The OECD has released the 2017 edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. The Guidelines provide guidance on the application of the “arm’s length principle”.
The 2017 edition of the Transfer Pricing Guidelines mainly reflects a consolidation of the changes resulting from the BEPS Project. It incorporates the following revisions of the 2010 edition into a single publication:
- The substantial revisions introduced by the 2015 BEPS Reports on Actions 8-10 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 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;
- The revised guidance on safe harbours in Chapter IV. These changes were approved by the OECD Council in May 2013; and
- Consistency changes that were needed in the rest of the OECD Transfer Pricing Guidelines to produce this consolidated version of the Guidelines. These consistency changes were approved by the OECD’s Committee on Fiscal Affairs on 19 May 2017.
In addition, the 2017 edition of the Transfer Pricing Guidelines includes the revised Recommendation of the OECD Council on the Determination of Transfer Pricing between Associated Enterprises. The revised Recommendation reflects the relevance to tackle BEPS and the establishment of the Inclusive Framework on BEPS. It also strengthens the impact and relevance of the Guidelines beyond the OECD by inviting non-OECD members to adhere to the Recommendation. Finally, it includes a delegation by the OECD Council to the Committee on Fiscal Affairs of the authority to approve by consensus future amendments to the Guidelines which are essentially of a technical nature.
[OECD website – Update to Transfer Pricing Guidelines; LTN 129, 11/7/17]