OECD Provides Update on Transfer Pricing Issues
Tax Alert - August 2015
On 7 July 2015, the Organisation for Economic Co-operation and Development (OECD) provided an update on the status of various transfer pricing matters in connection with Actions 8, 9 and 10 of the Base Erosion and Profit Shifting (BEPS) Action Plan. The update highlights areas in which progress has been made and those in which additional work will be needed to reach consensus. Although the information provided reflects only Working Party 6 (WP6)’s current thinking, and is not necessarily indicative of where WP6 will end up, progress appears to have been made since the public consultation on 19 March 2015.
The revised transfer pricing guidelines will be submitted to the OECD Committee on Fiscal Affairs for formal approval in September this year and then finally to the G20 Finance Ministers Meeting in October for ratification. However, guidance on financial arrangements, the use of the profit split method and profit attribution to permanent establishments will not be part of the final deliverables to the G20 and are expected to be developed in 2016 and 2017 (and possibly later for financial arrangements).
More information can be found here.
While no legislative changes have yet been made in New Zealand to manage transfer pricing related BEPS issues, Inland Revenue Officials have repeatedly highlighted transfer pricing as a key focus area going forward. Taxpayers can in future years expect Inland Revenue to place an even higher level of scrutiny on their transfer pricing policies and their implementation. We understand that Inland Revenue is currently increasing the size of their transfer pricing investigations team.
If you require further guidance or for more information please contact a member of the Deloitte transfer pricing team.
August 2015 Tax Alert contents