Draft “toolkit” aims to help developing countries with transfer pricing documentation

The Platform for Collaboration on Tax – a joint initiative of the International Monetary Fund, OECD, United Nations, and World Bank Group – on September 27 released a draft “toolkit” aimed at helping developing nations design transfer pricing documentation rules.

The new toolkit provides developing countries with analysis and examples of policy options and legislative approaches to transfer pricing documentation. Information on the background, context, and objectives of transfer pricing documentation regimes is also presented.

The goal is “to find the right balance between the tax authorities’ needs and avoiding excessive compliance costs,” the OECD explained in a release.

The Platform is seeking comments on the draft transfer pricing documentation toolkit by November 8.

Specifically, the Platform for Collaboration on Tax asks stakeholders for feedback on the following points:

1. Does this draft toolkit effectively address all the relevant considerations for the design of an effective transfer pricing documentation regulatory system?
2. In terms of enforcement of transfer pricing documentation, are particular approaches (e.g. penalties or compliance incentives) especially beneficial for limited capacity developing countries?
3. Are there other transfer pricing documentation requirements not covered in this toolkit that should be considered?
4. What additional considerations and/or tools can be included in this toolkit to assist developing countries to implement effective transfer pricing documentation?

The Platform welcomes comments on any other aspect of the transfer pricing documentation toolkit.