On 10 July 2017 the Organisation for Economic Cooperation and Development (OECD) announced the release of the 2017 edition of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.
As reported in a related OECD release, the transfer pricing guidelines provide guidance on the application of the “arm’s length principle”—that is, the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises. The 2017 edition of the transfer pricing guidelines mainly reflects a consolidation of the changes resulting from the OECD/G20 base erosion and profit shifting (BEPS) project, and incorporates the following revisions of the 2010 edition into a single publication:
In addition, the updated edition of the transfer pricing guidelines include the revised recommendation of the OECD Council on the Determination of Transfer Pricing between Associated Enterprises [C(95)126/FINAL]. The revised recommendation reflects the relevance to address BEPS and the establishments of the “inclusive framework” on BEPS.
Transfer pricing professionals have noted the following initial impressions of the updated transfer pricing guidelines:
In Latvia the transfer pricing guidelines are an important source of interpretation of the transfer pricing regulations, which are used by tax payers, the tax authority and the courts when deciding on transfer pricing matters.