OECD: Public consultation on toolkits to support developing countries in addressing BEPS risks when pricing minerals

Toolkits to support developing countries in addressing BEPS risks when pricing minerals

11 May 2023

The Organisation for Economic Cooperation and Development (OECD) and the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) released for public consultation two toolkits to support developing countries in addressing base erosion and profit shifting (BEPS) risks when pricing minerals:

Determining the Price of Minerals: A Transfer Pricing Framework [PDF 1.3 MB] provides practical and meaningful guidance for developing countries to accurately delineate the transaction and price mineral sales on an arm's length basis. This toolkit also provides simplified and administrative approaches to price mineral sales that can be utilized by developing countries.
Determining the Price of Minerals: A Transfer Pricing Framework, Schedule A: Bauxite [PDF 1.3 MB] complements the above toolkit by providing a framework to identify the primary economic factors that can influence the pricing of minerals using transfer pricing principles as applied to bauxite. Further toolkits applying the framework to other commodities will be released as they are developed.

As explained in the OECD release, government revenue depends on mineral products being priced and measured accurately. However, pricing is not always straightforward. It may be complicated by the different stages of mineral beneficiation, the lack of publicly quoted prices for certain minerals, and adjustments based on the quality or grade of the product. Many governments worry they do not know the value of their exported minerals and are therefore losing much-needed revenue. These toolkits aim to increase policy-makers’ knowledge of the process of determining the price of exported minerals.

Comments on both toolkits are requested by 14 July 2023.

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