The OECD is consulting on outline guidance on the approach to pricing transfers of hard-to-value intangibles (HTVI) described in its transfer pricing guidelines, which is one of the requirements of its Base Erosion and Profit Shifting (BEPS) action plan
The final report on actions 8- 10 of the BEPS action plan, Aligning Transfer Pricing Outcomes with Value Creation, mandated the development of guidance on the implementation of the approach to pricing HTVI contained in Section D.4 of Chapter VI of the OECD guidelines.
The OECD says this guidance protects tax administrations from the negative effects of information asymmetry by ensuring that tax administrations can consider ex post outcomes as presumptive evidence about the appropriateness of the ex-ante pricing arrangements. At the same time, the taxpayer has the possibility to rebut such presumptive evidence by demonstrating the reliability of the information supporting the pricing methodology adopted at the time the controlled transaction took place.
The discussion draft presents the principles that should underline the implementation of the approach to HTVI, provides examples illustrating the application of this approach, and addresses the interaction between the approach to HTVI and the mutual agreement procedure under an applicable treaty. It is not concerned with the approach to pricing HTVI agreed under BEPS action 8, which already been formally agreed, but is focused on guidance to implement this.
Interested parties are invited to send comments by 30 June 2017 by e-mail to TransferPricing@oecd.org in Word format.
Base Erosion and Profit Shifting (BEPS) Public Discussion Draft BEPS Action 8 Implementation Guidance on Hard-to-Value Intangibles is here.