections C.2. Establishing Transfer Pricing Capability in Developing Countries (previously C.5.); C.4. Risk Assessment (Previously part of C.3.) and C.5. Transfer Pricing Audits. The purpose is mainly to streamline the sequences of presentation and to eliminate overlaps in the current text.

Click to access 18STM_CRP1_Update-UN-Practical-Manual-on-Transfer-Pricing.pdf

https://www.un.org/esa/ffd/tax-committee/about-committee-tax-experts.html

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OECD / UN

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UN: Manual for Treaty Negotiations

As tax treaties become more important in the international tax landscape, for both developed and developing countries, it is important to review practical guidance provided to tax administrations to enforce such treaties.  This is a valuable primer for those involved in tax treaty interpretation and negotiation.  The recently released Manual is provided as a reference link.

The present publication, entitled United Nations Manual for the Negotiation of Bilateral Tax Treaties between Developed and Developing Countries (the Manual), aims at strengthening the technical expertise of developing countries’ tax officials as regards the negotiation of tax treaties.

It provides practical guidance to treaty negotiators in developing countries, in particular those who use the United Nations Model Double Taxation Convention between Developed and Developing Countries (the UN Model).

This Manual constitutes an introductory guide to tax treaty negotiations and, as such, provides general explanations on the way treaty negotiations are conducted and on the issues that are typically addressed during these negotiations. While it seeks to identify important issues that treaty negotiators should be aware of, it does not attempt to provide an exhaustive analysis of these issues. When preparing for treaty negotiations, the user of this Manual will therefore often need to go beyond the explanations provided in these pages and to further research the issues that are identified therein. keeping in mind that the detailed Commentaries on the provisions of the United Nations Model Double Taxation Convention between Developed and Developing Countries and of the OECD Model Tax Convention on Income and on Capital constitute the most authoritative source of information on the interpretation of these provisions.

Click to access manual-bilateral-tax-treaties-update-2019.pdf

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OECD / UN

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US int’l update

Monumental progress was recently made, in the form of 4 treaty protocols being approved; Luxembourg, Switzerland, Japan and Spain.  This will hopefully start a natural progression towards prompt treaty approvals/ratifications.

Additional Section 965, transition tax, FAQ’s were issued.  As you may recall, there was an infamous FAQ issued 13 April, 2018, whereby all overpayments from 2017 were deemed to be credited in their entirety to the 8 years, if elected, of transition tax liability. This important issue is still being contested, and am hopeful that HR 2985 calling for its proper reversal (i.e. IRS was wrong) will attract additional cosponsors and be an integral component of a tax technical corrections package that will be passed this year.

The 2019 United Nations (UN) tax treaty negotiation manual, attached for reference, was updated to reflect changes in the 2017 UN Model Treaty to include changes that resulted from the OECD’s base erosion and profit-shifting project.

Transfer pricing: IRS officials noted that completing the advance pricing and mutual agreement program’s (APMA’s) functional cost diagnostic model (FCDM) is a detailed process and taxpayers may want to submit the model form only in complex cases.

EY’s Global Tax Alert contains additional details, provided as reference.

Click to access 2019G_003420-19Gbl_Report%20on%20recent%20US%20international%20tax%20developments%20-%2019%20July%202019.pdf

Click to access manual-bilateral-tax-treaties-update-2019.pdf

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OECD / UN

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BEPS update-MLI’s, UN, ATAF…

EY’s Global Tax Alert highlights the recent BEPS developments, including the country-specific Multilateral Instruments (MLIs) with varying changes to its covered treaties and other treaty provisions.

It is noteworthy, at these MLIs approach legislation targets, that it is no longer intuitive as to how a country’s treaty provisions interact with other treaty partners, apart from general guiding principles that will vary as to the relevant details therein.

UN developments; In June 2019, the Report on the Eighteenth Session of the Committee of Experts on International Cooperation in Tax Matters (Committee), which was held by the United Nations (UN) on 23-26 April 2019 in New York, was released. The report describes a number of substantive issues related to tax cooperation in tax matters that were discussed during the session. Among others, the session addressed: (i) the next update of the UN Model Double Taxation Convention between developed and developing countries; (ii) the update of the UN Transfer Pricing (TP) Manual; (iii) dispute avoidance and resolution; and (iv) tax consequences of the digitalized economy.

