The OECD Discussion Draft on the Transfer of Intangibles (Revision of Chapter VI of the OECD Transfer Pricing Guidelines) – Main Comments

Abstract

On 6 June 2012, the Organisation for Economic Co-operation and Development (OECD) released a discussion draft on the Proposed Revision of Chapter VI of the OECD Transfer Pricing Guidelines (TPG) and Related Provisions. Intertax publishes the full text of the discussion draft together with the comments submitted by members of Baker & McKenzie Global Transfer Pricing Practice and Global Tax Policy Group. While applauding the document for clarifying a number of important issues related to the application of the arm's length principle to situations involving intangibles, the commentators also believe that the Discussion Draft on several occasions presents departures from the arm's length principle and from the existing guidance in the 2010 TPG. They suggest that the concerns expressed by some countries in relation to specific structures should be addressed within the appropriate legal and policy parameters and that the TPG should remain an interpretative tool of the arm's length principle as set forth in Article 9 of the OECD Model Tax Convention. In addition, they suggest that the guidance in the revised Chapter VI should be balanced and acknowledge that the facts and circumstances of each case ought to be taken into account in a transfer pricing analysis. Prescriptive requirements should not be set as substitutes for comparability analysis.