The OECD has released the 2022 edition of its transfer pricing guidelines for multinational enterprises and tax administrations which provide guidance on the application of the arm’s length principle for cross-border transactions between associated companies.
The biggest change is a new chapter X on the transfer pricing aspects of financial transactions which includes illustrative examples. In addition, the financial transactions revisions are also reflected in Chapter I (the arm’s length principle) in a new section (D.1.2.2) on risk-free and risk-adjusted rates of return.
The revised guidance aims to clarify when the transactional profit split method is the most appropriate method to apply. The updates replace paras 2.114–2.151 of the guidelines in the section on the transactional profit split method (Chapter II Part III section C). They also replace Annex II to Chapter II with examples to illustrate the guidance on the transactional profit split method.
The revisions in respect to hard-to-value intangibles to help tax administrations in applying the approach to hard-to-value intangibles under BEPS Action 8 are included in a new annex (Annex II to Chapter VI).
The OECD has released the 2022 edition of its transfer pricing guidelines for multinational enterprises and tax administrations which provide guidance on the application of the arm’s length principle for cross-border transactions between associated companies.
The biggest change is a new chapter X on the transfer pricing aspects of financial transactions which includes illustrative examples. In addition, the financial transactions revisions are also reflected in Chapter I (the arm’s length principle) in a new section (D.1.2.2) on risk-free and risk-adjusted rates of return.
The revised guidance aims to clarify when the transactional profit split method is the most appropriate method to apply. The updates replace paras 2.114–2.151 of the guidelines in the section on the transactional profit split method (Chapter II Part III section C). They also replace Annex II to Chapter II with examples to illustrate the guidance on the transactional profit split method.
The revisions in respect to hard-to-value intangibles to help tax administrations in applying the approach to hard-to-value intangibles under BEPS Action 8 are included in a new annex (Annex II to Chapter VI).