African Tax Administration Forum (ATAF): In June 2019, the African Tax Administration Forum (ATAF) issued a paper on “The Place Of Africa In The Shift Towards Global Tax Governance: Can the taxation of the digitalised economy be an opportunity for more inclusiveness?” (the paper). The paper provides an overview of the current international tax governance landscape and inroads towards inclusiveness.

Country updates: Austria, Russia, Bulgaria, Canada, Finland, Guernsey, India, Ireland, Netherlands, Switzerland, Israel, China, Italy, Myanmar, New Zealand, Panama, Slovak Republic, Spain, Sweden, and Zimbabwe.

Click to access 2019G_003051-19Gbl_The%20Latest%20on%20BEPS%20-%2028%20June%202019.pdf

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OECD, OECD / UN

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UN: TP developments

The UN Transfer Pricing Subcommittee has provided a work designed to move forward its guidance in updating the UN Practical Manual on Transfer Pricing for Developing Countries.  The paper provides three attachments addressing:

  • Financial Transactions, a new chapter
  • Profit Splits, revised text
  • Establishing Transfer Pricing Capability, Risk Assessment and Transfer Pricing Audits, revised text

All three attachments are significant and timely issues, noting the EU and other countries similar emphasis on these topics.

The paper is a valuable read in understanding UN’s direction on the above issues, and is included as a referenced link.

Click to access 18STM_CRP1_Update-UN-Practical-Manual-on-Transfer-Pricing.pdf

Category:

OECD / UN, Transfer Pricing

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Offshore indirect transfers: TEI’s comments

On October 19, 2017, Tax Executives Institute (TEI) filed a letter with the Platform for Collaboration on Tax, a joint initiative of the World Bank, OECD, International Monetary Fund, and United Nations, regarding the Platform’s draft toolkit on the taxation of offshore indirect transfers.  TEI’s comments focused on the need for the Platform’s toolkit to educate and provide options to nations considering taxing offshore indirect transfers, rather than prescribing a preferred approach, among other things.

The Platform for Collaboration on Tax (the Platform), a joint initiative of the Organisation for Economic Co-Operation and Development, International Monetary Fund, United Nations, and World Bank, released a document entitled The Taxation of Offshore Indirect Transfers – A Toolkit (the Draft Toolkit or Toolkit) on 1 August 2017. The Draft Toolkit was designed to help developing countries address the complexities of taxing offshore indirect transfers of assets, which the Platform states is a practice by which some multinational corporations try to minimize their tax liability.

The toolkit and TEI’s submission paper are referenced herein for review

Highlights of TEI’s comments include the following points:

  • There should be symmetry and neutrality as compared to direct asset transfers
  • Status of toolkit is unclear, and is not a source of authoritative guidance
  • The goal of the draft toolkit is unclear
  • A capital gains tax can distort economic transactions
  • Gains and losses should be the subject of the toolkit
  • Most indirect transfers are made for economic, not tax, reasons
  • The general treaty definition of immovable property seems to have been abandoned with no reason

The toolkit can be applauded for launching a multi-organizational approach with some good ideas, although such ideas should be further challenged and developed prior to an overall vision and detailed rules promulgated

 

Click to access discussion-draft-toolkit-taxation-of-offshore-indirect-transfers.pdf

 

Click to access TEI-Comments-Offshore-Indirect-Transfers-Oct192017.pdf

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Tax Risk Management

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The Platform’s TP toolkit

On 22 June 2017, the “Platform for Collaboration on Tax” (the Platform) – a joint effort of the Organisation for Economic Co-operation and Development (OECD), United Nations (UN), International Monetary Fund (IMF) and World Bank Group (WBG) – released a toolkit (the Toolkit) designed to help developing countries address the lack of “comparables” for transfer pricing analyses and better understand mineral product pricing practices.

This Toolkit should also be reviewed by multinationals (MNEs) in developing countries to address the potential lack of comparables to better understand how the tax authorities will approach a transfer pricing audit.  The mining supplement is required reading for those working in that industry.

