Public consultation on additional toolkit to support developing countries in addressing BEPS risks when pricing minerals
Comments on the draft toolkit are due by 2 February 2024.
Comments on the draft toolkit are due by 2 February 2024.
The Organisation for Economic Cooperation and Development (OECD) and the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) released for public consultation an additional toolkit to support developing countries in addressing base erosion and profit shifting (BEPS) risks when pricing minerals:
- Determining the Price of Minerals: Application to Lithium [PDF 2.2 MB] provides a framework to identify the primary economic factors that can influence the pricing of minerals using transfer pricing principles as applied to lithium.
The OECD and IGF in May 2023 released for public consultation two initial toolkits to support developing countries in addressing BEPS risks when pricing materials, one providing general guidance and another applicable to bauxite. Read TaxNewsFlash
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. This latest toolkit provides practical and meaningful guidance for developing countries to accurately delineate the transaction and price mineral sales on an arm's length basis applicable to lithium exports.
Comments on the draft toolkit are due by 2 February 2024.
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