The Organization for Economic Co-operation and Development (OECD) has updated its transfer pricing guidelines for 2022. The new edition of the OECD's Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations consolidates changes since the 2017 edition and incorporates previously released OECD reports that resulted from the base erosion and profit shifting (BEPS) project, and certain changes for consistency. The OECD released this publication on January 20, 2022.

The OECD transfer pricing guidelines contain guidance on how multinational enterprises should apply the "arm's length principle"—that is, the international consensus on how cross-border transactions between associated enterprises should be valued for income tax purposes.

2022 updates to Transfer Pricing guidelines

The 2022 edition of the OECD's transfer pricing guidelines include the following revisions to the old guidelines that were approved by the OECD/G20 Inclusive Framework:

  • Transactional profit split method — Changes to incorporate the OECD's Revised Guidance on the Transactional Profit Split Method report, as approved in 2018
  • Approach to hard-to-value intangibles — Changes to incorporate the OECD's Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles report, as approved in 2018
  • Financial transactions — Changes to incorporate the OECD's Transfer Pricing Guidance on Financial Transactions report, adopted in 2020.

For more information, contact your KPMG adviser.

Information is current to January 24, 2022. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500