Additional toolkits will be forthcoming:

  • TP documentation
  • Indirect transfer of assets
  • Base eroding payments
  • Tax treaty negotiation capacity
  • Supply chain management
  • BEPS risk assessment

As the first edition of the Toolkit has now been published, it will be interesting to watch developing countries apply the tools prescribed, providing a baseline going forward.  All international tax practitioners should be familiar with this latest joint endeavor, as it is an indication of the shared resource approach that is now our future.

EY’s Global Tax Alert provides additional details, and the OECD Toolkit are referenced for review.

Click to access 2017G_04037-171Gbl_OECD%20UN%20IMF%20and%20World%20Bank%20issue%20toolkit%20for%20difficulties%20in%20accessing%20comparable%20data%20for%20TP%20analysis.pdf

Click to access toolkit-on-comparability-and-mineral-pricing.pdf

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OECD / UN

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UN: TP Manual for Developing Countries

The UN has published the second edition (First edition in 2013) of a transfer pricing manual for developing countries.

The world has changed considerably since 2013, notably affected by BEPS and the OECD’s  actions, including collaborating with developing countries.  However, the UN notes developing countries may not have the sophistication as other developed countries, and this manual provides valuable insight into the trends in this area.

The transfer pricing practices of Mexico, China and Brazil are also summarized in this edition.

The TP Manual is a “must read” for international tax practitioners to fully understand today’s complex dynamics that do not lead to global consistency or simplification.

Click to access UN-2017-Manual-TP.pdf

 

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OECD / UN

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India states its UN TP intent

The 2016 draft of the UN TP Manual includes India’s latest expression of alignment, as well as differing views from the OECD BEPS Actions 8-10 and 13.

Accordingly, the Indian tax administration is of the view that the guidance flowing from the final report of the BEPS project on Actions 8-10 should be utilized by both the transfer pricing officers (TPOs) and taxpayers in situations of ambiguity in interpretation of the law. However, India has not endorsed the guidance in the BEPS report pertaining to low value adding intra group services under Action 10 and has not opted for the simplified approach. Further, India has endorsed the recommendations contained in the BEPS final report on Action 13, which supported the three-tiered documentation regime comprising a Local File, a Master File and a Country-by-Country Report and has already carried out legislative changes in its domestic law.

India is known for its creativity, non-technical aggressive positions, and the number of years required to appeal initial assessments.  Some of these positions, currently in litigation and dispute, have been reiterated as a further stance in their hard line position on transfer pricing to enhance its economic fisc.  Accordingly, interested international tax practitioners should be cognizant of these positions, as other countries will surely “look and see” if such positions could also benefit their economic fisc similarly. 

EY’s Global Tax Alert is provided for reference.

Click to access 2016G_03873-161Gbl_TP_IN%20revises%20Cntry%20Cptr%20comments%20in%20UN%20Practical%20Manual%20on%20TP%20Issues%20for%20Dev%20Cntries.pdf

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Tax Risk Management

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UN: Corp. tax responsibility

Principles for Responsible Investment (PRI), a UN sponsored initiative, published a report entitled “Engagement Guidance on Corporate Tax Responsibility.”  The guidance is investor oriented addressing the conduct of corporate tax responsibility, disclosure, transparency and good tax risk governance.  Therefore, this report is a valuable reference to understand today’s trend of tax disclosure and transparency from an investor’s perspective, and how multinationals may be queried in the new world of international tax transparency.

A link is attached for reference:

Click to access PRI_Tax-Guidance-2015.pdf

Key points:

  • Earnings that rely on tax planning vs. economic activity are vulnerable to tax regulatory changes, earnings risk via strategies are increasing, and some Boards may be unaware of the effect that incentives have on tax planning.
  • Corporate sustainability officers should understand tax decisions and their impact on financial results and stakeholders, with alignment between tax strategies and sustainability commitments.
  • ” Companies should be able to defend how they allocate profit to each country both to tax authorities and the general public to avoid reputational risk and investor backlash.”
  • Before engaging with companies on tax practices, investors should understand various strategies, including IP transfers, financing, marketing service arrangements, principal structures, tax havens, shell companies and tax incentives, that are summarily explained. 
  • A step plan to engage companies:
    • Identify red flags, including a formula to measure tax gap
    • Questions for Senior Management/Board re: tax policy, tax governance, managing tax-related risk, effective tax rate, tax planning strategies including structure and IP rights, and country-by-country (CbC) reporting.  

