The Administrative Aspects of Transfer Pricing
The OECD launched a new project on the administrative aspects of transfer pricing to strike a balance between the development of sophisticated guidance for complex transactions and the cost-effective use of taxpayers’ and tax administrations’ resources for improved compliance and enforcement processes.
In Taxand's response to this consulation paper we discuss:
- Our experience with various forms of transfer pricing administrative simplification measures and their effectiveness
- How best to describe and differentiate the different types of regimes referred to as “safe harbours”
- The advantages and disadvantages of safe harbour rules and other forms of transfer pricing administrative simplification, in practice and from a policy perspective
- Should the existing guidance on safe harbours which is in Section E, Chapter IV of the TPG be revised, and if so how?
Using local examples Taxand France, Taxand India, Taxand Italy, Taxand Spain, Taxand UK and Taxand US illustrate how the adminstrative aspects of transfer pricing can be addressed to benefit multinationals.
From a general standpoint Taxand believes that the arm’s length principle should prevail in any case and that safe harbour provisions should not conflict with this well-established principle. Safe harbour rules should be sought where the application of the arm’s length principle is commonly agreed and thus would be consistently applied by the involved jurisdictions. It is likely that specific facts and circumstances of a case will limit the ability to enter into safe harbour rules framework without generating risk of double taxation.
Your Taxand contacts for further queries are:
Antoine Glaize, Taxand's Global Transfer Pricing Service Line Leader
T. +33 623 088 006
T. +91 124 339 5010
T. +39 02 726 0591
Ramon Lopez de Haro
T. +34 91 514 52 00
T. +44 207 715 5234
T. +1 202 688 4215