Transfer Pricing and Multinational Enterprises
By: Organisation for Economic Co-operation and Development
Publisher: OECD Publishing
Published: 1979
Place of publication: Paris
Language: eng
Format: [electronic resource] /
Number of pages: 100
ISBN-13: 9789264167773
Subjects: Finance and Investment
Description: The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations provide guidance on the application of the "arm’s length principle", which is the international consensus on transfer pricing, i.e. on the valuation, for tax purposes, of cross-border transactions between associated enterprises. In a global economy where multinational enterprises (MNEs) play a prominent role, transfer pricing is high on the agenda of tax administrators and taxpayers alike. Governments need to ensure that the taxable profits of MNEs are not artificially shifted out of their jurisdictions and that the tax base reported by MNEs in their respective countries reflect the economic activity undertaken therein.

For taxpayers, it is essential to limit the risks of economic double taxation that may result from a dispute between two countries on the determination of an arm’s length remuneration for their cross-border transactions with associated enterprises.  Following this original 1979 publication, the OECD Transfer Pricing Guidelines were approved by the OECD Council in their original version in 1995. A limited update was made in this 2009 edition, primarily to reflect the adoption, in the 2008 update of the Model Tax Convention, of a new paragraph 5 of Article 25 dealing with arbitration, and of changes to the Commentary on Article 25 on mutual agreement procedures to resolve cross-border tax disputes.

A subsequent edition was released in 2010, in which, Chapters I-III were substantially revised, with new guidance on: the selection of the most appropriate transfer pricing method to the circumstances of the case; the practical application of transactional profit methods (transactional net margin method and profit split method); and on the performance of comparability analyses. Furthermore, a new Chapter IX, on the transfer pricing aspects of business restructurings, was added. Consistency changes were made to the rest of the Guidelines. Digitised document - Electronic release on 24/11/2011.
Table of contents: title: Preface; title: Chapter 1. Summary of Problems; title: -The Arm's Length Principle; title: General considerations; title: Relevant texts already published by the OECD; title: Chapter 2. Goods; title: -Introduction; title: The general principle of arm's length and its application in special situations; title: Methods of ascertaining an arm's length price; title: Chapter 3. Technology and Trademarks; title: -Scope of the chapter; title: Transfers of technology; title: Transfer pricing aspects of use of trademarks; title: Chapter 4. Certain Intra-Group Services; title: -Introduction; title: Services in a group of associated enterprises; title: Treatment for tax purposes of intra-group services; title: Summary of conclusions; title: Chapter 5. Loans; title: -Preliminary remarks; title: Scope of the chapter; title: Definition of loans; title: The general principle of arm's length pricing and its application in special situations; title: The rate of interest; title: Final remarks; title: Annex. Recommendation of the OECD Council