Appendices are provided for additional reference of the OECD BEPS project, examples of good tax practices re: disclosures, summary of findings from discussions with Heads of Tax in eight multinational organisations, and a Glossary / Resources.

The report, in providing formulas and explanations, includes educational material for the investor community re: tax strategies and governance, while also providing examples of tax queries and good tax governance by many multinationals.

Best Practices:

The report should be used as a metric to assess readiness and alignment for these important topics that may be raised by stakeholders, both internal and external.  To the extent such questions have not been a primary focus, this report is an impetus to raise the priority threshold in addressing tax policies, strategies and governance in a very transparent world.  Additionally, it is also worthy to review the names of multinationals cited in the report for awareness and recognition.

 

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OECD / UN

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UN Tax Workshop, including BEPS Subcommittee

The UN organized its second workshop on “Tax Base Protection for Developing Countries” on 23 Sept. 2014.  The background materials for the workshop provide valuable insights into the roles that developing countries will continue to play, directly or indirectly, as a part of the OECD BEPS Action Plan.  The final outcome of the project will be a UN handbook.  The topics for the workshop were in parallel with the background materials, focusing on the following topics: (1) Preventing the artificial avoidance of PE status; (2) Neutralizing effects of hybrid mismatch arrangements; (3) Limiting interest deductions; (4) Taxation of capital gains; (5) Preventing tax treaty abuse; and (6) Transparency and disclosure.  Additional information, including the background materials, are referenced at the following link:

http://www.un.org/esa/ffd/tax/2014TBP2

This workshop, and its continuing developments, are significant in assessing whether the OECD Actions will be followed by developing and non-OECD countries in their recommended form and/or if a simpler, more direct application of international tax rules will be pursued.  All interested parties should be aware of these materials and the forthcoming UN handbook.

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OECD / UN

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Service fees & royalties: China’s SAT new (backward) focus

China’s State Administration of Taxation (SAT) issued an internal circular, instructing tax bureaus to review, and report, companies that have made large service fee or royalty payments between 2004 and 2013.  Tax bureaus will submit their findings to the SAT by September 15, 2014, followed by special investigations and potential tax adjustments.  The transfer pricing audit period is 10 years, thus the look-back period is within the statute of limitations.  The KPMG Tax Alert is provided for reference:

Click to access tp-china-aug25-2014.pdf

Key observations:

  • SAT’s commentary to the UN in April 2014 sets forth stricter guidelines for payment and deductibility than the OECD guidelines suggest (i.e., if the beneficiary is not in need of such services or the provider also benefits, then benefit by the service recipient alone is not justification).
  • Additionally, the SAT argues that the definition of shareholder services in the OECD Guidelines is too narrow.
  • Payments made to “tax haven” jurisdictions will receive special attention.
  • Economic substance in overseas entities will be reviewed.

Service fee and royalty payments are receiving global attention by tax authorities, although this retroactive review and narrow interpretation of deductible payments by the SAT will lead to additional assessments and the risk of double taxation going forward.  Multinationals should review transfer pricing documentation with respect to China, including the identification of any duplicative services as well as the benefits received from such services by major jurisdictions.

Category:

Transfer Pricing

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UN BEPS Questionnaire: Contrasting comments re: Arm’s length principle

The UN Subcommittee on Base Erosion and Profit Shifting (BEPS) Issues for Developing Countries has reiterated its request for comments to its BEPS Questionnaire, copied herein for reference.   Additional time is available for comments submitted by 8 August 2014.

The Subcommittee is mandated to draw upon its own experience and engage with other relevant bodies, particularly the OECD, with a view to monitoring developments on base erosion and profit shifting issues and communicating on such issues with officials in developing countries directly and through regional and inter-regional organizations.

Links to the Questionnaire and responses are provided.  Comments from Brazil, Mexico, Singapore, Christian Aid & Action Aid, and the Economic Justice Network and Oxfam South Africa are posted for review.

http://www.un.org/esa/ffd/tax/Beps/index.htm

Click to access BepsIssues.pdf

The wide divide in the role (and perception) of the arm’s length principle for transfer pricing is very apparent in the responses from Singapore and Christian Aid & Action Aid.

