Following last week’s progress update on the project as a whole, the OECD has released another discussion draft on further enhancements to the actions in its Base Erosion and Profit Shifting (BEPS) action plan, relating to amendments to transfer pricing guidelines, along with a timetable for stakeholder comments.
The most recently published discussion draft deals with work in relation to Actions 8, 9, and 10 (‘Assure that transfer pricing outcomes are in line with value creation’) and is focused on risk, recharacterisation and special measures.
The discussion draft includes proposals to emphasise the importance of accurately delineating the actual transactions, and include guidance on the relevance and allocation of risk, determining the economically relevant characteristics of the controlled transaction, and on recharacterisation or non-recognition of transactions.
It also sets out options for some special measures, as envisaged in the BEPS Action Plan with regard to intangible assets, risk and over-capitalisation. A series of questions relating to all the options has been set out, and responses to these questions will be taken into account when considering the appropriateness and design of each option.
Interested parties are invited to submit written comments by 6 February 2015 by email to TransferPricing@oecd.org. There is to be a public consultation on the discussion draft and other topics on 19-20 March 2015 at the OECD Conference Centre in Paris.
A timetable showing all OECD discussion drafts for the BEPS project and the deadlines for stakeholder input is available here: http://www.oecd.org/ctp/discussiondrafts.htm