One minute with... Alison Lobb

What’s happening in the transfer pricing arena?

There are a number of trends and developments in transfer pricing that are interesting at the moment – many of them linked to the OECD’s work on BEPS. One to note would be the likely increase in the use of the profit split method particularly where more than one party is contributing to the development of intangibles. Done properly a profit split links each element of the return to the parties to third party comparables so as to satisfy the arm’s length standard. Selection of the most appropriate method is increasingly important in transfer pricing following the 2010 changes to the OECD’s transfer pricing guidelines – a trend which is continuing under the BEPS work and requires complete and accurate functional analyses. The consequences of selecting a method that is...