OECD updates transfer pricing guidelines on cost contribution arrangements

The OECD on April 29 released a discussion draft proposing revisions to the OECD transfer pricing guidelines relating to cost contribution arrangements (CCAs) entered into between related parties.

The proposal, which would modify Chapter VIII of the guidelines, was released in response to action 8 of the OECD/G20 base erosion and profit shifting (BEPS) plan and is designed to prevent MNE groups from avoiding tax by moving intangibles among group members.

A central objective of the revisions is to align the transfer pricing of intangibles under CCAs with general guidance on the transfer pricing of intangibles in revised Chapter VI, the OECD states in the draft. In particular, the draft clarifies that CCA contributions should be measured at value rather than at cost, the OECD notes.

The draft also incorporates concepts of risk and control contained in recently released draft revisions to Chapter 1 of the OECD transfer pricing guidelines. Any further changes to draft Chapter 1 will be taken into account in the final guidance on CCAs, the OECD said.

Comments on the draft are due May 29; public hearing will be held July 6 or 7 in Paris.

See:

• Discussion draft

• Release

Related MNE Tax articles:

• OECD releases key guidance on transfer pricing risk, recharacterization, and special measures