BEPS Action 8: OECD Releases Draft Guidance on Cost Contribution Arrangements

Tax Analysis:May 13, 2015/China

OECD on April 29 released a non-consensus discussion draft on cost contribution arrangements (CCAs) that contains proposed revisions to Chapter VIII of the OECD’s transfer pricing guidelines. The CCA discussion draft was issued in relation to the OECD’s BEPS Action Plan under Action 8 (transfer pricing valuation with respect to transfers of intangibles). (Tax Analysis:May 13, 2015/China)

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The CCA discussion draft primarily updates the existing guidance to take into account guidance released under other BEPS action items, rather than take a fresh look at CCAs. The CCA discussion draft incorporates draft guidance on: (1) risk in Chapter I of the OECD transfer pricing guidelines released in December 2014 (the “Risk Draft”); and (2) taxation of transfers of intangibles in accordance with the value attributable to such intangibles in Chapter VI of the transfer pricing guidelines released in September 2014 (the “Intangibles Draft”). Thus, to the extent that the Risk Draft and the Intangibles Draft, including any changes on hard-to-value intangibles and special measures, undergo further revisions to reach consensus among OECD member countries, the CCA draft is likely to also undergo revisions to be consistent with the other discussion drafts.


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