ICC Comments on the implementation of the Platform for Collaboration on Tax
ICC welcomed the opportunity to comment on the Platform for Collaboration on Tax draft toolkit designed to help developing countries in the implementation of effective transfer pricing documentation requirements.
ICC appreciates the work of the Platform to collectively produce toolkits for developing countries for appropriate implementation of responses to international tax issues under the G20/OECD Base Erosion and Profit Shifting (BEPS) project and recognizes the efforts of the Platform to develop toolkits to help developing countries implement international tax best practices.
ICC notes that any additional guidance for developing countries in connection with the transfer pricing documentation framework could be very useful to reach the common goal of standardisation; the more coherent the internal systems are, the lower the costs of compliance for the taxpayer will be as will be the costs of control by tax authorities.
ICC reiterates that a strong message of coherence with the OECD post-BEPS approach to transfer pricing (TP) documentation is critical, as it is a broad model generally accepted by the vast majority of countries, which has already been proved as sufficient and appropriate to report information on related party transactions and their valuation.
ICC provided specific comments for consideration related to burden of proof, confidentiality, penalties and compliance incentives and issues pertaining to jurisdiction.
With respect to enforcement of transfer pricing documentation, ICC notes the need for clear rules and measures and when dealing with scarce resources, the legal framework should focus on “simplification and exemption” measures.
ICC recognizes that countries need to balance their level of exigence in terms of transfer pricing documentation with their capacity to control compliance – which is something the toolkit could benefit from by addressing more explicitly.