ICC Document & publication

ICC comments to the OECD Discussion Draft on Action 8: Revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contribution Arrangements (CCAs) (2015)

In the context of the G20 endorsed OECD/BEPS Action Plan, the International Chamber of Commerce (ICC) provided feedback on the OECD Discussion Draft on Action 8 on Revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contribution Arrangements (CCAs).

Action 8 of the BEPS Action Plan covers the transfer pricing of intangibles and requires the development of rules to prevent BEPS by moving intangibles among group members.

The OECD’s Discussion Draft sets out a proposed revision to chapter VIII of the Transfer Pricing Guidelines and is intended to align the guidance in that chapter with the other elements of Action 8 already addressed in the¬†Guidance on Transfer Pricing Aspects of Intangibles¬†released in September 2014 which provided modifications to Chapter VI of the OECD Transfer Pricing Guidelines. While appreciating modifications to the Guidelines where this will enhance certainty and provide simplification and objectivity for both taxpayers and tax administrations, ICC has expressed concern about aspects that may result in greater uncertainty and complexity – leading to higher risks of double taxation.

As the world business organization speaking on behalf of enterprises in all sectors in every part of the world, ICC notes in its comments that the current OECD proposal lacks a clear definition of (direct) benefits and fails to provide criteria to distinguish between direct and indirect benefits. ICC also underlines that every effort should be made to recognise the CCA and its terms, where appropriate, in cases of indirect benefit. The business community is particularly concerned that taxpayers may no longer rely on contributions valued at cost. Furthermore, ICC signals the difficulty of monitoring and re-valuing the contributions of each participant after a period(s) of time as this will create a potentially enormous compliance burden.