The new transfer pricing landscape

Transfer pricing is at the heart of the OECD’s base erosion and profit shifting (BEPS) project. Officially covered by BEPS Actions 8 to 10 (and transfer pricing documentation by Action 13) in reality it interlocks with many of the other BEPS actions – from appropriate financing of cross border transactions and permanent establishments to dispute resolution.

To date much of the focus has been on how ‘DEMPE’ functions define an entitlement to an intangible related return (more on this below). However this overlooks another important aspect of the new guidelines that considers which party controls critical risks within a business. In this article we explore the new transfer pricing landscape with a particular focus on the control of risk concept the responses of tax authorities in a post-BEPS environment...