OECD: Transfer pricing rules and implementation of hard-to-value-intangibles approach
OECD: Transfer pricing rules, hard-to-value-intangibles
The Organisation for Economic Cooperation and Development (OECD) today announced the publication of jurisdiction-specific information on the implementation of the hard-to-value-intangibles approach. To date, 40 jurisdictions have provided information on whether their domestic legal system provides for transfer pricing rules aimed at transactions involving hard-to-value-intangibles approach.
According to the OECD release, today’s publication of the transfer pricing country profiles is part of the monitoring process of the implementation of the hard-to-value-intangibles approach agreed to by the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS). Under this approach, participating jurisdictions report on their legislation and administrative practices relevant to the application of the hard-to-value-intangibles approach. The country profiles provide an understanding of the extent to which the hard-to-value-intangibles approach has been implemented by the reporting countries.
The hard-to-value-intangibles approach was the outcome of the work done under BEPS Action 8, and is intended to address the negative effects of information asymmetry by providing that tax administrations can consider ex post outcomes as presumptive evidence about the appropriateness of ex-ante pricing arrangements.
The hard-to-value-intangibles approach permits taxpayers to rebut certain presumptive evidence by demonstrating the reliability of the information supporting the pricing methodology adopted at the time the controlled transaction took place. In 2018, the hard-to-value-intangibles approach was supplemented with a new annex to Chapter VI of the Transfer Pricing Guidelines with guidance intended to provide a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of the hard-to-value-intangibles approach.
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