Transfer pricing and OECD
The Organisation for Economic Co-operation and Development (OECD) is an international organisation. Their main goal is to develop policies that promote prosperity, equality, opportunity and well-being for all. In the area of transfer pricing, the OECD has provided guidelines. The guidelines are the starting point for all member countries. These TP guidelines provide a solution to disputes between tax authorities of the transfer pricing OECD member countries. However, for the OECD guidelines to be effective, the member states must implement the guidelines in their national laws of tax treaties.
As of July 2017, the OECD updated its transfer pricing guidelines for multinationals to bring them in line with the recommendations of the BEPS project. Since this update, the TP guidelines include a three-step approach to transfer pricing documentation. This approach remained unchanged after the January 2022 update of the OECD Guidelines. This three-step approach includes the documentation of a master file, local files and country-by-country report. Please click for more information.
Transfer pricing guidelines
All multinationals operating in multiple countries are affected by the legal requirements of transfer pricing. Requirements your company must meet include these OECD TP guidelines and local transfer pricing documentation requirements. These guidelines provide guidance on the application of the “at arm’s length principle”.
Main purposes of the OECD TP guidelines
The transfer pricing guidelines provide assistance and guidance on all transfer pricing related matters. Important purposes of the TP guidelines are:
- Avoiding double taxation
- Minimising issues between tax authorities
- Promoting international trade and investment
- Providing guidance on how to deal with the at arm’s length principle.
How can QG assist?
Our consultants can help your company to correctly implement and apply the OECD TP guidelines. Quantera Global helps your company set up a solid transfer pricing design and documentation that meets the compliance regulations and suits your risk appetite.
If you run into audits with tax authorities or would like to avoid these pro-actively, please make an appointment for a free consultation by phone or fill in our contact form. We are looking forward to meeting you.