OECD discussion draft: guidance on hard-to-value intangibles


Published on June 2, 2017


OECD published a discussion draft which provides guidance on the implementation of the approach to pricing transfers of hard-to-value intangibles (”HTVI”). The draft follows-up on the Final Report on Actions 8-10 of the BEPS Action Plan, which mandated development of guidance on implementation of the approach to pricing transfers of HTVI described in Chapter VI of the OECD Transfer Pricing Guidelines aiming at preventing base erosion and profit shifting by moving intangibles among group members.

The draft presents the principles that should underline the implementation of the approach to HTVI, provides examples illustrating the application of this approach, and addresses the interaction between the approach to HTVI and the mutual agreement procedure under an applicable treaty.

This guidance should improve consistency and reduce the risk of economic double taxation resulting from adjustments made by application of the HTVI approach. Moreover, it should protect tax administrations from the negative effects of information asymmetry by tackling the extensive information available to the taxpayer on one hand and the absence of information available to tax administration on the other hand.

The key element of the draft is that tax administration could, where the HTVI approach applies, consider ex post outcomes as presumptive evidence about the appropriateness of the ex ante pricing agreements.

OECD invites public to send comments on this discussion draft by 30 June 2017.



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