Actions 6 &  7: Singapore’s comments: 
“The continued correct application of the arm’s length principle to allocate profits based on function, assets and risks will help to ensure that profits are allocated based on where value is created.”  

“We would like to highlight that the focus on countering BEPS should be to grow the economic pie for every country, and not let the work be sidetracked by protectionism and development of rules for political expedience.”

Actions 8-10: Christian Aid & Action Aid’s comments:
“Transfer (mis-)pricing is a significant challenge to developing countries, and improvements to current rules need to take place to ensure developing countries can seek appropriate tax contributions from Transnational Corporations (TNCs).  The best solution may be outside of the arm’s length principle however, something that the OECD appears to not want to consider.  We believe that there should be more comprehensive research done into alternatives to the arm’s length principle and how effective they may be for developing countries.”

Questionnaire:

Countries’ experiences regarding base erosion and profit shifting issues.

Developing countries are invited to provide feedback by answering the following questions. Feedback (and any questions about the feedback requested) should be sent to taxffdoffice@un.org. The deadline for responses is 8 August 2014.

1. How does base erosion and profit shifting affect your country?

2. If you are affected by base erosion and profit shifting, what are the most common practices or structures used in your country or region, and the responses to them?

3. When you consider an MNE’s activity in your country, how do you judge whether the MNE has reported an appropriate amount of profit in your jurisdiction?

4. What main obstacles have you encountered in assessing whether the appropriate amount of profit is reported in your jurisdiction and in ensuring that tax is paid on such profit?

The Subcommittee have identified a number of actions in the Action Plan that impact on taxation in the country where the income is earned (the source country), as opposed to taxation in the country in which the MNE is headquartered (the residence country), or seek to improve transparency between MNEs and revenue authorities as being particularly important to many developing countries (while recognising that there will be particular differences between such countries). These are:  Action 4 – Limit base erosion via interest deductions and other financial payments  Action 6 – Prevent Treaty Abuse  Action 8 – Assure that transfer pricing outcomes are in line with value creation: intangibles  Action 9 – Assure that transfer pricing outcomes are in line with value creation: risks and capital  Action 10 – Assure that transfer pricing outcomes are in line with value creation with reference to other high risk transactions (in particular management fees)  Action 11 – Establish methodologies to collect and analyse data on BEPS and the actions to address it  Action 12 – Require taxpayers to disclose their aggressive tax planning arrangements  Action 13 – Re-examine transfer pricing documentation

5. Do you agree that these are particularly important priorities for developing countries?

6. Which of these OECD’s Action Points do you see as being most important for your country, and do you see that priority changing over time?

7. Are there other Action Points currently in the Action Plan but not listed above that you would include as being most important for developing countries?

8. Having considered the issues outlined in the Action Plan and the proposed approaches to addressing them (including domestic legislation, bilateral treaties and a possible multilateral treaty) do you believe there are other approaches to addressing that practices that might be more effective at the policy or practical levels instead of, or alongside such actions, for your country?

9. Having considered the issues outlined in the Action Plan, are there are other base erosion and profit shifting issues in the broad sense that you consider may deserve consideration by international organisations such as the UN and OECD?

10.Do you want to be kept informed by email on the Subcommittee’s work on base erosion and profit shifting issues for developing countries and related work of the UN Committee of Experts on International Cooperation in Tax Matters?

Do you have any other comments you wish to share with the Subcommittee about base erosion and profit shifting, including your experience of obstacles to assessing and then addressing the issues, as well as lessons learned that may be of wider benefit?

 

The insightful Questionnaire, as well as commentaries received, reflect the continuing conflict re: transfer pricing principles to be applied by developed and developing countries.  Additionally, unilateral requests for BEPS comments by countries also reflect the tendency to adopt OECD principles as adapted to local needs.

As a result, transfer pricing documentation will be inherently more complex and non-standardized, while controversies between tax authorities and multinational corporations will multiply significantly in magnitude and scope.

 

Category:

OECD / UN

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