DISCUSSION DRAFT REVISION OF THE SPECIAL CONSIDERATIONS FOR INTANGIBLES IN CHAPTER VI OF THE OECD TRANSFER PRICING GUIDELINES AND RELATED PROVISIONS
6 June 2012
In 2010, the OECD announced the commencement of a project on the transfer pricing aspects of intangibles. A scoping paper was published on the OECD website for public comment. In the interim three public consultations have been held with interested commentators. At the business consultation held in November 2011, representatives of the business community suggested that it would be helpful if the OECD were to release interim drafts of its work as it progresses for further detailed public comment.
This document is such an interim draft. It contains two principal elements: (i) a proposed revision of the provisions of Chapter VI of the Transfer Pricing Guidelines; and (ii) a proposed revision of the Annex to Chapter VI containing examples illustrating the application of the provisions of the revised text of Chapter VI.
Because this is an interim draft it should be recognised that it is not necessarily a consensus document and that the Committee on Fiscal Affairs has not yet considered the draft. One or another country may not be in full agreement with one or more of its provisions. Nevertheless, OECD Working Party No. 6 believes that it will be extremely helpful to its ongoing work on the intangibles project to have detailed business input with regard to the various provisions of this draft.
It should also be recognised that the Discussion Draft does not represent a complete draft of all of the provisions ultimately expected to form a part of the output for this project. In particular, the Working Party still intends to address at least the following topics not currently addressed in this draft: (i) any necessary modifications to Chapter VIII of the Transfer Pricing Guidelines related to cost contribution arrangements that may be necessitated as a result of the modification of Chapter VI; (ii) the transfer pricing consequences of various items treated in this draft as comparability factors rather than intangibles, including market specific advantages, location-based advantages, corporate synergies and workforce issues; and (iii) any additional conforming changes to Chapters I –III and Chapter VII of the Transfer Pricing Guidelines required as a result of the changes to Chapter VI. Discussion drafts of additional proposed changes will be released for comment at a future date.
Written comments on this Discussion Draft are requested to be provided by 14 September 2012.
Comments in Word format should be addressed to Joseph L. Andrus, Head of Transfer Pricing Unit, Centre for Tax Policy and Administration (firstname.lastname@example.org). Unless otherwise requested at the time of submission, comments received will be posted on the OECD website. It is anticipated that a public consultation on this Discussion Draft will be held in Paris during the week of 5 November 2012. Participants at the November public consultation will be drawn primarily from those providing timely written comments on this Discussion Draft.