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Timing Issues Relating to Transfer Pricing

Timing Issues Relating to Transfer Pricing
18 Sep 2012
The Secretariat of Working Party No. 6 of the OECD Centre for Tax Policy and Administration has requested business comments on certain timing issues related to transfer pricing.

In connection with its work on transfer pricing aspects of intangibles and other projects, modifications to the Transfer Pricing Guidelines have been discussed by WP6 delegates. The indicated modifications are not agreed by all countries. However, they raise certain difficult issues on which comment by the business community is specifically requested by the Secretariat.

Taxand discusses our response to the four key issues set out in this draft:

  • Availability of information
  • Adjustments made at year end
  • Ability to consider information post-transaction date
  • Considerations for intangible property and uncertainty as to the date a transaction occurs

Read Taxand's full response to the OECD on Timing Issues Relating to Transfer Pricing


Taxand's Take

This is an important issue that has historically led to significant dispute, so increased clarity is welcome. In addition to the proposed changes in the discussion draft, Taxand recommends the following:

  • 3.67/3.68 to include a note on materiality/significance of transactions and affording the option of a measured approach
  • 3.69 to reference the concept of hindsight and case law principles preventing its application in most situations (or at least recognising the debate)
  • 3.69/3.70 to include ex post situations in which the discussion around “reasonable” is also relevant (although less so than in an ex ante environment)
  • General requirement to exceptional items and material differences between financial and tax accounts

Your Taxand contact for further queries is:
Antoine Glaize, Taxand's Global Transfer Pricing Service Line Leader
T. +33 623 088 006

Shiv Mahalingham
T. +44 207 715 5234


Taxand's Take Author