The OECD has published a discussion draft which deals with work in relation to Action 8 of the Action Plan on Base Erosion and Profit Shifting (BEPS).
Action 8 of the BEPS Action Plan (“Assure that transfer pricing outcomes are in line with value creation: Intangibles”) identifies the requirement for development of “transfer pricing rules or special measures for transfer of hard-to-value intangibles”. The discussion draft sets out an approach to hard-to-value intangibles and proposes revisions to the guidance in the 2014 BEPS Report, “Guidance on Transfer Pricing Aspects of Intangibles”.
The draft further proposes an approach based on the determination of the arm’s length pricing arrangements (including any contingent pricing arrangements) that would have been made between independent enterprises at the time of the transaction. This approach is applied when specific conditions are met and is intended to protect tax administrations against the negative effects of information asymmetry.
Comments on the draft are invited by 18 June 2015.
