KPMG report: OECD official provides update on expected transfer pricing guidance

Ongoing transfer pricing-related work at the OECD and what the OECD will be focusing on in 2024

Ongoing transfer pricing-related work at the OECD

Mayra Lucas, Senior Transfer Pricing Advisor at the Organisation for Economic Cooperation and Development (OECD), speaking today at the KPMG-sponsored TP Minds West Coast conference, discussed the ongoing transfer pricing-related work at the OECD and what the OECD will be focusing on in 2024.  

Lucas discussed the progress that has been made under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project so far—including the large-scale adoption of country-by-country (CbC) reporting, and how increasing numbers of countries are adopting the OECD Transfer Pricing Guidelines related to hard-to-value intangibles and financial transactions.

In terms of future changes to the CbC reporting standard, Lucas indicated that the prioritization of the work on the two-pillar solution has affected the timing for completion of the CbC reporting review. The OECD is considering the best way to take this work forward in light of the introduction of the global anti-base erosion (GloBE) rules. The fact that taxpayers can use the CbC report to obtain transitional relief from GloBE (so-called transitional CbC reporting safe harbour) is likely to delay the introduction of changes to CbC reporting.

Lucas explained that the OECD’s efforts in the coming months will continue to focus on adopting and ensuring the effective implementation of Amount B, which aims to standardize the remuneration of related party distributors that perform “baseline marketing and distribution activities.” In addition, the OECD hopes to revisit the guidance in Chapters IV (administrative approaches) and VII (intra-group services) to assess changes that may be needed to clarify or expand the guidance on, for instance, secondary or compensating adjustments or certain aspects relevant to intra-group services, such as the benefit test or the cost base determination for the remuneration of services. In addition, the revision is likely to update the guidance to reflect recent work on dispute prevention and resolution.

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