We are pleased to share the latest updates with you. On 20 January 2022, the OECD released the 2022 edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. This is the first update since the 2017 OECD TP Guidelines.
This latest edition consolidates the 2017 edition and three important reports published in recent years. The three reports implemented in the new release are:
- The report Revised Guidance on the Application of the Transactional Profit Split Method, published on 21 June 2018.
- The report Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles, published on 21 June 2018.
- The report Transfer Pricing Guidance on Financial Transactions, published on 11 February 2020.
Furthermore, the 2022 edition contains some consistency changes made to the rest of the OECD TP Guidelines.
The report Revised Guidance on the Application of the Transactional Profit Split Method, published on 21 June 2018.
The report was originally published in 2018. It was developed under the mandate of BEPS Action 10. The revised 2022 guidance intended to clarify when it is most appropriate to apply the transactional profit split method.
The report Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles, published on 21 June 2018.
The aim of the report was to address the information asymmetry between taxpayers and tax authorities regarding the potential value of hard-to-value intangibles. The new guidance aims to help tax authorities in applying the approach to hard-to-value intangibles under BEPS Action 8.
The report Transfer Pricing Guidance on Financial Transactions, published on 11 February 2020.
This report can be considered the biggest chance in the 2022 edition. Its publication in 2020 was the first specific guidance of financial transactions issued by the OECD. The report includes all guidelines on financial transaction-related matters and contains illustrative examples. Specific issues included in the report are intra-group loans, cash pools, hedging, financial guarantees and captive insurance.
Implications for your organisation
The 2022 release of the OECD TP guidelines is primarily a consolidation of several reports published in recent years and the 2017 OECD TP guidelines. The new guidelines do therefore not contain completely new information and guidance.
Has your company implemented these reports into your organisation? Quantera Global can assist your company implement all relevant OECD TP guidelines. This will allow your company to be in control and make sure that you are compliant. If you would like to know more about the 2022 TP guidelines, please feel free to contact us.