New OECD guidelines provoke different responses around the world
September 22, 2010
Countries are responding in different ways to the new OECD transfer pricing guidelines, which were updated this year after some years of discussion.
The final panel at International Tax Review’s 10th Global Transfer Pricing Forum in Amsterdam heard that while some jurisdictions would stick closely to the guidelines, particularly if they were OECD member states, others, such as China, would take them seriously only if they did not go against local rules.
Roberto Schatan, senior adviser at the OECD’s Centre for Tax Policy and Administration, summarised the key changes in the new guidelines which include the modification to comparability analysis in chapters I to III to eliminate the hierarchy of methods and the distinction between traditional methods and last resort methods. Instead the guidelines call for the most appropriate method to be used. Where more than one method is appropriate, the most reliable should be used. He also mentioned the new guidance to apply profit methods, where previously little had existed.
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