Tax Insights ()
On March 11, 2014, the Organisation for Economic Cooperation and Development (the OECD) released a paper on Transfer Pricing Comparability and Developing Countries (the Paper), with comments requested by April 11, 2014.
The Paper discusses four approaches for addressing tax authorities’ concerns over the lack of data on local comparable transactions. The four approaches are (i) expanding access to data sources for comparables, (ii) using data sources for comparables more effectively, (iii) developing approaches to identifying arm’s length prices without reliance on direct comparables, and (iv) utilizing advance pricing agreements and mutual agreement procedures. The OECD specifically states that the purpose of the Paper is “to explore approaches that the OECD may adopt, in cooperation with other stakeholders, to respond to the G8’s request to address the concerns expressed by developing countries.”