On 16 September 2014 the OECD released the first seven action plans of its Base Erosion Profit Shifting (BEPS) Project. Among those released were two that are particularly relevant for transfer pricing: Action 8 – Guidance on Transfer Pricing Aspects of Intangibles and Action 13 – Guidance on Transfer Pricing Documentation and Country-by-Country reporting (CBCR) template.
BDO's bulletin below focuses on Action 13, with particular emphasis on:
- The practical differences between the transfer pricing documentation created to satisfy the previous OECD Transfer Pricing Guidelines and what Multinational Enterprises (MNEs) will need to do under the new Guidelines.
- Steps MNEs should be taking now to be ready for the new documentation requirements.
Though some details are to be worked out, there’s no question that many countries will adopt the Guidelines and that businesses will have to meet the new reporting requirements in the near future.
We believe enterprises should take action early to understand, address, and manage the reporting process so that there are no surprises. Though doing so might be burdensome, MNEs that develop robust systems to fulfil the documentation requirements could end up saving money by taking advantage of planning opportunities that come to light in the process of complying. As well, enterprises should keep in mind that money and effort spent complying with the Guidelines may pay off in the event of a transfer pricing dispute.
To download the bulletin, please click here.