ICC Comments on OECD Discussion Draft Chapter IV of the Transfer Pricing Guidelines

In the context of the Organisation for Economic Co-operation and Development (OECD) projects to revise the guidance in Chapter IV (administrative approaches) of the Transfer Pricing Guidelines, ICC submitted high-level and fundamental comments on this Chapter, related to administrative approaches to avoiding and resolving transfer pricing disputes.

Within the framework of the OECD/G20 Base Erosion and Profit Shifting Project (the BEPS project), a Chapter IV update is uniquely positioned in an environment where transfer pricing controversy has become increasingly relevant for both multinationals and tax administrations.

It is to this end that ICC submitted comments to the OECD for consideration. The comments stress the need for certainty and clarity in guidance to ensure the timely resolution of transfer pricing disputes. ICC Comments on OECD Discussion Draft Chapter IV lay out a coordinated approach to transfer pricing risk assessment that is necessary across all interested tax administrations and jurisdictions.

Within its recommendations, ICC strongly believes that Chapter IV of the Transfer Pricing Guidelines can be significantly improved by the introduction of additional guidance on examination practices, such as the conduct of risk assessment in the pre-audit phase. ICC also outlines suggestions for additional guidance that would be useful in minimising the risk of double taxation.

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