The OECD has released the 2017 edition of its transfer pricing guidelines, which have been updated to reflect the work carried out as part of its Base Erosion and Profit Shifting (BEPS) project to ensure that multinationals’ taxable profits are not artificially shifted out of some jurisdictions, and that their tax base reflects the economic activity undertaken in a particular country
The OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations provides detailed guidance on the application of the arm’s length principle. The 2017 edition mainly reflects a consolidation of the changes resulting from the BEPS project and incorporates a number of revisions of the 2010 edition into a single publication.
These include the substantial revisions introduced by the 2015 BEPS reports on actions 8-10 covering aligning transfer pricing outcomes with value creation, and Action 13 transfer pricing documentation and country-by-country reporting. These amendments, which revised the guidance in chapters I, II, V, VI, VII and VIII, were approved by the OECD Council and incorporated into the transfer pricing Guidelines in May 2016.
The updated guidelines also contain revisions to Chapter IX to conform the guidance on business restructurings to the revisions introduced by the 2015 BEPS Reports on Actions 8-10 and 13. These conforming changes were approved by the OECD Council in April 2017.
There is revised guidance on safe harbours in chapter IV. The OECD says there are a number of other consistency changes that were needed to produce this consolidated version of the guidelines, which were approved by the OECD's committee on fiscal affairs in May 2017.
In addition, this edition of the transfer pricing guidelines includes the revised recommendation of the OECD Council on the determination of transfer pricing between associated enterprises, and the establishment of the inclusive framework on BEPS.
The OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations is here.