New Transfer Pricing Guidelines Issued
By Richard Jahoda Jr, Grinex Czech Republic
The highly anticipated new edition of the OECD’s Transfer Pricing Guidelines was issued on 10 July 2017. It mainly reflects a consolidation of changes resulting from the BEPS project. Probably the greatest change in the 2017 edition is in the chapter on the arm’s length principle, in part explaining the identification of commercial or financial relations.
Furthermore, this chapter now explains effects on comparability caused by location savings, local market features, having an assembled workforce, and MNE group synergies.
The chapter on Transfer Pricing Documentation is brand new in the 2017 edition. It explains the three tiered approach to documentation, i.e., master file, local file and Countryby- Country Report.
The chapter on Intangibles is brand new as well. It covers ownership of intangibles and also transactions involving development, enhancement, maintenance, protection and exploitation of intangibles.
The 2017 edition also contains a new subchapter on Safe Harbours. It replaces the previous negative view on this matter and provides recommendations for the use of safe harbours.
Other changes in the 2017 edition are related to low value-added intragroup services, cost contribution arrangements and consistency changes that were needed to produce the new edition of the Guidelines.
Richard JahodaGrinex Czech Republic, Prague, Czech Republic
T: +420 222 516 889
Grinex Czech Republic, founded in 1997, offers audit, tax advisory, payroll, expert opinions and accounting advisory services to Czech and international customers. It also promotes wider usage of smart IT solutions in the accounting industry.
Richard Jahoda is a Managing Partner of the Grinex Czech Republic, and is responsible for tax advisory and accounting advisory services. He has more than 20 years of experience in these areas. He is a certified tax advisor.xxx
Published: Winter 2017 l Photo: cge2010 - Fotolia.com