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Last chances to comment on OECD transfer pricing definitions for BEPS

The OECD Action Plan to prevent Base Erosion and Profit Shifting (BEPS) - see - is gathering pace with deadlines to comment on different aspects of the work coming up. Also the date for Public Consultation Meeting in Paris has been set for 19-20 March 2015.

Action 7 – Prevent the Artificial Avoidance of PE Status

In October 2014,  OECD invited comments on their “discussion draft which includes the preliminary results of the work carried on with respect to issues related to the artificial avoidance of PE status and includes proposals for changes to the definition of permanent establishment found in the OECD Model Tax Convention.”

Comments* should be sent by 9 January 2015 at the latest (no extension will be granted) and should be sent by email to taxtreaties@oecd.org in Word format (in order to facilitate their distribution to government officials). They should be addressed to Marlies de Ruiter, Head, Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA.

Actions 8, 9 and 10

In December 2014, OECD invited comments on their “discussion draft which deals with work in relation to Actions 8, 9, and 10 (“Assure that transfer pricing outcomes are in line with value creation”) of the Action Plan on Base Erosion and Profit Shifting (BEPS).

Actions 8, 9 and 10 pertain to a number of closely related topics.  These include the development of:

(i) “rules to prevent BEPS by transferring risks among, or allocating excessive capital to, group members. This will involve adopting transfer pricing rules or special measures to ensure that inappropriate returns will not accrue to an entity solely because it has contractually assumed risks or has provided capital.  The rules to be developed will also require alignment of returns with value creation.”

(ii) “rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties.  This will involve adopting transfer pricing rules or special measures to: (i) clarify the circumstances in which transactions can be recharacterised.”

(iii) “transfer pricing rules or special measures for transfers of hard-to-value intangibles.”

Interested parties are invited to submit written comments* by 6 February 2015 (no extension will be granted). Comments should be sent by email to TransferPricing@oecd.org in Word format (in order to facilitate their distribution to government officials). They should be addressed to Andrew Hickman, Head of Transfer Pricing Unit, Centre for Tax Policy and Administration. Comments in excess of ten pages should attach an executive summary limited to two pages.

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* OECD stress that “that all comments received regarding this discussion draft will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective, or the person(s) on whose behalf the commentator(s) are acting.”

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Control & Compliance in Operations
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