Multinational enterprises may want to review the new OECD guidance on the transfer pricing implications of the pandemic
The new guidance, released on December 18, 2020, discusses how the arm's-length principle and the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017 apply to certain issues resulting from the pandemic.
The guidance, which represents the consensus view of the 137 members of the Inclusive Framework on BEPS (including Canada), encourages both taxpayers and tax administrations to consider practical approaches consistent with the taxpayer's transfer pricing policy over time. However, it's not yet clear how tax authorities in Canada and other jurisdictions will consider the guidance in dealing with taxpayers. In particular, the guidance focuses on issues related to:
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